Well said Bluemoon!!! same concept in bad neighoods,just double the houses! he he lol
the key now is 50% off…not 75%…25% will be lost in the doom and gloom coming within the next18 months
your deals will be even better within the next 18 months,watch and see…bank s will be giving away the great deals here in the coming months
my 2 cents
Robert A. Doncaster, Jr.
Import/Export Entrepreneur & Investor
*** DO YOUR HOMEWORK ***
Chicago Illinois USA
& sometimes Salzburg, Austria
Bluemoon
I agree with everything you are saying but since I did buy this house cash (because my first exit strategy was to buy and sell) I am being told by most lenders that I will have to wait 6 mos. to refinance. Since that is the case I might as well save some money on the rehab and get the owner occ rate to go with it. I will definatly finance the rest of my deals from the beginning, from here on out.
Im all about the lifestyle. My ultimate goal is enough passive income to quit my day job. I just dont see a pace of one house per month as being realistic for me right now.
Thanks for the advice
Matt
I think you’re getting a little too caught up in theory and reality. What you’re doing sounds about right if you’re talking about a 200k+ deal or more where the lower interest rate has a real effect on the bottom line, however with such a small amount of money, the refinance costs are so high relative to the loan that a lower interest rate really means nothing compared to what you’re losing in potential rent.
Most people focus too much on the interest rate and not on the monthly cash flow. As I said before, your real problem is not talking to more lenders, you’ll get a different story out of them the more you talk to. You can finance this now, it’s just that they normally go by the purchase price when it’s under 6 months.
I understand what you are saying but the damage has been done. I bought the house for cash and now need to get my cash back. If i rent the house out now it will be labeld investment property. If I wait 5 mos I can make it owner occ. My total closing costs the first go round were 338.00. To refinance im looking at 2500-3000.
60,000.00 at 6.25% for 30 yrs. is 369.43 mo. Total interest 72,994.92
60,000 at 8.5% for 30 yrs. is 461.35 mo. Total interest 106,085.31
I think ill wait a few months to get those numbers. Besides, im going to have to pay the closing costs of 2500-3000 regardless.
i thought i was going to buy, rehab, and sell. I bought it cash to avoid HML. This is plan B for me and I dont think a few months of lost rent is going to hurt in the long run.
Thanks for the advice though…
Matt
Bluemoon
I assume you are a member of lifestyles here in Houston. " Its not the money, its the lifestyle."
I asked Del about his opinion on operating expenses running 45-50% of gross rents and he wouldnt answer my question. He basically said that he could rent a house in 3 days where it might take someone else 3 months- And his repairs would cost less than another persons would. I agree with that to a certain extent.
I just wanted to ask you your experience with what OE run you.
Thanks for your reply
Matt
Yes lifestyles is one of the clubs I belong to. I also belong to the Real Estate Investors Club of Houston (RICH club). Glenn Dickson’s club (Complete Property) the best thing about his club is that it is free and he provides drinks. I am also a member of MMAP. I think that MMAP gets me the best conections and I do my financing through them. These people are buying houses. Del at Lifestyles gives you good foundation like renting a house in 3 days and cutting costs. Glenn’s club gives you good market information and RICH is good for networking.
I can give you contact info for all these clubs if you would like. If I had to pick 2 clubs to actually do the business I would say that Lifestyles and MMAP are mandatory.
I belong to RICH and of course have heard of Lifestyles but I havent heard of the other two.
Id like some info on MMAP and glen Dicksons club. Thanks.
Matt
I just sent you a pm with their contact information.