• Our developer will be working on RCF over the next few weeks. Things may look wonky at times, normal functions may not work or dissappear completely. It's the nature of the beast but we'll try to make sure this is painless as possible.

Real Estate Investing

Zog

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Yeah, I think the 2% rule is insanely optimistic, but if you can find that buy it without even thinking twice.

For shits and giggles I used my same setup: 2% home appreciation for year, 1% of purchase price per year in repairs, 2% rent increase per year. But then changed the initial rent income to be 2% of the purchase price.

It ended up with an initial rent of $7,780 per month (about 3 times the amount it is, and around 1550 per month per person, waaaaay over what a 1 bedroom in richmond goes for let alone a 4)

The total net incomes of the house over 30 years were 2.9 million dollars. That isn't including the value of the home you've paid off. That isn't including the value of the appreciation of the home. That is literally just the net cash flows summed up.

Seriously if anyone finds a house abiding by the 2% rule tell me and I will buy it today
I mentioned in an earlier post the 2% rule is really not realistic in most US markets. You have to invest in undesirable neighborhoods or live in a low COL region with a good economy, which is extremely rare now that the housing market has rebounded. That's why I think 1% is more realistic, and even those deals are hard to come by in desirable neighborhoods.
Yeah, you can find that type of place in terrible neighborhoods. But I'm not ballsy enough to be going into that type of neighborhood to try to collect rent or deal with one issue or another. Not even with an AR strapped to my back.
 

The Wizard of Moz

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I toured the place. The 1 bedroom is really nice. The 4 bedroom is a typical shitty college house. The railing going up the stairs could easily be broken on a drunk night (shakes upon poking). The appliances, roof, and HVAC were all updated in 2001.

I feel like this isn't the right match for me for my first home. I've got to stay patient.

I saw a place in Kent that I really liked. Was ready to book a flight to check it out and was moving around some cash to make a purchase I liked it's potential so much. 130K for a 4 bedroom on a very popular street (highly doubtful there would ever be a vacancy)

Then I contacted an agent and he said that zoning laws state that this house can't be rented to more than 2 non-related occupants at any time and he said it basically takes moving heaven and earth to get reclassified

the fuck is this nonsense. Can anyone give me any more info on if this is typical in other places or if they've gotten a house reclassified.
 

MrX

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So much has changed in recent decade. My parents bought their first home in Copley sometime in the 70s paid 19k 5 years later sold for 29k. Bought second home on Brown st in Akron for 29k 5 years later sold for 45k. Bought their 3rd home in rootstown for 59k 5 years later sold for 92k. Bought their 4th home in Deerfield for 109k 2 years later sold for $140k.

I figured this is just the way it works. Bought my first home for 63k near Deerfield. Its a duplex I lived in one and rented to other. Homes continued to go up in the area untill 2008 and then nothing sold. People list their homes but no sales. 2 years later I see homes that were on the market for 100k plus selling for 15-20k all over the area. One home down the street from me had New roof siding 150x150 lot and was on the market for almost 3 years for 14k. High school friend lived a cross the street paid 129k lost his place and sold for 19k. The one next to him was bought for 119k sold for 23k. 2 building business near by sold for 18k. A 2000sq home 5 doors down sold for 16k.

Its good area. Its all country out here but banks just don't give loans like they use to. Got my home on a 620 credit score no questions asked. My dad recently bought new home and banks wouldn't even look at him till he had 700 score. People in my area pay cash. Empty their 401k accounts. I did notice that homes with huge amount of land have value.

People who rent here are taking full advantage of banks not loaning money to average joe's driving rentals through the roof. Long story short I'm better off renting my duplex then selling my units for a fraction of the purchase price
 

Lee

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So much has changed in recent decade. My parents bought their first home in Copley sometime in the 70s paid 19k 5 years later sold for 29k. Bought second home on Brown st in Akron for 29k 5 years later sold for 45k. Bought their 3rd home in rootstown for 59k 5 years later sold for 92k. Bought their 4th home in Deerfield for 109k 2 years later sold for $140k.

