Chelsea Anderson

Hi Andrea - sorry you're dealing with this. If you want to sell, your sister can buy you out of your half and then both are happy. She can contact a mortgage person if she needs a loan or you two can come up with an agreeable value of the home and come to terms yourselves on how you want to split the equity. If there are other assets, maybe you can walk away with the equal amount to your half of the equity in cash or other asset if she wants to keep the house. Hopefully you can work together to come up with something that works for both of you. good luck!

Hi Jordan - DSCR or a loan would be my choice personally instead of wiping out all your funds completely! Definitely keep your rainy day fund if something were to happen. Here are the big differences between the 2 having bought investment properties both ways... You can buy a property directly in an LLC with a DSCR which just makes accounting and liability a little cleaner. You also don't have to jump through all the financial hoops to prove your income/assets with a DSCR qualification like you would with a standard conforming (conventional) loan. Underwriting can be annoying or tough to check all their boxes if you have multiple mortgages or you own your own business. Rates can be a little different, our DSCR is pretty dang close to market rates from a few weeks ago but check with a lender who can run both scenarios for you. Once you've had the chance to look at both scenarios, you may have a clear winner with that side-by-side comparison.

Hi Nathaniel, This varies by investor. It also depends largely on your goals for the investment. If you have a bunch of cash you are trying to deploy into investments, maybe instead of buying 1 property outright, you split that cash into 3-4 properties that can all build equity, provide tax write-offs and hopefully some cash flow too! Things we ask our first time investors: 1. What is the goal for the investment? Is this something that will feed your retirement? How many years away from today will you need your cash back? 2. Is this something you plan to hold forever or sell after 3-7 years? If you're planning to sell, what will you do with the money? 3. Do you need monthly cash flow or are you investing and banking on the property's value appreciating over time? Depending on the market, some are much stronger rents while not appreciating much and others maybe offer a bit of negative cash flow but have a history of appreciating well above standard inflation rates. Different goals. 4. Are you taking cash out of a performing investment already? What rate are you getting on that money vs. what rate will you pay on the mortgage? If you're averaging over 10% returns with your cash invested, keep as much of that cash invested and finance this purchase. If it's sitting in your backyard, get that money into something to give you a return, anything is better than nothing! 5. Lastly - what's your current financial position? If this is all the cash that you have and would leave you with no reserves, definitely finance. Save your rainy day fund for a rainy day. Hope answering those questions sheds some clarity on which path to choose! Best of luck with your first investment!

Hi Pam - every investor makes their money on how they buy the property meaning the initial deal. The misconception is that investors make the money when they sell but it really comes down to how well did you plan & prep for the project and the current market conditions when making the initial offer. Budget everything in and then dont forget to add a substantial buffer to the budget when running your numbers for unexpected costs that you can't immediately see. If you're planning to flip, this is a market where you should be incredibly conservative when running your numbers. If you're planning to keep it or even move into it, there may be more wiggle room for you to do repairs slowly or band-aid something to limp along for a year or two. Good luck!

Hi Mateo - everything is negotiable. You can sometimes fight your appraised value and get some of that reconsidered by the appraiser if you feel it was way off base. If they do not amend that valuation, you will have to deal directly with the buyer to negotiate that $46,000 difference. The options are either you come all the way down, the buyer comes all the way up or you meet somewhere in the middle. Be mindful of what the contract says in regards to the appraisal contingency as well. Best of luck!