I’m new to investing and am seeking some good advice on my current situation. I recently bought a condo in FL for 150k with 5% down and have a fully adjustable month-month ARM that I must keep at least a year to avoid prepayment penalty. I am currently paying a ridiculous PMI of $125/month and wondering what I should do next year in terms of refi and trying to get out of the PMI ASAP!
I’m also looking to begin investing in RE and have about 10k to play with and was wondering what my best bet would be starting out. I know finding the deal is the hardest part, but once you do, how difficult is it to receive quick financing? Any advice would be appreciated.
Good Afternoon Phil,
Wow! The financing on your first deal doesn’t seem too investor freindly. With $10k to play with, I would look at lease-options, subject-to’s or short-sales. I like the Clearwater area and have an investor in the area, from what I know it is a hot area.
The type of purchase suggestions I made above are generally the least expensive and doesn’t require new financing. But be sure to know the laws of your State before moving forward.
hey z,
when it comes to real estate investing, you have to analyze your cashflow. no one likes pmi; however, to refinance to simply get rid of the pmi does not make too much sense. in florida alone, your doc stamps on 150k would be $525 and intangibles would be $300. don’t forget about recording, title insurance, lender fees and endorsements which could easily take you up to $3-4,000 more. in other words, it would take you at least 2-3 years to just re-coup your costs because you were not happy with pmi. watch the cost…
Dont discount refinancing if the #s make sense. As the last reply made mention of there will be cost associated with the loan. However, we as mortgage brokers get paid through the bank for signing loans up. If the premium is high enough, a majority of your costs can be paid for by us to make the deal work.
I have had clients that I paid for everything and made very little soley because my relationship is one that they have multiple properties and referrals in a year that far out way me helping with one loan.
Have even done loans within the prepayment penalty period if the #s make sense. Do you have a 2% of the balance prepay or 6 months of interest prepay? The later, is more expensive and usually may not make sense. You also have to consider where rates will be in a year or so.