All Encompassing Mortgage and Real Estate Thread

[closetohumping 17470]

2 hours ago, UTPhil2006 said:

Sadly that's more common than not.  I'll have borrowers email me and be like hey can you match xxx% and I'm like theres no way I'm getting beat that bad.. so I'll ask them to send me their quote from their lender and sure enough theres 1-3 points of buy down.  Sure if you want to spend that let me show you how I can now beat him by .25

Dude was relentless.  From Network Capital, which has great reviews online.  Incredibly pushy, he'd come back even after I told him his services were not needed.  Finally blocked him.

 

But it was funny. "hey, we were able to get the rate you wanted."  

 

"were you not gonna mention the 30k?"  "oh well, you can make payments, let me work my magic."

[LCHorn 2631]

13 minutes ago, Wulaw Horn said:

Yessir.  This is exactly right.  After the last housing bubble bust and the great recession we just stopped building homes, and in Texas we keep adding people.  I've messed around talking through this with @Scipio and I think we are short something like 500,000 units in the I35 corridor alone between San Antonio and the Border. I think he thinks I'm crazy and that's too high, but I'm not sure man- that area just has so much growth- would it really surprise anyone if there was demand to put another 1.3 or 1.7 million people in homes along that corridor?

I have no idea- I'm literally guessing like the famous B School or interview question where they ask how many Coca Cola's were sold in NY b/c they want to see your thought process not b/c they care about an actual number.   But yeah, inventory is crazy scarce.  The most expensive cities for home ownership are either limited by geographical factors or zoning/governmental factors or some combination thereof.

I got a little tear reading a progessive article talking about how all cities should be like Houston and ditch zoning to fix the housing affordability crisis. I always love it when I can find common ground to agree with a progressive (this is sincere), it makes me feel good about the idea that there can be people coming at a problem from a different perspective and come to a similar answer.  It's an antidote, for me, from the idea that all politics have to be divisive that we see so much.  But yeah up demand, restrict supply and you squeeze the balloon and it has no choice but to inflate.   

At least in my neck of the woods I don’t think the failure to build is regulatory or political (that city of Austin permit shit isn’t stopping KB homes from building 3k rooftops in Manor), I think it’s mostly labor shortage and Covid based disruption in capital markets (the brakes got put on commercial lending in March 2020 and didn’t get back to normal for probably six months).  
 

And yet that’s really just a side story to the enormous increase in demand.  

[Wulaw Horn 19152]

2 minutes ago, LCHorn said:

At least in my neck of the woods I don’t think the failure to build is regulatory or political (that city of Austin permit shit isn’t stopping KB homes from building 3k rooftops in Manor), I think it’s mostly labor shortage and Covid based disruption in capital markets (the brakes got put on commercial lending in March 2020 and didn’t get back to normal for probably six months).  
 

And yet that’s really just a side story to the enormous increase in demand.  

Oh no doubt.  Regulatory and political hit harder in coastal states that are anti building/sprawl than they do in Texas.  It's not all Covid though- we got behind in home starts during the great recession and haven't really ever kept up since.  Call it 4 parts demand 1 part supply specific to Texas in the last dozen or so years if I had to guess?

Wish I could figure out how to post this chart but basically housing starts were at 2.2 million a year in 2006, during the great recession they dropped to about 500k for 4 years, took all the way until 2019 to bust back above 1.5 million and immediately dropped below 1,000,000 when Covid hit. That's a lot of houses that didn't get built. Those numbers are all nationwide, of course.  

[Neonmoon 38130]

The 2008 crisis and subsequent longer than necessary recession killed the home building market. Population continued to grow but homebuilders weren’t building new homes at the same pace. Everyone is in the finding out phase for that slowdown period 

edit: Wulaw just said it. I’m a moron 

Edited January 20, 2022 by Neonmoon

[gmr548 16615]

The 2008 crisis and subsequent longer than necessary recession killed the home building market. Population continued to grow but homebuilders weren’t building new homes at the same pace. Everyone is in the finding out phase for that slowdown period 
edit: Wulaw just said it. I’m a moron 

Yep. This country had a very slow decade for housing development immediately preceding and then overlapping with the largest generational cohort in the population coming into peak household formation/home buying years. Everything else is fluff.