I figured this is just the way it works. Bought my first home for 63k near Deerfield. Its a duplex I lived in one and rented to other. Homes continued to go up in the area untill 2008 and then nothing sold. People list their homes but no sales. 2 years later I see homes that were on the market for 100k plus selling for 15-20k all over the area. One home down the street from me had New roof siding 150x150 lot and was on the market for almost 3 years for 14k. High school friend lived a cross the street paid 129k lost his place and sold for 19k. The one next to him was bought for 119k sold for 23k. 2 building business near by sold for 18k. A 2000sq home 5 doors down sold for 16k.

Its good area. Its all country out here but banks just don't give loans like they use to. Got my home on a 620 credit score no questions asked. My dad recently bought new home and banks wouldn't even look at him till he had 700 score. People in my area pay cash. Empty their 401k accounts. I did notice that homes with huge amount of land have value.

People who rent here are taking full advantage of banks not loaning money to average joe's driving rentals through the roof. Long story short I'm better off renting my duplex then selling my units for a fraction of the purchase price

Bit of exageration of the mortgage industry, you listen to too many old and bitter realtors.

580 is my min fico for fha. 3.5 down, 620 conv 5% down.

Cant have major collections. Behind on student loans, tax liens, etc.

So you cant be a dirt bag and get a home, but an average joe certainty can.
 

MrX

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Bit of exageration of the mortgage industry, you listen to too many old and bitter realtors.

580 is my min fico for fha. 3.5 down, 620 conv 5% down.

Cant have major collections. Behind on student loans, tax liens, etc.

So you cant be a dirt bag and get a home, but an average joe certainty can.
Are you saying you know someone who got a home loan with 580 score. If so it's surprising to me but guess it has a lot to do with your area and what the bank considers a risk. In my area even though its not a bad place to live I believe many people over inflated prices in the day so when the banks went bankrupt for giving loans to unqualified people and received the bailout not to mention gas prices going from $1 plus to $3 or even $4 per gallon and sad to say cigarette tax was just to much for people to make mortgage payments here.

One thing about my area. In the 90s many people were moving from the city out here and at 80-90 cents per gallon people didn't care about the long drive and big gas gustlers suv and old v8 boats. I'm far from everything. Were located in the middle. Long haul to Youngstown long haul Akron long haul to Canton and decent haul to Ravenna Kent.
 

MrX

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Just to add one more thing. I was one of the lucky ones that didn't lose my home but not exactly a winner. When I bought my home I was very careful not to put myself in trouble. I bought the cheapest home I could find. I felt lucky to get my duplex for 63k in 1999. 7k in extra principle and 10s of thousands in up grades. 18 years later I still owe 32k and see homes better then mine down the street for 20k you can see how people here must feel
 

Lee

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Are you saying you know someone who got a home loan with 580 score. If so it's surprising to me but guess it has a lot to do with your area and what the bank considers a risk. In my area even though its not a bad place to live I believe many people over inflated prices in the day so when the banks went bankrupt for giving loans to unqualified people and received the bailout not to mention gas prices going from $1 plus to $3 or even $4 per gallon and sad to say cigarette tax was just to much for people to make mortgage payments here.

One thing about my area. In the 90s many people were moving from the city out here and at 80-90 cents per gallon people didn't care about the long drive and big gas gustlers suv and old v8 boats. I'm far from everything. Were located in the middle. Long haul to Youngstown long haul Akron long haul to Canton and decent haul to Ravenna Kent.
I am saying I can get you a home loan with a 580 score. Realtors mis lead people all the time on their mortgages. They think they know things they dont. I have done loans in every state, so that is not area specific. And the banks really dont take the risks much any more, 99% of mortgages below 424k are through fannie, freddie or ginnie.

I have done 3,000 mortgages in my career and got called into this thread for a reason.

The bailout was a joke, as the banks that got the money didnt need the money but forced the banks to take the money to pay interest on it to the fed, who needed the income. The banks were not in public place to complain because everyone hated the banks, even ones that didnt do anything, so they paid back the interest and moved on.

But, I really am not here to correct your misconceptions (and others) how the mortgage industry actually works, but I will tell you its nothing like you think.
 

MrX

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I am saying I can get you a home loan with a 580 score. Realtors mis lead people all the time on their mortgages. They think they know things they dont. I have done loans in every state, so that is not area specific. And the banks really dont take the risks much any more, 99% of mortgages below 424k are through fannie, freddie or ginnie.

