5 years to Freedom

Hi all,

Quick update and diary keeping so I can read later.

Added another $500 to the personal emergency fund today.. ALMOST THERE.. approx $1800 left to go to finish that

First payment to hard money loan done.. WOW

Taxes not done yet.. still working on raising refund. initial hope was $14000 (WOW..) based on a quick look and loss carry forwards.. however loss carryforwards expire or go away w the home they are for.. a more detailed look Tuesday by the accountant put me at only $7000.. he is seeing if he can revise it.. reason for MEGA decrease was because some of the loss carryforwards were on a house that went away. News soon hopefully

Still need to talk to my aunt who pledged $7000 in the past if the house came through (which it did!!)

and that loan I am owed $6000 (figure that will come in the Spring)

All rents basically in.. no issues.. still need to talk to water company on reimbursement

No new news just waiting.. working on house (fun stuff and tightening up) and hoping for warmer weather

Also trying to 'do well' at work. I am up for renewal in June but will make the request late March

Have not worked or started consulting stuff. been stressed w not for profit that I either need to give away or clarify and get control over (feels out of sorts and running a little off the rails now.. adds stress to me)

Hope everyone is doing well.. lots of good news on the posting.

Can not wait til both emergency funds are built so I can start building again.



My accountant and I talked 2 nights ago and I was all stressed about rebuilding my funds and he said to relax and enjoy the positive and said I am 'almost 80% there to my goals'.. That is true never really thought of that but my big goal was to get $8000 monthly cash flow in 5 years. if I just keep the homes and 3 units I will be at almost $6000.. I am building emergency funds now (will be done this year), the rest I can invest, I have health insurance, own my house now (w a mortgage), so I think I should give myself more credit than I do sometimes. but still keep focused and take some more time to have fun too.

HI all,

Guy who was moving out of one of the 6 homes .. moved out! AND we got someone who moved in on the 1st.. at $50 more and we still have that garage to rent. Trying to cut my losses every month. So far in 11 months. I have cut the estimates and averages by about $1680 a year. This will be the year of rent raises (fingers crossed) and renting that garage out..so trying to cut it more... expecting taxes to go up this year too.. so looking at every cost. only costs I have are maintenance/repair, management (can not reduce) and vacancy. Opportunities to get more income include that garage, raising rents and laundry at the 3 units..

Anyway.. found some old notes from 2008. with what I had then.. interesting. I tried to figure out what I would have had now if I had gotten 8% interest for 6 years with no further deposits.. (on the right side). Something to look at. I want to make up what I had and more.

News from ACCOUNTANT TOMORROW..(hoping for big money big money big money) on my tax return.



and the hard money payment has not come out yet.It was due to be withdrawn the 1st.. so should come out today.. I am feeling 'sortof on hold' as I wait for that to come out.

Have a great day all.

All,

For those that do not know I have a 2 flat ( is not listed in the side or any calculations as it was known it was going away)that I am letting go via foreclosure. It does not impact me or my credit as I filed for BK Chapter 7 years ago. I thought I had til May though .. looks like the sale date was set for 4/17.. wow..earlier than I had thought.

The other property manager.. the guy who did not return my first call etc.. said he did not want the homes (via text!! disappointing). I asked him why and it appeared he did not want stress trouble etc as they are already managed by the other property manager who he knows.

Upsetting. I sortof took it personally.. I am waiting to hear if the 3 unit property manager wants to take all or some.

In the meantime I need to work on a way of how to get the original PM for the 6 homes to be tighter . He is (hopefully_) getting this one house rented super quick which is nice. Maybe more written communication vs verbal.. guidelines for when I am involved.. will think on it and ask some folks to help me draft some stuff up.

Maybe I need to be more involved. give him more guidance.

I do not know. upsetting. feeling down. I hopefully talk to my accountant today and he is always 'logical' and 'black and white' which helps me. I can be more emotional at times and forget the positive.

Quick update

I have been working w this Mint.com site and it is helping me see sortof hidden areas (fastfood, misc stuff, auto withdrawels) etc.. Very good for that

Having a hard time getting my transfers to show up correctly in an easy way(I do all sorts of transfers from account to account to savings and the LLC for the real estate..) but working on it. I may just drop them from the budget.. do not to waste time and I am using mint to get a handle on my unfixed costs.. food, misc etc..

Good idea to do.. and will definately help me track things in the future. Overall food costs (w fast food) probably will end at $390 for the month (includes grocery misc). I think this is super high.. $28 a month for more auto withdrawals I need to cancel.

New renter for that one home is looking positive. Income proved out. Hoping to sign a lease tomorrow or Sat. I will keep all security for current tenant (current property manager says we may need to do some misc cleaning but overall looks good)..I am going to suggest we give the renter a break of some amount and have them clean.. I will use this extra windfall (security deposit) to build back up the repair escrow (that the prop manager holds) which suffered that large expense last month of $2000 for water.

Asked good property manager which homes she is intersted in..

Still waiting to hear from other guy. Maybe he did not get message? not good sign.

Water company is 'waffling' on reimbursement. Talking to president tomorrow. This is the EXACT reason I do not like the current property manager. I may be stuck with this $2000 bill because things were not run tightly. Upsetting. Bill he gave me was not detailed. I will ask him for a detailed bill and then call water company president. VP said 'you know we are just a small company. we do not have a lot of money.."

Will set up consulting work this weekend (start getting that organized)

Doing taxes MONDAY!! (or sooner)... fingers crossed .. hoping I get a LOT back. total Fed tax paid was $14k. so I will get some percentage of that back.

and my FIRST hard money mortgage payment comes SATURDAY. $2970. Everything is on hold til I see how that works... so thinking I will end the month w $2800 to go to the personal emergency fund but holding that in my account into this big withdrawal goes through.