[UTPhil2006 3812]

This is like a no hitter nobody talk about it, don't even think about it.

[CooterBrown 18028]

5,000 home subdivision going in southeast of ABIA. I guess we will see how bad people want to own a home in Austin if they’re willing to live out in BFE with airplane noise and Del Valle schools.

[UTPhil2006 3812]

5 hours ago, UTPhil2006 said:

This is like a no hitter nobody talk about it, don't even think about it.

Nice .085 basis point drop today.  Needed that.  

[Neonmoon 38130]

The next jobs report comes out Feb 4. We will see what that does 

[jimmyjazz 46130]

2 hours ago, CooterBrown said:

5,000 home subdivision going in southeast of ABIA. I guess we will see how bad people want to own a home in Austin if they’re willing to live out in BFE with airplane noise and Del Valle schools.

Just after grad school I rented a house at 51st and Eilers.  That was when Mueller Airport was in full swing, just across I-35.  We typically got serenaded by commercial jets around 7 AM every day, but every once in awhile, usually on a mega-hungover Saturday morning, a squad of F4 Phantoms would blast out -- I think from Bergstrom -- and about knock our shitty rental house down.

You get used to it all.

[USCATX 1078]

17 hours ago, CooterBrown said:

5,000 home subdivision going in southeast of ABIA. I guess we will see how bad people want to own a home in Austin if they’re willing to live out in BFE with airplane noise and Del Valle schools.

That subdivision (Sunchase) has been in development for ages.  This is just a sale and re-brand to get it moving at the pace of the current market. 

[Armybrat 40910]

23 hours ago, jimmyjazz said:

Just after grad school I rented a house at 51st and Eilers.  That was when Mueller Airport was in full swing, just across I-35.  We typically got serenaded by commercial jets around 7 AM every day, but every once in awhile, usually on a mega-hungover Saturday morning, a squad of F4 Phantoms would blast out -- I think from Bergstrom -- and about knock our shitty rental house down.

You get used to it all.

Yeah, we lived in a 4plex  on Manor Circle in the summer of 1969. Got used to the noise after a couple of weeks, and that was before the hush kit technology was developed for the big jets.

[Armybrat 40910]

What a time to house hunt - my son is trying to help my granddaughter find a decent 1 bedroom condo with a little outdoor space (she has a dog) for under $300k somewhere within the city limits. Her job is on Riverside Drive between Congress & I-35. 
They almost had one up in north Austin off West anderson lane, but a cash buyer got it instead.

 

[UTPhil2006 3812]

16 hours ago, Armybrat said:

What a time to house hunt - my son is trying to help my granddaughter find a decent 1 bedroom condo with a little outdoor space (she has a dog) for under $300k somewhere within the city limits. Her job is on Riverside Drive between Congress & I-35. 
They almost had one up in north Austin off West anderson lane, but a cash buyer got it instead.

 

She wanna live next to our old DC? I may have a spot 

[Armybrat 40910]

47 minutes ago, UTPhil2006 said:

She wanna live next to our old DC? I may have a spot 

If you would, please PM me.

This is the place they just missed on. They actually outbid the cash buyer by about $15k, but the seller wanted a quicker closing:

https://www.abor.com/listing/2500-steck-ave-33-austin-tx/4241647/99b55df3-2989-4a22-ac64-61efe260b740

[Wulaw Horn 19152]

56 minutes ago, Armybrat said:

If you would, please PM me.

This is the place they just missed on. They actually outbid the cash buyer by about $15k, but the seller wanted a quicker closing:

https://www.abor.com/listing/2500-steck-ave-33-austin-tx/4241647/99b55df3-2989-4a22-ac64-61efe260b740

Tell her to get fully underwritten and approved if she can. If she gets completely through underwriting then she should be able to do a 15 or 20 day close (literally just need appraisal) and maybe better compete with a cash offer. 

[Armybrat 40910]

She already has the loan approval.

My son will co-sign if necessary.p, or he already has.... I dunno.

Edited January 23, 2022 by Armybrat

[Wulaw Horn 19152]

8 minutes ago, Armybrat said:

She already has the loan approval.

My son will co-sign if necessary.p, or he already has.... I dunno.