I have done 3,000 mortgages in my career and got called into this thread for a reason.

The bailout was a joke, as the banks that got the money didnt need the money but forced the banks to take the money to pay interest on it to the fed, who needed the income. The banks were not in public place to complain because everyone hated the banks, even ones that didnt do anything, so they paid back the interest and moved on.

But, I really am not here to correct your misconceptions (and others) how the mortgage industry actually works, but I will tell you its nothing like you think.
That's good info. I know someone that could use your help. As I said before my dad recently bought a home. He had 680 credit score and couldn't get a loan. He had to rent for over a year till he raised it to 700 he just couldn't get a bank to loan him money. His dryer caught fire and his house burned down in lake Milton. He works at General motors so makes descent living and thought he would get a home quick but that was far from what happened. He could of used your help as well. I don't know why it was this way
 

MrX

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One more thing. If it's not lack of loans givin to people in my area do you know why the homes are selling so low? And can I exspect them to return sometime?
 

Lee

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One more thing. If it's not lack of loans givin to people in my area do you know why the homes are selling so low? And can I exspect them to return sometime?
Market reset. The subprime market allowing no money down and 500 fico died in 2008.

Then the economy tanked, and debt ratios where lowered from 65 to 45 on conforming loans and lowered to 55 on fha loans. (the biggest true issue in the market)

The economy has been flat for 10 years. While more people are back to work under Obama, there hasnt been a true income increase in over 10 years. The fear of losing what we gained caused the Fed to keep the fed rate at zero causing very slow growth in GNP and income.

Plus you live in an area, NE ohio were people are moving from not to. This causes a surplus in your market. All these factors do not loom well for your housing market.

When will it return? Who knows? Maybe if global warming continues and a very high pace your weather will get better and people will be forced from the south to the north and your market sky rockets.

Since that is not likely, i dont see 2007 prices coming back for a decade or 2.
 
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MrX

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Market reset. The subprime market allowing no money down and 500 fico died in 2008.

Then the economy tanked, and debt ratios where lowered from 65 to 45 on conforming loans and lowered to 55 on fha loans. (the biggest true issue in the market)

The economy has been flat for 10 years. While more people are back to work under Obama, there hasnt been a true income increase in over 10 years. The fear of losing what we gained caused the Fed to keep the fed rate at zero causing very slow growth in GNP and income.

Plus you live in an area, NE ohio were people are moving from not to. This causes a surplus in your market. All these factors do not loom well for your housing market.

When will it return? Who knows? Maybe if global warming continues and a very high pace your weather will get better and people will be forced from the south to the north and your market sky rockets.

Since that is not likely, i dont see 2007 prices coming back for a decade or 2.
Wow not what I was wanting to hear but thank you very much for your informative post.
 

IWantAKouki

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Anyone willing to give me a little feedback on my house selling?

Originally listed in I think May for 210. I thought it seemed high but I'm not a realtor. We got an offer at asking but it was a VA loan. Home appraised for 195. That fell through, back on market. Got another offer pretty much at asking but it was contingent on them selling their place in the Falls. My realtor said it wasn't a big risk since the Falls is a super hot market. Two weeks later, they can't sell their house. Back on market. Eventually they sell their house and re-offer on ours. We accept, two weeks later, THEIR buyers backed out. Back on market. Got an offer for 192, cash, ten day close, they asked if they could start moving stuff in early, shit they even had cable box delivered. Ok, fuck it, let's do it, I just want it to be over. They didn't like the home inspection and backed out (said it needed like 10k in repairs - my realtor said the inspector was very critical, etc etc).

Oh and during that crazy rain a month or so ago the sump pump failed and a downspout was disconnected (I forgot to re-connect it from a diff repair) so that sucked, water in the basement.

So now we are at the end of summer, got a 190 offer, another VA loan but they are pre-approved and we already have the appraisal. We have an open house scheduled for this Sunday. My realtor is afraid that if we wait two days we would risk them moving on.

The house has a pool that I never opened this year, because I didn't think we needed to with the market being what it is. Now it's green from algae and would take me a few days to clean it up. Was going to have it opened for open house but now I think its too late (took longer than I expected to just fill with water).