About it for now. I want to hear back from these other property managers. Upsetting that I have not.

HI all

Busy time and INSANE at work. Been feeling scattered and a bit stressed.. up and down...

Updates

DENIED for Chase Freedom (big mistake to apply. hellooo.. what was I thinking)

3 unit lady (who I love) drove by the homes, likes them, had several questions and will let me know by end of week which she can take (if if I go that route)

In the meantime she showed her prowess by getting the 3 unit guy who was late to pay FULL rent and $210 late fees and March rent. awesome! He is back on track now and looks good for the future

6 homes. another story. No good news on water issue (not resolved, but water company is working on it, digging, trying to find well, insane, saying it is too cold for a backhoe) .. they almost got it in last week w the warm up but did not.. I am asking them to put in writing they are reimbursing me for my costs.. $ TWO THOUSAND!! (yes big costs.. that was to dig up to the street and prove the water issue was not with us). I want this reimbursement!!

Also that guy who moved in 2 months ago and lost his job. He is moving out at the end of this week. Packing up as we speak. BUT we had 4 showings so far and have a tenant who looks good on the line (and she wants to move in on the 1st) AND it is good this 'lost job guy' is voluntarily moving out. I will keep at least 50% of his security to pay to fill it.. Hoping to come out ok here and rent was raised $100 and STILL getting showings. awesome.

The other potential property manager. i have asked for refernces, rates and costs.

Accountant is swamped (he is super good) and have not done taxes yet.. want this $ and to know how much it is. calling him today again..

Should end the month w $2500 to go towarrds emergency fund. would put me at $16000 so $2k to go for normal emergency fund

AND guy who owes me $6000 may have it 'soon'.. he is sellng his motorcycle and has a showing today. And HE called.. fingers crossed.. all goes towards rental emergency fund.. he will give $5k after motorcyle sells and the rest later. Thsi will go to the rental emergency fund.

$4-8k tax refund will go to rental emergency fund as well

and may have $5000 from another source

Have not sold car yet but am definately warming to the idea.

Been doing odds and ends on the house.. tightening things up. have a SUPER handy boyfriend (engineer and grew up on a farm.. good combo).. put in new lights in laundry, and back room, fixed shower faucet and other random things, helped me move and throw out things, set TV in exercise room.. overall house looks 'neater/ cleaner' and definately more tightened up.

Can not wait til Summer to tighten up the outside..

I paid an average of $45k for each of the 6 homes and pulled comps nearby for a friend and my two homes on 1 street should sell for near $100k each or one over that price..

and lastly.. 'the 2 flat'.. told tenant she had 30 days to leave.. (based on not doing egress window.. city says apartment is not legal etc).. I am concerned I am going to get some push back from her(already have). City can fine me if she is not out on time.. (April 1).. I will follow up w her every week. Told her if I get any sense of an issue I will have the city 'sticker' her unit at which point she must leave immediately.

have not started consulting work and need too.. $120 hour..I want to get over this emergency fund hump asap!! I will be more relaxed then.

Hi guys. IN an effort to be prepared and reduced risk. I have been looking into other property managers.. so if one does not work out at some point I have a back up. I can not run these homes, 3 units myself.. nor do I want too. I am also not satisfied w the 6 homes guy and wanted to see what else was out there.

Ok. .I have woman A on the 3 units. I like her a lot.. Strict no nonsense lady. People including tenants respect her. Very communicative so I am not worrying or asking questions. Sortof a 'get it done' type which I like. I give her guidelines and she gets things done within those. If there is an issue she communicates (tree fell on one of the 3 units, late rent etc). She is a realtor w an active real estate office and has been around for a long time. I trust her. Her personality is similar to mine. She has a brick and mortar office in town. She also, if my suggestions thoughts are wrong, is not afraid to point it out.

and I have man B on the 6 homes. B has 26 units of his own and also property manages full time. He is also head of membership of the local landlord association.

Problem is I do not trust person B and was thinking of finding options to him for now and 'just in case'. B has said things before that he has not done. When there are issues I am 'surprised' w the bad news or asked to 'help' and feel I have to take the ball (example the water issue at the one house). I am told things are handled and they are not. Tenants saying they are not getting called back. Several times when appointments were set w tenants and he did not show. Seems like life stops on the 'weekend'. Had a electric issues at the 2 flat and the tenant ccalled B first and then called Me because B 'does not respond'. I called B (got no response all night) and ended up sending someone over there to fix the issue. I feel the tenants do not respect him and I am not sure I do. I HAVE talked to B on this with really no results. I however have not been as strong w my words as I could be because I had no back up. I feel he may not have be up to it or too swamped. He appears 'swamped' all the time and overwhelmed. He has 'fixed' things 2-3 times that should have been replaced..costing me more $. Late fees being dropped etc etc.

Options so far

1. person A has the address list and is driving around (when the snow clears up) to see if she can take all or some of the homes. News this week.

2. Went to meet w this guy Saturday, ex marine, has 50 units and manages 50 more, office in town, investor and more of a 'get it done' attitude, I felt more of a fit with himn. He charges 1% more and some other costs but if things are 'handled' and I can trust him .. seems worth it.

Plan is to wait til Wed/Thursday and see if A has time for more units and write up what I really want.. so I am clear and then get some input, talk to these folks (new guy and A) and decide.

