Real estate guru's

[black2002ls]

now now, leave the pissing match to the urinal!

we homesteaded as soon as we could.

Still waiting on the comps from the realtor, though at this point, signs are pointing towards a refi and staying put. We need to finish the remodel on both bathrooms anyway to get maximum dollar.

[bcoop]

Obviously you didnt read the my sentence and see the "AND HOMESTEAD" part. He could have moved in and if he doesnt homestead it for 2 years, he will owe capital gains ya dick

I can't find any documentation to support your claim. You only have to meet ownership and use requirements.

[David]

I'd keep it, rent it out, and then do it again.

[Grimpala]

What's the address? I have a friend moving this way from Ft. Worth and is looking to rent something in Greenville April 1st.

[black2002ls]

What's the address? I have a friend moving this way from Ft. Worth and is looking to rent something in Greenville April 1st.

Looks like the plan is to stay put for a while. There are some really nice town houses that are 3/2 for rent just down the street from us, I can get you the address on those.

Our market analysis just came back. Comps are showing an average of $92/ft. That would put our sale price at $137K in the mid range. With the renovations we have done, we should end up in the higher end of the spectrum, closer to $100/ft putting us right around $145K. After taking a step back, getting over the shock of being able to pull $50K plus out of the house ($40K after figuring in renovation costs), we are going to ride it out. Greenville is growing, the average $/sq ft has increased about $15/ft over the last 12-15 months. With the new developments, both residential and commercial, coming to town, we should see a steady increase for the foreseeable future.

Thank you for all of the rational comments!

[akfodysvn]

How much of your own money is in the house? What is a conservative rent rate per month? What is the current mortgage? What did you pay and what had a realtor told you its worth? Very few people can accurately price their homes because of personal bias. Insurance will increase when your policy changes for it being rented.

You can still get tax free sale if you sell it after renting it for a couple of years. The rule is you must have lived in it as your primary residence full time for 2 of the last 5 yrs. That's the basic info but more details to be had.

I did the same thing and my home rents for 600 more than the mortgage as well. For us it makes sense. You can create as many qualifiers as you want to weed out bad tenant applicants. Do your due dilligence and don't make concessions for any applicant. Read up on your state's landlord tenant laws. My tenant has a gross income that is about triple my income.

You do not need 6 months of rents before purchasing your next home. I bought our new home before we even had a signed lease. The income from your rental is not considered income by most banks until you have it on 2 yrs of tax returms.

Have you looked into refinancing? You may have appreciated the home enough to recoup your invested capital. Just about any bank will lend you 80% of appraised value. Rates are higher than when you bought so that's something to consider as well. However if you get most of your money back out your returns % wise are much higher.

Have you considered buying a duplex? Live in one side and fix up/rent the other. Then move into the nicer unit and fix/rent that side. You can get in with an fha loan and refinance when your are done fixing it up. You should be able to recoup all of your investment pretty easily and have forced appreciation while increasing rental rates. You could do the same concept with a live in flip of a SFH. However with a young baby it would be nice to have a clean and safe space.

[black2002ls]

How much of your own money is in the house? What is a conservative rent rate per month? What is the current mortgage? What did you pay and what had a realtor told you its worth? Very few people can accurately price their homes because of personal bias. Insurance will increase when your policy changes for it being rented.

You can still get tax free sale if you sell it after renting it for a couple of years. The rule is you must have lived in it as your primary residence full time for 2 of the last 5 yrs. That's the basic info but more details to be had.

I did the same thing and my home rents for 600 more than the mortgage as well. For us it makes sense. You can create as many qualifiers as you want to weed out bad tenant applicants. Do your due dilligence and don't make concessions for any applicant. Read up on your state's landlord tenant laws. My tenant has a gross income that is about triple my income.

You do not need 6 months of rents before purchasing your next home. I bought our new home before we even had a signed lease. The income from your rental is not considered income by most banks until you have it on 2 yrs of tax returms.

Have you looked into refinancing? You may have appreciated the home enough to recoup your invested capital. Just about any bank will lend you 80% of appraised value. Rates are higher than when you bought so that's something to consider as well. However if you get most of your money back out your returns % wise are much higher.

