Getting Pre-Approved
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In gearing up for my first investment project, I am at the point where I would like to get pre-approved and funding in concrete before or while I start my serious search for an investment property.
What I am trying to find out is what peoples suggestions are for getting pre-approved. I have great credit, cash for down partial cost, collateral. I guess my question is, what type of credit should I be looking for (conventional bank/lender, lender through this site, particular unconventional loan?)
Any suggestions where I should start in my search for pre-approved loans/credit?
Refreshing, to see if anyone can put in some pointers as what type or what direction I should be going about getting pre-approved according to the details I listed above.
Try Foremost insurance... They might be of service to you...
www.foremost.com
Good Luck!
[addsig]
No doubt. If you try to "skirt" things, they will certainly look for potential ways to deny claims. If you are up front and disclose everything, even though it may "cost" you more premium, your claim will be handled fairly.
Best regards,
Tim
"Builders risk" insurance inherently is for just that, a builder. For most rehab "projects" that we discuss here, the contracts offered by the carriers mentioned above are not only sufficient, but more appropriate than true "builders risk" contracts. It is, however, up to the contract language as to what extent of rehab merits such builders risk coverage. Razing and rebuilding, for instance, would be a good example of neding builders reisk. New carpet, windows, HVAC, etc.. is better suited for the "rehab" policies that some carriers offer. The confusion lies in the interchangeable usage of the term "builders risk" for all rehabs and rebuilds (or new build, for that matter).
Hope this helps...
Thanks for the valuable info John
It depends (I think) on how experienced people are, as to showing it partially or completed.
I sold a place, under-rehab and it sold in days but have been trying to rent another place and people could not see past the paint can.
Okay maybe I the dumb one here... But i have bought 58 properties this year and use a realtor on everyone to sell... who cares if there is commission to pay as long as your turning dollars and making your mark..
I have friends in the business who would never list their homes, guess what their turn ratio is half of mine, which means I can buy and sell twice as much with the same amount of overhead.
It like doing the plumbing, sheetrock going to the dump and doing all of the other stuff instead of hiring those out.
As for commission, if youre not in the MLS dont bother..
The MLS sells homes
If you want the middle ground use a service that will put your home into the mls for 495. plus the buyers side commission.
problem is you dont have the protection of their E/O insurance.
And I bet that if yu listed with a "Top Agent" your homes would sell faster. use their reputation
IBuy, considering the volume of your business, do you have a set amount you pay your Realtors? I would have to think you would expect (and get) a reduced commission from your agent? Even if they are selling like crazy on your behalf, 6% is still a big chunk of change when you are sitting at the closing table looking at the settlement statement. Thanks for your perspective - I want to learn to not step over a dollar to pick up a dime early in my career as an investor.
I get all the outside work done, trim the shrubs, cut the grass, repair the fences, paint, new roof, whatever, then I put up a sign. Like many others, I find newspaper advertising too expensive. I work on the inside and when it is done I sometimes put an ad in the paper to test the waters. If no success and not much activity, fter a few weeks I list with a flat rate brokerage to get the property in MLS.
Im in a similar situation. 98% done with my first rehab and will market it FSBO for 2-3 weeks.
you can try i sold my http://www.house.com, cut the http://www.commission.com, joel http://www.matson.com or simply try a google search. there are plenty of companies which will list for a flat fee for usually around $899...
good luck
for the references they should be i sold my house, cut the commission, joel matson.
I guess the system changed them into ( incorrect)links...
Your capital gains tax is your regular income tax rate plus you will need to pay SE tax. Establishing an S-corp will help you avoid part of the SE tax but not all of it.
talk to a CPA/atty for advise on business structures. Opinions vary greatly.
Look at other "expenses" you might have as part of doing a rehab... thinks like the new truck, a trip to Vegas, FL or CA to look for properties, etc. What other expenses can be washed thru the business?
If you find a CPA you like, ask his opinion / comfort level with 1031 exchanges.
A 1031 exchange would not work if your intension is to flip. Requirements are a 12 month hold without the intension of selling.
as for the tax, especially in California, it is better to be an S corp. to avoid the franchise prepay and most of the self employment tax.
And I would agree take advantage of the tax code for business related expenses.
You might want to also have a C Corp so that you can filter income into for a different tax ending period
I watched the program. He seems to have gotten lucky - making $80,000 on his first property. He definately made a lot of mistakes, but what saved him is turning a 2-bedroom condo into a 3-bedroom. And for all those people who say you cant make money rehabbing in CA, here is an example of someone who did.
I accidentally found this show as I was channel flipping (pun intended). It got me excited, I was surprised he had so many offers (17) and very impressed with his strategy of such a low offering price. A gamble, yes, but more evidence of our continuing market climate.
Though being a realtor himself he did have a strong knowledge of how things work. He did a good job staging the condo as well.
I am very jealous, I mean happy, for his success!
Take care,
[addsig]
Absolutley, you can rent most of it. I do not really know other markets well, but you can visit some new model homes and get a feel for staging.
It depends on the area as well, where I live homes are staged towards a family environment. In Santa Monica (where the condo on the show was) it is geared more towards young professional couples. More modern and young.
IMO it is extremely important to stage correctly. I also believe in baking either cookies or a pie just before the open house.