Maybe I talk to person B first .. probably.. but just feeling he is not up to it. If the tenants do not respect him.. they take advantage and in so doing take advantage of me

In general I feel the 6 homes are not run 'tightly' and some of the things that have occurred just make me not feel 'secure' that he is handling things and I am always feelgin I have to call him.

So.. news this week.

Hi all

That 3 unit guy is paying and getting caught up in full next week. Love my property manager on this one!

Testing day at work went well (I run datacenter migrations for this company for banks.... crazy insane job!)..I will ask for my extension in mid March though. Boss is gone ALL APRIl so I can likely work at home more then.I currently work at home 2x a week.. but lots of people work at home there. normal for company..

and talked to my accountant. he thinks I can get between 4-8k back on my taxes. Hopeful look!! that would be awesome. News next week. We will meet then.

I want a cash cushion... used up all available cash w that short refinance. After the 2 flat drops... unless I pick up some consulting jobs (which are fun and have 3 possibles in the works) I am going to have a BIG drop in savings and my plan is to fund BOTH emergency funds this year and breathe a little easier.

Happy Valentines Day all. The sun is shining .. feels good and fun to see it through the windows...and I got a free coupon to wash my truck (filthy!).. and am then going to dinner.



Rachael

Updates

Chase Sapphire . did not apply for.. afraid I would get denied

Did apply for Chase Freedom

Going to Costco Sunday to check it out

Having a good rental month. all mortgages paid and costs were low.. putting this monies toward my emergency funds once I get paid tomorrow and have final accounting on rentals.. (early next week) and setting up a better routine and filing system.. feels good .. more in control..

6 homes person (who lost his job). looks good to find another one and stay on.. (not sure yet though of course, til rent is paid)

and news on 3 unit person tomorrrow

I want to work on extra income here (that side work I do) .. get my 2 funds funded faster.Be So happy when I have these emergency funds funded!

hi all,

Back to tracking things so I can review this later and learn some stuff and maybe you can learn from watching.



k.. starting Dr Atkins for a week. get a jump start on things.. I am working out which feels good but got to lose those 8 lbs I picked up w the short refinance 6 month saga

GOALS.. (still firming these up) but for sure $18k to personal emergency and $36k to rental emergency fund

Should be able to complete personal emergency fund by April 1

I will be so much more secure these funds built.. hello??!!.., why did I not think of this before

I DID contribute $3500 to Roth this January and for now keeping 401k at 10% (get 3% over that from work too) will likely decrease once 2 flat drops off (3 months??)

'6 homes'.. one renter lost his job.. paid his rent but represents a risk.. property manager is talking to him today to see how we look for next month or if we need to take aggressive action. I talk to Prop Mgr at 6

'3 units'.. one renter did not pay rent this month. these are the buildings I have that super old timer prop mgr on. nice older lady. straight as a whip.. she says she will have it worked out by Friday. she knows this guy and his Mom and he has lived there for 6 years already. 5 day notice given...so hoping for resolution in some way. also discussed raising rent strategy. we will start raising w the first renewal in April and have many in the Fall. also going to get the Fall ones to renew on a year and 1/2 or something so they are stagggered. right now 4 people have leases ending in November. not good.

My house is a ranch so lower angle roof.. had to install gutter roof heaters last week ($290) to prevent water dams etc.. VERY bad winter

one of the 6 homes (they pay rent). the water companies lines froze (theirs not mine) and they have been out there trying to fix it for the past 2 weeks but bringing water in the meantme.. they are digging up all sorts of holes in the yard but the city attorney is involved (I called) and they will be fixing the landscape, giving this lady 1 year free water and reimbursing my costs to prove it was not my pipes that froze. Why don't I get 1 year free costs!!

So.. some excitement and risk but to be expected w 6 homes and 2 3 units and being managed but would be AWESOME if I had those funds built and of course had these paid off, had thousands in investmnts etc etc.. but I am where I am at

May sell Genesis.. still thinking but can not even get it down the driveway right now or on the street w the snow... so on hold.

MONEY

Goal this week
1. visit costco. see if worth it
2. look into Chase Freedom/Sapphire, see if worth it
3. form a plan to start my consulting again /$120/hr.
4. pay all rental bills.. and GET ORGANIZED w a routine.. way disorganized this month.. crazy w the house and work
5. figure out an easy plan to track unfixed costs.. tried Mint. not liking it. may do Excel.

Hi guys.

Been quiet a while as I am SWAMPED at work (from doing very little the past 4 weeks) and getting over the shock of this house I bought.. also was getting a little down and started losing my confidence a bit w my plan. I want the advice but can not lose my confidence so took a break there and learning.. growing on my own too.lots of good resources folks have referred me too.I would not have started the 401k, Roth and some other stuff without the support of this blog or accountability

I strongly believe in the power of intent (the book by Esther and Jerry Hicks) and the phrase 'if you beleive you can you can'.. can not really get super far when you are afraid you are going to fail or focusing on negative.. so acknowledging the challenges but shifting my focus towards 'I can do it' and solving them

This years goals are in flux.. but I am starting to think about the following
1. Finish personal emergency fund by April 1
2. Build rental fund to $36k AND THEN start saving/investing

so until then.. pretty much all savings goes there

I feel comfortable w that... actually having a $36k rental emergency fund would feel SUPER AWESOME!! WOw!! Very good ideas (thanks to the readers who suggestd it)

Also will ask for extension in March (boss is gone all month April) feel good I will get it but will know then so can start looking if need be

Other than that.. gained (cringe).. probably 8 pounds these past 4-5 months ( I tend to stress eat .. shhh! )of the 'house saga' but on a good note I tend to be fit and trim and already got my work out room set up.. and been starting again so feel it dropping already. I am so excited about my workout room and that I can settle in the house. already having folks over.feels good

Feel like calling my ex (I will) and say I got the house. We are on good terms and he knows how hard/insane the road . So excited!

