Monthly Archives: November 2019

Help! Investment Property Refinance – Cashflow or Equity?

Key Facts:

  • Current Mortgage Total Cash Outflow is $1846
    • 30yr @ 5.625%
    • P&I is $1,404.60
    • HOA is $220/mo
    • Taxes $222/mo
  • Rental Income is $1850

In late 2007 my wife and I got married and bought our primary home (perfect timing to buy a place /s!). It's a 4/2 Condo in Miami. Surely enough it went underwater by ~50%, but being the responsible people that we are we held on to it and property values now in 2019 mean that we have a little bit of equity ~70-75 LTV.

We moved out of that property in 2011 and have rented it out ever since, and just recently we became cash flow neutral (enough to cover P&I , Taxes, and HOA).

I'm thinking of refinancing it, but I have doubts about going to a 20 year or a 30 year. Surely, the 30yr is more attractive since it would generate an extra ~$366/mo in cash flow.

Refinance offers

  • 30yr at 4.5% a bit high due to 1)investment condo and 2) Miami this would generate about $366 extra in monthly CF
  • 20yr at 4.25% this would generate an extra $135 extra in monthly CF

What an I missing or should consider further masters of reddit? Thanks!

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Suggested readings for a first-time home buyer

Hi r/realestate, I am looking for recommended readings (preferably books) that will help me learn all processes and terms that buying a home entails.

I realize that there is a link on this page titled "Recommended Reading", but it appears that that is more geared towards folks looking into real estate investment, whereas I am eager to learn about what the home buying process is like.

Thanks in advance!

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College Condo Purchase (long)

I believe there is a common sense option but I can't seem to come up with it: 1. Purchasing a condo for my two children w/n next 3 months; while they attend college to use at least the next 7 years (when youngest estimated to graduate college; currently Jr in High School). 2. Paid off our house 2 years ago, tax assessed value is $477K 3. We own 4 cars and estimated replacing one car in 1.5 years (expected to buy used and have budgeted $27K) and another in 3 years. 3. @$43K in money market (wife and I have are savers). Nominally we save $2.5K a month. We can scrape together another $15K from checking and savings accounts. 4. 3/4 bedroom condos, within walking distance @$360-$450K. Its is definitely a "sellers" market currently.
5. Each of kids has over $50K in coverdale education account; allowing us to withdrawal, tax free $12,800 (in 2019) to pay for room&board. 6. We were planning on getting a loan with $10% down; not possible for owner unoccupied. Need 20% down. Didnt know that until I started getting quotes from mortgage brokers. FHA condo loans not available. 7. Was planning on a cash-out refi for 80% of the assessed value of the home. Have two quotes; narrowed down to 1; desire to make a decision next week. 8. But with cash-out refi, and then subsequent condo purchase; will I have pay closing essentially twice? Closing on the refi-cash out and closing on the condo purchase. 9. Considering a HELOC with my credit union for the additional down payment to make a total of 20% down. No fees. APR is prime but I must pay 1.5% of current balance. Then close once on the condo. 10. Wife and I are very conservative; house is 14 years old, 3 of our cars have over 180K miles on them. We are used to having cash available. Dont know how well we will sleep if we dont have a cash cushion. We frequently get unplanned bills (5 ton HVAC just replaced, timing belt in one vehicle, radiator replaced in another w/n last 4 months).

Any help, ideas, comments, welcomed

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Contingent offer vs non contingent?

We originally listed our house with the intent to buy one specific house that my husband has fallen in love with. We originally went in with a contingency offer at 285k seller paying the closing costs and it was verbally accepted. Long story short, the seller never signed our written offer and had another higher contingency come in a couple of days later. Our realtor should have been putting pressure on the sellers to sign but I suppose the seller knew the other offer was on the way hence the stall.

Our house is under contract and the buyer has her own house under contract. Everything on our end is moving to the closing process with an upcoming appraisal that shouldn’t be an issue.