Good luck,
Andy Gibbs
[addsig]
Yes, turning it into a 3BR was the masterstroke, a brilliant idea. And he really lucked out with the gamble on a lowball price. It was very interesting and informative. Be sure the check it out every Saturday @ 10pm on TLC.
The exact same house across the street (same model) sold just before mine went on the market for the same price listed it at. The only difference between mine and that one is that it had a finished basement. I have since then lowered my price twice, each time $5k with the last price change happening last week. My realtor also concurred, its priced right.
The exact same house across the street (same model) sold just before mine went on the market for the same price listed it at. The only difference between mine and that one is that it had a finished basement. I have since then lowered my price twice, each time $5k with the last price change happening last week. My realtor also concurred, its priced right.
yeah...well let me take back what i said...staging your house will solve all of your problems...
(anybody else reading this, staging will generally help you sell a house alittle quicker for alittle bit more money -- i.e. a good idea)
Thank you, good to know
Contrary to popular belief disclosures are for the protection of the Seller not the buyer..
If you already have a home inspection done, do yourself a favor and include in the TDS (Transfer Disclosure Statement) that you are advising the buyer to confirm the validity of contents of the existing Home inspection and give the copy to the buyer.
Its always better to be safe than sorry. Especially in California.
Jane
Im also planing to move my family to NC, dont know what part exactly but close to Va border. Right now in some parts of Va they have alot of profitable rehab properties. Just look into what area/ neighborhood the city is trying to clean up...
good luck
Jane
The reason why is because we can get more land for less, with the land i plan on building my custom home which it will be more relaxing, dont get me wrong Va is a good place to invest in rehabbing. You can always live in NC and invest in Va...just a thought ...good luck
You are writing this for MLS listing, flyers or what? What is your medium and who is your audience?
BTW - I know that you are proud of your rehab. But location, number of bedrooms and bath and square footage are the most important aspects. Do not lose sight of this and spend too much copy describing the minor details and forgetting the important details.
Brenda
Sounds good. What is the word limit in the public remarks?
Brenda
I like it too!
The curiousity to keep reading based on trying to critique it and to see what/how you will rhyme it. See if the average reader will remember the details, but they will come to see it.
There is a realtor in our area who has a consistent flair to his listings and they stand out from the crowd.
"There is space in the directions area that touches the remarks area so I used them both. "
I have seen maybe 20 different layouts of the MLS information. On each of these formats, the directions will not always be next to the remarks.
I certainly hope the house lives up to the build up. Reading something like that automatically puts me in a doubtful mood as to why the house needs such a description, makes me think it will be a $2 house with a $20 description, but that is just me.
I am also of the opinion that the location, the price, the features, the square footage, the garage space is going to have a lot more to do with driving showings then a $20 description.
There are idiots all over the place, just dont be one of them. Tell them you wont fix anything on the list now that they have been unreasonable!!! If the house is nice and priced right someone else will buy it
Good Luck!
Actually in California you dont have to respond to the request if the contract was on a CAR form.. The buyers have 5 days to cancel the agreement if you dont after they give the request for repairs but if they dont cancel then the original contract stays inplace.
It is my understanding that California does not license or certifiy inspectors...........so your recourse is limited there.....how ever I would contact the inspector and let him know that his report was not factual and that you will report him to the BBB.
Secondly, it is common knowledge that many people will use an inspection report as a negociation tool. As a licensed inspector and GC, I know what is bogus and what is legit.
Cosmetic items are bogus...........safety issues is what should concern the inspector. Forty seven items is quite a bit.......however, you have the upper hand in the fact that you do not have to sell it to these people.
If the buyers are going to be nit picky or just plain stupid.......then tell them to take a hike. If you are not happy with the agent then report it up the chain or to the state board.
NC
Thanks for the info NC Yank. I will do just as you recommended. If in fact they(the buyers) were just trying to reduce their purchase price they loose $700 in inspection and appraisal cost plus the opportunity to buy my condo. (I already told them to take a hike). I will contact the inspector and report him to the BBB.
Since no one else has answered, I will throw in my two cents.
You would probably be better off starting out as a bird dog. You basically find investment properties for other investors. You get a fee (anywhere from 500-1200) and you learn the market.
Get your credit cleaned up. Get some cash saved. Get the knowledge. Then start looking at the above stratgey.
Welcome to the forum. I have been hear since March and still am new and learning. Comps are comparable prices to the home you are considering purchasing. I normal have my realtor check comps for me but I also check them on the County Assessors Website. There are also Real Estate agent websites which will email property list of homes I am looking for and provide comps as well. I hope this helps, keep reading and much success and profit to you.
Comps do several things for you. If you are rehabbing, you can use the comps to estimate what the after-repair value will be. They will also help you determine a good selling price.
http://homegain.com is a good site for finding comps.
your pledging the asset multiple times or due you close the 60K house before buying the 75K house?
If it the 1st loan isoutstanding, you have over commited the collateral.
No, I was looking at holding several at once. I gues I would be overcommitting my collateral.
I have never used conventional loans for REI rehabs. Thanks for the info.
I would certainly create a corporation or LLC. Tax benefits and once you have a company for two years, your ability to do stated income loans helps.
[addsig]
Are you a member of your local REIA. Usually agents who are experienced in rehabs or as-is houses are members also, because they work closely with investors. You should be able to get some referrals from other members.