Life is good.. getting 'settled'.. and figuring out 'the plan'.. need to get that emergency fund built and work on tightening up the rentals.. being proactve... learning and getting ORGANIZED.. Lot to do but also want to enjoy life a little.. Wow I did it (w the house)..

All rents in though so feeling good..and winter is almost over (feels great!)

Here is to living and learning and moving on.

Good to read everyones posts and blogs.. lots of success out there. immpressed w Petunia100 and her month budget and actuals. I need to post that!!

Guys,.

First off THANKS for the advice.. thoughts.. sometimes hard to hear . special thanks to 'Another Reader' for great points

Ok.. for those who have not been following me. I have a 5 year plan... started approx 6 months ago.. goals for that plan are to the left. As part of the plan I bought 6 homes and 2 3 units on aggressive payoff terms (5 years-6 homes, 7 years-(2) 3 units). I can not now change these payoff terms and they were based on the fact that I would have no big expenses (house)on the first 3 years. I DID NOT expect to be able to settle on my house or buy a house for at least 2 years. I just closed on my house (bought out the mortgage at a discount.. all good but leaves me VERY cash poor and in a risky position). Doing a short settlement w the bank for the house (I live in) was at 12% and I can not refinance out to normal rates for between 12-18 months. I used up all my liquid savings for the points (6) and fees for this loan and tax escrow. I Retained my emergency funds (rental and personal). House I live in is in very good shape. 3 units in very good shape. '6 homes' are in 'ok;' shape and more volatile right now until we 'smooth them out'. All are run by a manager. I have full taxes escrowed for this year for MY house ($10k) and escrow for the 6 homes/3 units in the payments.

Other background. I founded a not for profit years ago that I get paid approx $1500 a month for (I was going to turn that over to another NFP this year but with the house payment. thinking maybe I should wait a year). I also have a 2 flat (in foreclsoure being sold in next 3-4 months).

ok. Income and expenses attached

Note: salary is NET (including 10% 401k)
Huffman is the 2 flat (dropping in 3-4 months)
Utility reimbursement will drop w Huffman
Not for profit I can control when I drop that
I DID drop the Genesis car payment for a year

Please let me know your thoughts

I want to SAVE (if poss) build cash reserves and build portfolio so I have more cash (not almost all real estate). I also need to be SAFE because if I miss a payment the entire house of cards may fall down.

Dropping Huffman subtracts 2093 from my income
Dropping the NFP subtracts $1558 (1000 less income, pick up $558 costs)
Dropping both subtracts $3651 from my income and I AM NEGATIVE (I can decrease 401k and can take side consulting jobs. have not pursued that at all but have 2 people wanting help now.. $250 for both..estimate can make at least $500 a month w that.. cash )

Full salary/no 401k is $6776

Contract (for work) up 6/2104 but looks good (tho not guaranteed for renewal). Estimate 3 months to find a job if I lose this one. I will know on renewal in Aprl and can start to look then if necessary. This is right in the middle of a big Migration.. so possibly unlikely they will want to give me bad news then.

Networth is correct ('left' next to reserves meant what was left to meet the max reserve I need)

Attached net worth, income/expenses, paycheck distribution. yoou will see costs for paycheck 1 exceed my paycheck so I must save part of paycheck 2 to meet paycheck 1's costs

Net worth update

House added a lot of equity

house value at lowest of realtor sales estimate - commission
everything else at purchase price

Goal this month..stabilize.. rebudget.. count my money and adjust my plan. I need more CASH LIQUID savings

Upped 401k to 10%.. if I change it to 12% I will max out at $17500 w the employer contribution.

Goal to get emergency funds at max.. I am approx $12k short across both.

Also want to find money for hardwood floors in this house.. got a friend who can help install but got several thousand in materials.. (not figured that out yet) and I feel since the house is now mine.. I want to 'fix improve' several things. most small. some larger.. but just excited. I will make a list and prioritize. i want to enjoy my 'new house'.. got to save money for the yard.. I need some help this year.. getting it in maintainable shape and l ooking nice.. how exciting!!

MOre updates/questions later as I figure things out.

SNOW DAY TODAY

Hi guys.

I CLOSED ON THE HOUSE!!

Exhausting stressful day ( was working on last minute things all the way up to close).. but I now own the house.. on my own and it is no longer in foreclosure

Loan $297k
Value (after real estate fee) $488k if I were to sell

Has not sunk in yet..but it will in the next few days or once I can sit down and relax.

Thanks for all the advice and support. I could not have done it without this forum.

This marks the last big thing to get rid of or to clear from the 'downfall' years. the 2 flat will fall away on its own and I will start to contact folks (esp that one guy) in about 8 months once the 2 flat drops and I have gone past the 6 months prepay period.



I am excited to start new plans and ideas now (but after a weekend of rest).. Wow!!! The loan came through.

Rachael

Hi all.

Closing tomorrow at 1pm central time (but still do not have closing docs. they say they will send tonight or first thing.)

A little anxious.

Will take out $21850 in cashiers check for closing
$17850 points
$4000 misc unknown costs (hopefully less!so get to take some of this back)

On a high note the old lender has paid my insurance for a year and is not asking for a refund so insurance is prepaid.

I will put the rest of my savings in a tax escrow $10k

I get paid tomorrow too

First payment on the new loan March 1.. $2970

Need to exit that loan asap.. yearish

OTHER NEWS

i am seeing a financial advisor tonight (set up after reading Tasha's post) bad night for it as I am wiped but still going..

