First Purchase/rehab Story - Next Step Question?
First of all thanks to all of you that post here. I am 25yrs old I now have aprox 70k in equity thanks to your tips and confidence boosting posts.
The story so far:
I have been looking at buying a primary residence for the last 2 years and finally last year I quit my job in Philadelphia and flew to San Deigo (My dream city) to buy a house....wound up spending 435k after reading and researching here for 3 months prior. Grant it, this has stretched my budget to the max but I pulled it off over the last year and I would like to make my next move asap. At the end of the month I currently have just enough money for food and beer so as you can probably guess I am itching to get out of my high interest creditcard and car debt. With that said I need to take a large chunk of my equity out to pay off debt and I figured as long as I was doing this I may as well pull another 100% loan and maximize my prepayment and escrow charges.
After renovations and appreciation the house has appraised for 507k and I am now in the position to refinance the house.
Currently I have aprox 25k between creditcard debt and a car loan. My creditscore is around 630 and my income is roughtly 75k stated. The first mortgage of 348k is @ 6.25% and my second (80/20 financing) of 78k is @ 10%.....I took this loan only because of the situation I was in and with the intentions of refi asap.
1.) I am on the right track taking the equity all out.....I know I can save 1000-1500 a month after this refi with no more high interest payments and cc payments. Is this equity worth anything to me in my next REI investment other than being money in the bank?
2.) With the leftover refi money I would like to make my next REI purchase. What should it be...I feel kinda comfortable with the rehab scenerio...I am fairly handy and dont mind getting dirty. Should I stick to this?
F.Y.I. I plan on keeping and living in the primary residence at least another 1-2 years....also I would like to put any new properties in a LLC does this sound logical?
Again thanks to all of you who take the time to read our questions.
Cisco
I do not understand how range pricing works. The only time I have seen it in FL is when someone is in the middle of a rehab and the range means - depending on how much work is done when you make the offer. Is that the same concept?
In FL we are starting to see many houses not appraise. If your buyers have 300k to put down, why are you worried about appraisal? Can you not write something in the contract that states that buyers will finance up to the appraisal price (or 90% of appraisal price) and must be williing to come out of pocket for the difference?
I believe the price range is a reflection of the hot re market. This past few years have shown multiple offers on homes. So buyers are kind of competing against each other. I know its weird. As a buyer myself when I see someones starting price at 549K I think well if they will take that why would I offer any more? But they do!
The range concept has more to consider than just price. A seller will sometimes accept the lower offer if the buyer is not selling a home, or if they are comming in with more down. Of course they are always hoping for the upper range. I have noticed lately that the range has been smaller and have even been reduced as this market has slowed a little. As a local SD investor (newby) I would love to hear about your experiances in this market.
Thanx Don
ceedee, forgot to reply to your question. If it fell out twice I would be anxious to get it sold and move on to my next project. Then again, I dont know the details of the deal. I assume you will make money on this deal with the existing offer since it was in your range. With that large of a down, it sounds like a pretty solid deal. Let me know how things work out.
Thanx,Don
I think what the agent is concerned about is that during the appraisal process, the appraiser may notice that the roof is bad and state this in their report which will panic many lenders.
I was in a similar situation not too long ago and my lender allowed funds to be placed into an escrow account at closing to be used for roof repair as soon as possible. This house was hurricane damaged and had those blue plastic tarps all over the roof. If your damage is less obvious, it may not even come up.