The house is definitely dated, I can PM the listing. There's some electrical work that needs done, shed roof, house roof is going on ~22 years. Furnace and AC are old, kitchen and baths haven't been updated since probably the 90's. Landscaping is kind of a mess since we haven't been living their this summer. Deck needs re-stained, pool needs re-painted (but functional).

TL;DR - originally listed house at 210 at beginning of summer, various deals fell through (most recently from inspection saying it needs $1000's of work), now have an offer at 190 but have an open house scheduled on Sunday. House is dated but perfectly livable.
 

Lee

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Anyone willing to give me a little feedback on my house selling?

Originally listed in I think May for 210. I thought it seemed high but I'm not a realtor. We got an offer at asking but it was a VA loan. Home appraised for 195. That fell through, back on market. Got another offer pretty much at asking but it was contingent on them selling their place in the Falls. My realtor said it wasn't a big risk since the Falls is a super hot market. Two weeks later, they can't sell their house. Back on market. Eventually they sell their house and re-offer on ours. We accept, two weeks later, THEIR buyers backed out. Back on market. Got an offer for 192, cash, ten day close, they asked if they could start moving stuff in early, shit they even had cable box delivered. Ok, fuck it, let's do it, I just want it to be over. They didn't like the home inspection and backed out (said it needed like 10k in repairs - my realtor said the inspector was very critical, etc etc).

Oh and during that crazy rain a month or so ago the sump pump failed and a downspout was disconnected (I forgot to re-connect it from a diff repair) so that sucked, water in the basement.

So now we are at the end of summer, got a 190 offer, another VA loan but they are pre-approved and we already have the appraisal. We have an open house scheduled for this Sunday. My realtor is afraid that if we wait two days we would risk them moving on.

The house has a pool that I never opened this year, because I didn't think we needed to with the market being what it is. Now it's green from algae and would take me a few days to clean it up. Was going to have it opened for open house but now I think its too late (took longer than I expected to just fill with water).

The house is definitely dated, I can PM the listing. There's some electrical work that needs done, shed roof, house roof is going on ~22 years. Furnace and AC are old, kitchen and baths haven't been updated since probably the 90's. Landscaping is kind of a mess since we haven't been living their this summer. Deck needs re-stained, pool needs re-painted (but functional).

TL;DR - originally listed house at 210 at beginning of summer, various deals fell through (most recently from inspection saying it needs $1000's of work), now have an offer at 190 but have an open house scheduled on Sunday. House is dated but perfectly livable.
Honestly the biggest battle on a VA loan is the appraisal, if your realtor is worth anything, she can lock them in with them knowing there was a VA appraisal done on the house at 195k so they don't have to get one as the appraisal sticks with the house for 6 months.

You should be fine, if you want a serious conversation having done about 300 VA loans in my career PM me and i will give you my number. I didn't see this thread earlier or I would have commented earlier.
 

IWantAKouki

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No problem, thanks for the info.

Honestly this has been the home sale from hell. It's kind of funny really. I started filling up the pool with water last Monday, to open the pool for the open house Sunday. Got the offer Friday morning. I went over Friday afternoon to tidy up, start on VA stuff, etc. I hear a trickling in the back yard. I find water..gushing out of electrical conduit that leads to the pool.

So I went through the trouble of trying to open the pool, only to have an offer prior to pool opening, after which I found a problem with the pool and had to disclose/fix, and now I have to have a pool inspection.
 

Lee

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No problem, thanks for the info.

Honestly this has been the home sale from hell. It's kind of funny really. I started filling up the pool with water last Monday, to open the pool for the open house Sunday. Got the offer Friday morning. I went over Friday afternoon to tidy up, start on VA stuff, etc. I hear a trickling in the back yard. I find water..gushing out of electrical conduit that leads to the pool.

So I went through the trouble of trying to open the pool, only to have an offer prior to pool opening, after which I found a problem with the pool and had to disclose/fix, and now I have to have a pool inspection.
You cant close on a government loan with an empty pool anyways, they are really never meant to be empty. The appraiser would have made the appraisal subject to pool inspection.

Like i said, your realtor should know this type of stuff, typically allot of them don't, thus why I have very little respect for most realtors.
 

Misc Costs To Finish Browns Site

Total amount
$750.00
Goal
$750.00


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