I will grab a book on the way home and am seriously contemplating taking tommorrow off as sick, partially sick or work at home. .. really want ad need a 'break'. I just want to feel I can 'sit down' and relax.

I will update after close and feel excited when I can say 'wow I really did it' once I am complete w that.. has not really sunk in yet.

thanks for the help. think of me at 1 central.. prayers no more issues crop up.

Quick question to all.

No closing time yet

Other stuff.

I pay doublepayments on my car. I am so far ahead I do not have to pay anything at all until 6/2015. Interest rate 3.15. Left to pay .. around $17800. Months left at doublepayments -17.

With the new payment for the house.. I will have a very difficult time saving .. especially once I lose the 2 flat.

I was considerinng stopping payments on the car (total cost of this for a year is a $600 interest charge that will accrue) and instead use the doublepayment amount ($1008) each month to quickly build up my rental emergency fund to $15k and my other emergency fund. With the house payments I want to be as safe as possible.

Thoughts?

For those that do not know.. my house payment will be very high (12% hard money lender) for a yearish and then I can refinance out with a normal rate/cost loan.

Rachael

House update.. BPO guy called.. set up for 5pm. cancelled at 2pm. called at 4 rescheduled for same time.. cancelled at 4:10

Broker called and got in touch w lender. they just want to go with $297k.. Settlmement is $297,500. They rounded down. I asked broker if they would go higher. he said unlikely for them to go over settlement

So cash needed is approximately

$17820 points
$4000 (other costs??)
$1060 insurance
$10000 tax escrow
=
$32880

Talked to my CPA friend .. he suggests I DELAY closing til next month to save on interest.. lender wants to close FRIDAY (maybe they are not aware of extension or have some month end target)

I talked to broker in 30 minutes ish (after I talk to my friend for what words to use) and will ask if we can close in 2 weeks..

Whatever date we close. I will ask my Mom/Aunt for assitance. Aunt had previously 'pledged' $7000 but (as you recall ) loan fell through so never got it. She may help w that again or not.. Hopeful!

I have $30,000 (but can make up tax escrow on next check. you will see I am $3000 short). Tax escrow goes to me.

VERY TIRED. I want to be excited but still rushing around.. excitment will come after the dust settles I think.

More news today. Broker sending letter of intent and then loan docs in morning. I need to pay for insurance and get that set up tomorrow.

BROKER just sent letter of intent and it says 'closing date 1/31 time being of the essence'. I will still request a later closing date.. even next week.. I have taken so much time off work, have the extension and want to extend the time I pay no interst..

More news soon. thanks for the help guys.

Guys

news from lender. not super awesome

raised value to $420k (hellooo)
new loan amount $273k

with payoff of $297500, points, fees, tax escrow I would have to come up with $54880 to close

Broker was 'disappointed' and already asked lender if they could go up to 70% LTV>. (no response yet) but resulting loan would be $294k and I would need $35640 to close (with payoff, points, fees, tax escrow)

CRAZY!!

Had another (last one I am calling!!!) lender say this was impossible

Because a thing seems difficult for you, do not think it impossible for anyone to accomplish. - Marcus Aurelius

Broker called back.. "lender wants deal' they are ordering ANOHTER BPO (their cost).. tomorrow .. and will go w that value or $440-450 whatever is MORE but only 65%

Praying for good news. I am in SERIOUS NEED of good news.

Called realtor who did my report.. asking for thoughts on how to deal with new BPO guy... . would love it to come out at $47-$480 or MORE.. need to retain cash.

News soon. Thanks for pulling for me

Hi all

House update

Realtor appraisal ( very well written and substantiated)

List price $550k
Sales price $515-$525k

Wow! Average price in subdivision $575k in past 6 months

AND

bank who owns mortgage/house now gave me an extension til 2/28

My broker sent the appraisal to the new hard money lender and we await the (hopefully) increased loan value. Settlement w old bank is $297,500. Lenders points are 6. Interest rate 12%. I have $33k and the potential to raise $5-15k more. Any overage I decided I will fully fund the 'rental emergency fund' so that is at $15k

Prayers!

(for those who asked I have no other option to keep the house except to settle out w the bank.)

Update.

Broker called. He is at some lenders convention in Dallas and the PRESIDENT of the company we are going through for the loan was there and they had lunch. President said they really liked the deal, neighborhood and the house and will Definately look at realtor report.. also said he may go to 70% to do the deal. Realtor sent me a text asking for my email addy and is sending me questions tonight for his report. Target for his report Monday 3pm


I want $312k.. 65% of 480k or 70% of 445k

This means I only have to come up with $7-8 grand and $10 k tax escrow (that I hold) and $1060 for insurance.

FINGERS CROSSED and prayers.

Payment tho w $312k is $3120.. need to exit loan asap!!! (but looks like have to hold it a year).. need to get rid of that 2 flat and continue to verify the loan requirements for my exit lender so I am sure to meet them.