My husband still wants the original house that he fell in love with and we’ve come in with a non contingent offer. The seller wouldn’t accept our original offer again, since the contingent offer they have is 15k (ish)higher.

They will accept 295k, but it comes with a bunch of stipulations. Closing dependent on when the seller is in town, we can have an inspection but the seller is selling as is and has already fixed several things for the contingent offer and doesn’t want us to put the inspection as a way to get out of the contract. This is not a fixer upper type house.

I feel like we’re getting a bad deal and spending unnecessary money. I know it’s just 10-15k, but we’re already at the top end of our budget and I’m getting nervous. My husband is in love with the idea of this house but both our realtor and myself feel like the seller is getting really greedy and thinks they can demand whatever since they have two offers.

It doesn’t seem like the current accepted offer will have any movement anytime soon. It has an expiration of the end of the year. The other potential buyer can not remove their contingency since their current home will have to sell for them to buy. I’m not sure of the address but the sellers realtor doesn’t seem to think the contingency is getting removed before the expiration.

Do we wait out the expiration knowing we will likely have to rent short term between closings? The house was on the market for over 1 year which isn’t common in our area.

Just pay the extra since it’s minimal on the monthly payment and let them have their outlandish requests? I understand wanting more money If someone else says that’s what they’ll pay, but IMO they’re risking a lot by wanting to have two offers at the same time and play them against each other.

Is there any other way to play this to make this good for everyone?

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Should I purchase my first home in Utah in a “sellers market”?

So I'm strongly debating whether I should buy a home here or move out of state. I'm a 31 year old single guy with no debt, 720 credit score, 2 cars, 20k saved for down payment and 10k for emergency savings. I was reading an article how Utah ranks 2nd in the nation for rising home prices. Due to this, I'm wondering if I should act fast before prices continue to rise or if I should continue to save that money towards a home in another state? One of the perks I would have though if I stayed here is my friend, his wife, and his kid might be my tenants depending on location I would choose. So here is the pros and cons I see with a few plans I've made:

Plan 1 (buy home here locally): I would be able to put a down payment before house prices skyrocket. I'm thinking I would be able to start building equity and ride the wave of home appreciation. However, since prices just keep going up and up, my 20,000k I've been saving for some time is no longer as big of a down payment as it once was. I've been reading though of other redditors here here who have put down around 15% and said it was worth cause if they would have waited longer the house would have been completely out of reach due to rising value. I'm thinking of saving around 10k more and putting 30k or 40k(if i use savings) and buying a home around 250k to 300k.

Option 2 (move out of state) Keep saving and invest part of my income into index funds. I can save around 20k a year with my current expenses. From there, I would like to save around 50k ish and go buy a house elsewhere. I'm thinking renting, dating, getting married here, and finding the ideal state to live from there.

Option 3 (buy home here in farther city)There is a city here called "Eagle Mountain" that appears to be where a few of my colleagues have bought homes. They say they anticipate rising value although it's a ways off. One of the plus sides is that it would fall under a "rural housing loan" which would mean no down payment. The downside is the 35 minute commute to my job and my friend and his wife said they wouldn't be interested in moving so far. The homes here are around 250k

So what are your thoughts? thanks in advance

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Homeowner is short and offer accepted

If it matters, this is in the Bay Area of California. The seller is short about 2-3 percent and it wasn't known until an offer was accepted and escrow started. Seller does not want to go short sale. What are the options for the home seller outside of asking everyone to pick up 0.5 percent or asking buyer to rewrite the offer? Can the buyer make the seller sale despite it being short?

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PA Real Estate License Expiration Question

Hello! I am working on getting my real estate license this month, but had a question about expiration.

I know in PA they expire every even year by May 31, so if I were to get my license Dec 2019 or Jan 2020, would that mean it is still going to expire in May 2020 even if I've only had it for a few months, or would it expire for the first time in 2022.

Thanks for the help guys.

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