All Forum Posts by: Wynn Meyer

Hi Everyone, been on here in the past but figured it was time to formally introduce myself. I am a REALTOR® and property manager in the Truckee and North Lake Tahoe areas of CA with a background in short-term rentals. I have been in the area for about 15 years and love everything it has to offer. Looking forward to connecting with others in the area, and helping out where I can!

I’m looking for advice on the best type of construction financing for a home my fiancé and I have bought that is in need of a major renovation. This home will be our primary residence once it is completed. We originally bought the home with the intent to handle much of the work ourselves over the course of two - three years which is within my scope of abilities. However, we are currently living in a home my parents own which they use only during the summer months. While I love and appreciate my parents dearly, the thought of us all living together for another summer or two, while trying to maintain our sanity has caused us to speed up our timeline! We have spoken with a few local banks regarding construction loans and we are running into issues with regards to my credit and my fiancé having recently started working full time in her field that she is currently in grad school for. Details are outlined below, thanks!

Goals and story: My fiancé Katie and I purchased this home this past March after moving back east from Northern California. It’s in an area where my family has owned a second home in the past. We always talked about how great it would be to buy it someday, and eventually did this past spring. Our goal is to make this our primary residence after completing the extensive reno that is needed.

Type of property: Single family residence. The home is an old farmhouse originally built in the 1830s (best guess). It sits on nearly 12 acres of old farmland. It is currently a 4br/1bath with plans to add a second bath on the second floor.

Location of property: Kingfield, Maine 04947

Purpose of financing: Completing an extensive renovation of the house. We bought the house through a private sale. There is currently no plumbing, or HVAC systems in place. Electrical needs to be fully rewired. A new well needs to be drilled as the hand dug well is not viable/safe to use. Siding, windows, doors, and floors all need to be replaced, in addition to a new addition being built for the kitchen that is also needed.

Type of financing sought: Unknown??? Looking to find relatively short term financing to complete the renovation before refinancing into a traditional 30 year fixed. In the process of securing estimates from GCs to develop a total cost for the project. My estimate is between $100-$125k.

Current or prior ownership of real estate: This is the only current piece or real estate we own. Prior to the purchase of this house, I owned a home in Truckee, CA that I purchased in 2016 for $385k and sold in late 2020 for $600k.

Occupancy: Will be owner-occupied.

Value of property at present and/or your offer: Property was purchased for $140k in March. We completed a full foundation replacement which involved jacking up the home, removing the original slate stone foundation and pouring a full concrete basement as well as installing a new septic system which cost a total of $64k.

After repair value: My estimate is $280-$320k. (This area, like many others, has seen exceptional increases in home values since the start of the pandemic)

Anticipated or actual appraisal issues: Unknown

Current rents per month: N/A

Fair market rents per month: N/A

Down payment or equity: We purchased the home with $80k down and $60k in owner financing (Approx. $54k balance on the owner financing portion). Plus the value of the work completed so far.

Source of down payments funds, if applicable: Funds from the sale of our home in California.

Income source: I am an independent contractor doing mostly handyman and property maintenance work, and my fiancé works as a mental health advocate at a private ski academy.

Gross monthly income (optional): Combined approx. $5800-$6000

Monthly debt obligations: Combined, less than $250/month. Currently we are living rent-free in a home owned by my parents. Only monthly debt between the two of us is my fiancé’s minimal student loans.

FICO: Mine is in the low 600s, my fiancé’s is north of 750.

Credit Issues: I currently have a high utilization rate on the minimal credit cards I have due to a recent financial emergency. I will have that paid off by the end of November. My fiancé is in grad school for another 1.5 years completing her masters in mental health counseling and therefore has only been working in her field full time since March.

Additional details: This home is as much a passion project for us than anything else. It’s obviously not a home run numbers wise! It’s a special property in the small town, and one that a few others have half-heartedly tried to renovate in the past. My past real estate experience consists of 5 years of management of short term vacation rentals and high end second homes in the Lake Tahoe area. I was responsible for the care and maintenance of around 25-30 multi-million dollar homes, so I do have experience working with contractors/tradesmen and in project management.

@John Mocker I appreciate it! You are absolutely spot on. These questions have all come up from agents in my quest so far. All work will be done by licensed contractors. I have met with several over the last few days which has helped tremendously with fleshing out timelines and costs.

@Virginia Marphis thanks for the reply! I have been working with a number of brokers locally who have been doing their best to find any carriers willing to take it on but unfortunately it seems they all use the same underwriters who don’t want to touch it. I did meet with a mason today who provide some options for repairing the foundation that would not require jacking the home so fingers crossed that will open some doors for insurance! 

PS I see you’re located in Reno. I just moved back east after ten years in Truckee, happy here but I miss the Sierra already!

Hi all,

I recently purchased a 1916 farmhouse in western Maine in need of major repairs. Currently there is no heat or plumbing systems in place and  the original field stone foundation is failing. I have not had any luck finding a carrier that is willing to offer coverage on the home during the renovation. The main deal breaker has been the need for the home to be raised off the foundation for the new concrete foundation. Has anyone out there dealt with a similar situation or have leads on an agent who may be able to offer coverage? This will be our primary home once the renovations are complete.

thanks!

Hi All,

I have been renting a home in Truckee area for the past two plus years. We had originally been on a year lease with month to month after that. This past month my property manager informed us that the owners wished to start using the home again as a vacation home and served us with a 60 day notice of termination of tenancy with a final move out date of October 15th. The rental market is extremely competitive here with very little inventory so we got right on finding a new rental. We were fortunate enough to find a place and just found out this evening that our application was selected. The new landlord is looking for a move in date of Sept. 15th. So my question is: since we were given a 60 days notice am I still required to give my current property manager 30 days notice or can I simply tell him we found a new place and will be vacated by Sept 15th? Trying to find out if there is a way to not have to pay two rents for the second half of September.  

Here's a great blog post about how to analyze a city for investing if you haven't already taken a look at it. http://www.biggerpockets.com/renewsblog/2015/05/10/invest-out-of-state-how-to-analyze-a-city/ I have been digging into CAFRs for cities I'm interested in and they contain some great information.

Sorry I didnt mean to included capex in calculating NOI but rather a negative or close to negative cashflow after debit service even with all 3 units rented out

I agree your numbers do look conservative, I might be missing something but I dont see any amount budgeted for maintenance and capex. With out knowing the building its hard to be that accurate about what reasonable numbers for those would be. But even going on the low side of 5% for maintenance and $100 per unit per month for capex (likely much more than that) with the rest of your numbers gives you a negative NOI.

Typically in regards to prescriptions BID stands for "bis in die" Latin for twice a day.