312k at 7% is only $2075 or 6% $1870

Rachael

Mark (this is the mortgage broker),

It is my position that the BPO should not be seen as relevant. Guy was not local, was unfamiliar w the area, has very little experience pricing and selling homes as a whole and all the homes he did work on were lower priced short sales. He also admitted to me he could not find enough relevant comps and the report itself contained major errors which either indicate lack of knowledge or extreme carelessness. I am unclear on which one or both as some of the errors do not make logical sense (it is not logical to think having more than twice the lot size is worth $480 more or that square footage can be adjusted at $10 a square foot ). This guy got so lost on the way to the home.. I had to drive to meet him 'where he was' and lead him to the house

Major errors exist in his report such as
1. comps from different zipcodes, totally different neighborhoods, different school districts. "comps" were not relevant
2. undervaluing lot size (adding $480 for a 1/4 acre lot size difference, for example)
3. mis-stating relevant facts on my home as well as other homes
missing fenced yards, finished basements, updated items, major improvements
mis-stating lot size for my home and other homes
listing a 'crawl' as a full finished basement
average rent on the home is $3200, not $1200
4. adding square footage adjustments at the value of $10 a square foot
5. some comps were frame (vs brick) with no price adjustment
6. failing to account for updated status of my home as compared to other homes
My home has new kitchen, baths, tile, expert finished basement. Many comps had brown VERY old vinyl, old cabinets, kitchen (evidnet in pictures easily available online)
7. using 'distressed sales' as comps including one auction sale and short sale properties

As you are aware I have asked one of the top realtors in town to come over today at 12:30 to give me a fair value of the home. I expect that value to be around $470-490k but will wait for his report. I will ask him to substantiate the value with comps and whatever else is necessary to send to the lender to revise their value.

I still do need to close by 1/31

Thanks for your help. It is really appreciated
Rachael

BIG UPSETTING NEWS!

I was concerned w the BPO guy.. he was from over an hour away, lower working class town and got so lost on his way I had to drive to get him and I did not connect with him personally very well, but I still thought the house value would be clear to him w the comps I had, homes in area etc..he did not take hte comps or info though

He MAJORLY LOWBALLED THE BPO!!!!!!!!!!!!!!!!!!!!!!!!

MAJORLY

He put the house at $397k (the bank I am buying it from even had it higher -at $430k) . I have the BPO and he used homes in different ZIPCODES, frame vs brick, totally outdated etc.. no finished basements and differnt neighborhoods.. not similar neighborhoods at all... I called him on it and he said 'I could not find comps and your comps were miles away"

My comps were 1.1 miles away and he is an idiot.

Anyway.. long UPSETTING story short.. my broker thinks this guy is an IDIOT (I AM SO UPSET I HAVE ONLY A WEEK LEFT ) and he will talk to his lendr tomorrow and suggested I have a realtor dispute the comps. He will tell the lender I am doing that and will have it shortly. I called the best realtor (or most well known) here in town and he is coming over at 12:30.. on a coincidental note he lives in the same subdivision and was shocked by the BPO price.. and he knew the house (from the outside)

He comes at 12:30 and will write something up soon therefater

Broker says he has seem low BPOs before .. but none so poorly done or so off. He has seen them disputed and values increased though . This guy put $500 for the difference between a .16 acre lot and my .67 acre.. did not include all sorts of stuff.. jsut VERY BAD...I looked thsi BPO guy up online and dug up all sorts of bad things on him too.. I AM SO UPSET.. can hardly talk anymore.

I am going to neaten up the house again (pretty neat from the other day) and read and go to bed.

Onward

I WILL get this house damnit! and I need to get this loan firmed up ASAP

Business loan fell through
Low rate person fell through

Got 1 lender w 7 points, 18 months, 12 percent, wants an appraisal first and can not close by next week
and 2 at 12% ONE YEAR.. also want an appraisal..and can not close by next week

I need to firm up this 'bird in the hand' immediately.

Thanks for listening and the support.

Rachael

Ok.

BPO guy just left.. hoping for $470-480k. I should know TOMORROW

Low rate lady was not able to come through
Referred me to 2 other guys (1 has not called, 1 is at 13%)

Got other acceptances contingent on my sending in various things but n one less than 12%

Have not had time to submit all info for business loan.. will submnit today or tomorrow

providd they increase loan to 65% of whatever value BPO comes out at , if house values at

$470k. I have to come up with $14k + $10k tax + pay 1 year insurance

$480k.. I have to come up with $8k + 10k tax + 1 year insurance

Hope to hear TOMORROW

I want to get a firm approval, amount and close date

Title in works

if house value at only $450k I have to come up with $22,900 (OUCH)+ $10k tax + one year insurance

PRAYERS.

I showed BPO comps, pictures of house before I bought and after and a list of changes I made . he said he was not able to 'take anything' from me so just 'viewed info' and left it

he said he felt 'ok' w value if comps were within 1 mile or so. I have a ranch so hard to find comps as their are less ranches but my comps are between 1.1 and 1.7 miles away

Fingers crossed!!!!!

Update

BPO TOMORROW at 2pm. trying for $470k
orderd title ,, takes 2 days
good call w LLC loan folks.. lots to fill out and submit

NO NEWS from lower point lender (although she did ask for more documents)

I want news from her.. feel 6 point guy is just too much cash!

Wish me well on the BPO..

Realtor was in same area code but not from a large office or one I knew.

Thoughts on how to make the house appraise higher ??(outsdie of comps which I have)

Thanks
Rachael

Hi all. Update.

Not as much news as I had hoped but one more day gone.

Today was a bank holiday so banks/lenders not open.

I did not hear from the 4 point person (she was off)

tomorrow
1. set up BPO for this week.. asap
2. order title (assuming the close) $5-600
3. conference call with business lenders.. 5-9% (but may not be able to close in time).. expect no final word from them until Wed or so
4. hear from 4 point person

I REALLY want the 4 point loan . I do not want to have to come up with all this excessive cash when I do not have the 'rental home emergency fund' fully stocked at $15k and being so close every month .. just lots in the air.