Have you considered buying a duplex? Live in one side and fix up/rent the other. Then move into the nicer unit and fix/rent that side. You can get in with an fha loan and refinance when your are done fixing it up. You should be able to recoup all of your investment pretty easily and have forced appreciation while increasing rental rates. You could do the same concept with a live in flip of a SFH. However with a young baby it would be nice to have a clean and safe space.

Thanks for the insight. I'll see if I can touch on everything you mentioned.

We purchased for 92500 We have spent 10-12K in remodel, either initial remodel or re-doing the quick things we fixed/re-did. The realtor we had run comps showed a price/ft of $70-104 with an average of $92. A lot of these homes were on the market in the last 24 months previously and have been purchased, rehabbed, and listed. None of the re-habbed homes are at the level of our house. We did some "no no's" in the eyes of the real estate world, such as complete kitchen remodel, however, I guarantee what I spent on my kitchen remodel is equal to or less than what people would spend on a "basic" redo thanks to my industry connections. We are 1494 sq ft, which at the median per foot sale price, we are at $137--- which would put us up $30-35K once mortgage was paid off and we "deducted" the cost of rehab. Take realtor fees and we are $28-30K.

Our current mortgage is between $800-900, depending on how the taxes fall that year and whether we had an escrow overage or shortage. This includes PMI. I reached out to SVTLurch earlier today to see if a refi is a solid option with the rate increases that have come down. We shouldn't have an issue showing 80% equity with the current market.

As for duplex, there isn't much in the way of duplexes available out here. Our market was stagnant for a VERY long time and has only recently started to improve. Altura has just started a new subdivision behind my house, and their base prices are $107/ft, I'm not sure what their standard finish out, out here is, though I would bet that my house is on par, if not just a step above, what they are building.

[8mpg]

I can't find any documentation to support your claim. You only have to meet ownership and use requirements.

It looks like you are correct. It has always been explained to me by many people that homesteading was the proof of use requirements...but the IRS says you it needs to be

Main Home
If you own or live in more than one home, the test for determining which one is your main home is a “facts and circumstances” test.

The most important factor is where you spend the most time. However, other factors can enter the picture as well. The more of these that are true of a home, the more likely it is your main home.

The address listed on your:

U.S. Postal Service address,

Voter Registration Card,

Federal and state tax returns, and

Driver's license or car registration.

The home is near:

Where you work,

Where you bank,

The residence of one or more family members, and

Recreational clubs or religious organizations of which you are a member.

[akfodysvn]

Ok... so your answer wasn't very clear but I will assume you think the home is worth 140k. I think that's what I deducted from your response. You did not talk about how much you put down out of that 92k... but I will assume 20% and closing costs. That means with rehab you would have around $32k invested into this home.

Why is the realtor giving you such a broad generalization... so much more goes into a home than cost sq/ft. New builds can be put in that category a little easier. Your realtor if good, should be able to put you within $5k of what it will sell for in under 30 days. In our market here nothing under $150k for a single family home lasts longer than 30 days on market.

So Refinance 80% of 140k at a current rate of 4.75 because it is an investment property. You should be able to get a loan for $112k and roll the closing costs of $2k into the loan. That means you would have only about $10k invested into the home to still own it which is great.

P/I- $594/mo
Taxes (est) $200/mo
Ins: $75/mo
Total: $894/Mo

You mentioned your neighbor rents for $1300/mo so lets use that.

Assuming the above costs... and then include vacancy (8.3% which is very high), maintenance (5%), and capital expenditures(5%).

Your cash on cash return is going to be close to 25% annually. You'll have around $10k in the deal after refinance costs and make around $2400/yr after those expenses. It's not a large sum of money but it's a great return on your investment. Let's not forget rents will go up over time... you have locked in at a great rate we may never see again. Now figure in the equity pay down...

Your IRR would be greater than 40% when you figure equity pay down included.

You also get to deduct mortgage interest paid and depreciate the asset.

As mentioned above this is the buy/fix/refinance/hold strategy. Or the BRRRR... Buy, Rehab, Rent, Refinance, Repeat

[Buick355]

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