Exit plan.. got a lender who can loan at 2 points over whatever the 30 year rate is at hte time.. when I have owned hte house for a year (so year and a day).. provided my score is 640+, the foreclosure situation is CLOSED in someway.. (short sale best.. sold is worst but just closed).. Costs would be almost normal loan fees.. no points and can do 30 years. This rate is NOT high because the only other potential loan is FHA and their premiums, fees are so high that 2 points higher is still LESS than them. Besides it will be hard to qualify for FHA in a loan.

Either way I have these loans for 2 years but need to get out of them asap

so . say if business loan comes through (5-9%) and is longer term.. 15 years. I will just refinance right away (actually after 6 months).. hard money folks have a 6 month prepay penalty

Onward.

I am proceeding with ALL loans at onnce so I am sure one will work out by the 31st. 6 point guy is confident he can close by 31st and nwo that I understand what it takes to close. I think 4 point person can too (if they accept me.. helloo.. need to know that asap) and what the house value is and loan amount.

I will withdraw $30k from Barclays tomorrow to prep fr close. I need final amount asap.

HI all,

update.

It looks like 12% is the rate I will get. No one has beat it.

TOP 2
1. 12%, 4 points, 2 years(that is a verbal,. they are still reviewing, formal offer Monday. Thsi is being house underwritten so may be able to stretch loan to value some which is a BIG plus. see below)
2. 12%, 6 points, 2 years

I also have a business loan application in the works (LLC real estate busienss.. sortof a long shot but if it it works I have NO POINTS and 5-9%) I am getting help on that and will not know for likely a few days or a week

Plan
1. proceed with loan #2 to BPO (brokers price opinion).. same with loan #1. I need as little down as possible.

I initially had the loan amount as between $292,500 and $297,500. Problem was I had NO IDEA points or closing costs would be so high (now I know). That is approx 65% of a house value of $450k. I do not feel comfortable coming up with 4-6 points, $10k taxes escrow and potentially $4k closing costs... (see my side bar I have essentially $30k) and my personal and rental escrows are not at full amount yet.

(I am figuring tax escrow because there is no way I can escrow $8-900 a month for it.. so I need to set that cash aside up front)

PLAN. I pulled comps again and have comps at $470= (real comps.. not stretching it). I have asked lender 1 and 2 and to see if they can either go up to 68% of $450k or 65% of $470k. rthat is approximately $305k. I will have news only after the BPOs (realtor comes out and give value of house) this week. If they can do that (increase the loan amount) .. the 4 point person nets out to a cash down of $7500 (points/cost overage), $10k escrow, $1030 (pay insurance a year up front. they require it).. 6 point guy comes down to less than $30k

I have paid for the BPO ($250) for lender #2 and will set that up asap. And call lender #1 Monday for news.

Fingers crossed

My mentor say the only way he can help me on such short notice is to buy the house himself and lease it back to me (no way!)..and at 13% interest and unknown costs.

I do have my exit plan fairly well cemented.. so I only need the loan for just under a year.

More news Monday (and hopefully 4 points people come through. they are doing a CMA now and if it is strong enough will not need a BPO or appraisal)


I am still in the game.

Hi all,

no big update yet.

I hear today on all the rest of the lenders. FINGERS crossed for a lower rate/cost loan.

Current front runner is 6 pts, 12%, 2 years (expensive)

I can refinance out in approximately a year though.

I will work on lining up business credit as my next activity after the house settles in some way. IF I had business credit I might have been able to do this cheaper or easier. I AM applying for a business credit loan (I have an LLC) at between 5-9%. Had my accountant write a business plan, financials last night. PRAYERS that works. that will significantly cut my costs. (will likely take more time though to get a 'final approval' but hoping for preliminary news today with 'contigent on.. blah blah' If we can get approved. I am sure my accountant and I can come up with whatever doc needed. (but I have the past BK and foreclosure. ) we will see

I work 'at work' today and have a 1 on 1 with my boss today.. I work at home 2-3 days a week which has been a LIFESAVER during this process.

Looking forward to getting good news today and making decisions.

NEED the house to appraise out at $470.. will revise my loan with the 6 point, 12 % , 2 year guy to $470 so BPO person has new target to reach.

Thanks for all your support. Today and the BPO or appraisal day are the next big days. HUGE days. After the appraisal is when I will know the actual loan amount.

Hi all,

House update #4.

I am EXHAUSTED and stressed from managing this. and working full time

(k ....no time to be tired at all)

Acceptances
1. 5.5 points, 12% but wants tax returns, proof of income etc. I have (sending this am)
2. 4 points, 12%, wants above info too

(I feel these are not really accepted until they have reviewed my info.. and they want BPOs. brokers price opinions but just pulled new comps.. house may appraise higher than 450)

The below are in the works (these people appear they will be LOWER)

..basically 3 brokers.. 2 of which wnat me to send 6 months bank statements, paystub and personal financial (in the works in this am)

I shoudl hear from these lower rate 3 on FRIDAY (tomorrow)

the above 2 acceptances are being told I need a day or two to think on it (while I still feed them docs)

ok talked to my mentor (relieved and happy look)

He thinks he can help me find the money too .. was impressed with the deal (wowzer).. he can only lend at 12% w 4 points but w him, I would assume no issue with docs (not that I can not prove income just my financials have been complicated) he is ALSo going to talk to some folks who have IRAS/401ks or just $$ and see if they want to lend to me.. 18 months. Hopeful look

My mentor on the 2 flat thinks I should definately short sale it (thanks 'anotherreader') and he wants to handle it (dependent on his review of info I just ssent). If he handles it I get a cut of the profit (few grand) and he can time the short sale as we need too so I can keep collecting rent to help with costs.

NEWS From Mentor today and tomorrow
NEWS from lower rate guys tomorrow

Other (higher rate guys) are held off to tomorrow

I have $30k liquid cash and think I can get $10k more

I do not want to disturb my emergency fund for myself or the '6 homes/3 units'

Onward. It is 10:30 here. hope to have all docs/info sent by noon.

if my mentor says ok to short sale I will call bank and get that started

Update from today

per foreclosure attorney..
1. 'deed in lieu'.may show in credit report but does not show on court case. case is dismissed once deed given back
2. he does not think other side will want to do deed in lieu because of extra attorneys fees.. (I will need to call them)

per real estate attorney
1. I can not buy something from myself and call it a purchase.. he is not very creative but very good

per accountant

1. I can purchase from myself if I use LLC/ownership details

Offers so far

1. 6 points, 12%- 2 years
2. 4 points, 13%-1 year, renewable in 3 month increments

I have asked both to go back and see if they can get better offers

I am still pending on 3 more offers.

Loan amount will be determined based on broker price opinion/like an informal appraisal by a local realtor (so loan amound and $ I have to come up with is fluid until themn.. will not know how much I have to come up with)

On a GOOD NOTE..talked to a broker guy I have been in teh works with and he says he can REFINANCE me out (with ownership in my name) in a year.. I got his terms (640 score, same income etc).. That sounds like an ideal exit strategy (no need to deal with ownership issues!) Loan would be 2 pts higher than normal rates at that time (5-7%) and normal closing costs but actualy that rate is FINE because with the new heightened FHA premiums that is just about the same.

AWESOME NEWS.

I finally reached my real estate mentor.. I talk to him in detail in 45 minutes

Concerned about cash to close.. (and I can not afford 12%w tax, insurance escrow.. another $8-900) this means i have to come up with cash (now) to escrow for taxes/insurance (another $9-10k) so I have that paid

Praying house appraises at $450k or more
65% loan to value of that is $292500

Settlement w bank is $297500

Points worse case 6=18k on $300k loan)
PLUS tax/insurance escrow $10k (this is an escrow for me and held by me)


On another (helps me feel better note)... for those following me.. the last settlement I tried to work out w that FHA niche loan (through a bank) was at $302k, $20k down in fees (does not count towards loan) and 6.75% but w FHA mortgage premium was almost $3200 a month. Even at 12% I am only $700 a month over that and the research this forced me to do may have gotten me an exit strategy (without ownership issues) in a year

I will wait for more info, continue researching and then have my accountant lay it all out (me too) and figure if it is worth it and can I do it

Onward but WISH COSTS and RATES WERE NOT SO HIGH!!!!

update on house situation #2. I have 2 weeks left to get the money

Essentially most everyone has been called (but searching for new lender contacts today). I have 4 people on the 'hook', I WILL hear preliminary news tomorrow on at least 2. I had planned to refinance out in a year (via purchasing it from my LLC) which made the higher rates not so bad. I just found out that I may not be able to. My plan was to take title in my LLC and then buy it from myself in a year (after last foreclosure sale/deed in lieu date.. my 2 flat.. I just withdrew my attorney from that case). There is some concern that is not an arms length transaction. The lender raised that concern and I botched the answer.. possibly losing his confidence. I am unclear if he is going to back out or not. My accountant says there is way around that. I need to get clear on what that is and STOP talking when I do not know the terms.

Today

1. call attorney and FHA underwriter on arms length issue
2. call my foreclosure attorney ( that I just let go )and ask him what other outcomes there are to a foreclosure case outside of deed in lieu and sale
3. call attorney for bank (or rehire above attorney to do so)on 2 flat in foreclosure and offer to give back deed in exchange for some other marked resolution than deed in lieu.. like have htem dismiss the case etc.. This is because the waiting period for foreclosure starts after the deed in lieu or sale date but there is NO WAITING PERIOD if neither of those occurred and the case just faded away.. Maybe if these guys get the house they can just make the case go away

I need to get clear on things and keep pushing

Yesterday was a terrible crying out of control night when I got that arms length transaction news. My deal hinges on getting out of the hard money loan in less than 18 months.

I do not want to pay hard money for 3 years aqnd it does not make sense and no one wants to lend for that long.

If I can not buy it from myself (LLC). I have to wait to refinance. there is THREE year waiting period w FHA to refinance

Onward!

Hi all,

Using this as a diary to laugh or cry at later.

Update on house short settlement (where I live now) trying to buy out existing mortgage at a discount and take ownership of property singally without my ex. Settlement $297,500.. Value $450,000. I can not get a bank loan due to pending foreclosure on a rental and there is a year waiting period from the END of that. I had my attorney withdraw and will no longer fight that.

Made 36 calls (had a friend help) !!! Crazy insane.. talked to several folks.,and have 4 applications in the works and expect news on at least 1 of them today. Waiting on several more calls back too.

Points and rates are likely to be higher than I want. These are true hard money folks. I have one (non hard money guy) but he does not seem as strong .. I will hear from him mid next week. Still hoping for 8% rate and 20k down but folks are wanting 5+ points but can wrap them in the loan .., but not if loan to value goes over 65%

We will see.. news soon..

I want to settle this so I can RELAX and start my financial plan and move on. These last 2 homes represent the last ties to the past 'downfall'

good month w 6 homes and 3 units... low costs.. all rents in and cut insurance (yearly costs) by over $2,000. Will make efforts to raise rents across 3 units this year.

also started 401k this month.. 8% from me.. 3% from work.. (vested from day one) and $125 auto savings into emergency fund..

Making progress just need to settle house.