So if she has an approval that means already underwritten. Which if that’s spelled out specifically could help- especially if it’s conveyed to Listing agent. You won’t beat a cash offer all things equal but you might win if you are 15 k over (and waive right to renegotiate over appraisal). 

[UTPhil2006 3812]

31 minutes ago, Wulaw Horn said:

Tell her to get fully underwritten and approved if she can. If she gets completely through underwriting then she should be able to do a 15 or 20 day close (literally just need appraisal) and maybe better compete with a cash offer. 

Not in todays appraisal climate. It’s a mess 

[Wulaw Horn 19152]

1 hour ago, UTPhil2006 said:

Not in todays appraisal climate. It’s a mess 

I had one go in 13 or 14 days a couple months ago but sure- point taken on mess that is appraisal. 
have you found UWM direct appraisal to be better?  I feel like it’s better (a little bit anyway) Like D- to C maybe? 

[Gil Bang 26019]

2 hours ago, Wulaw Horn said:

Tell her to get fully underwritten and approved if she can. If she gets completely through underwriting then she should be able to do a 15 or 20 day close (literally just need appraisal) and maybe better compete with a cash offer. 

 

2 hours ago, Armybrat said:

She already has the loan approval.

My son will co-sign if necessary.p, or he already has.... I dunno.

 

2 hours ago, Wulaw Horn said:

So if she has an approval that means already underwritten. Which if that’s spelled out specifically could help- especially if it’s conveyed to Listing agent. You won’t beat a cash offer all things equal but you might win if you are 15 k over (and waive right to renegotiate over appraisal). 

Brat, I suggest that she have her lender call the listing agent everytime she submits an offer.    When somebody calls me and tells me that a buyer has been fully-underwritten, and promises me a smooth, timely transaction, well, it goes a long way.  

I ask my lender to do it on all of my deals.  

[Wulaw Horn 19152]

49 minutes ago, Gil Bang said:

 

 

Brat, I suggest that she have her lender call the listing agent everytime she submits an offer.    When somebody calls me and tells me that a buyer has been fully-underwritten, and promises me a smooth, timely transaction, well, it goes a long way.  

I ask my lender to do it on all of my deals.  

Absolutely this. And if it’s already underwritten and all they need is an appraisal, and they waive renegotiating over appraisal even better. Then, the only question becomes timing. Make sure the lender can convey that. 

[Gil Bang 26019]

Yeah, already underwritten is the key. 

A lot of listing agents out here ask for DU approval, not just a letter.  

[Wulaw Horn 19152]

Just now, Gil Bang said:

Yeah, already underwritten is the key. 

A lot of listing agents out here ask for DU approval, not just a letter.  

And underwritten would be even better than a DU approval. If you don’t have a DU approval at the time of prequal that’s basically malpractice. It only takes another 30 minutes or so to get the DU and that should be bare minimum. 

[Armybrat 40910]

1 hour ago, Gil Bang said:

 

 

Brat, I suggest that she have her lender call the listing agent everytime she submits an offer.    When somebody calls me and tells me that a buyer has been fully-underwritten, and promises me a smooth, timely transaction, well, it goes a long way.  

I ask my lender to do it on all of my deals.  

Son’s longtime friend is a realtor who has been assisting them in their search. I’ll pass that suggestion along just in case they haven’t done it.

 

Thanks all.

[Gil Bang 26019]

it's really hard right now, especially at the entry-level price point. 

[DFWTexEx 278]

when you say "warranties", is that lawyerspeak, or do you mean the actual home warranty?

The builder provides three tiers of warranties:  1 year "bumper to bumper", fixtures, materials, etc. except for wear and tear type stuff; 2 years for systems (HVAC, plumbing, electrical; 10 years for major structural stuff (foundation, beams, load bearing walls, roof framing, etc.).  Not sure if these are standard or if there red flags / details I should look for. There don't seem to be any service level standards for repairs, which bothers me.

The biggest thing you should be worried about is the solvency of the HOA.  Are the HOA fees too high?  High enough?  The last thing you want is to be hit with a special assessment down the road because the HOA doesn't have enough cash reserves for a needed project.

Yes.  There is some concern here.  There are not a lot complicated common area things.  It's basically a pool, landscaping, gates and the interior driveways.  These should all be pretty new so I can't see major expenses to repair or replace these things in the near future.

Can you live within the ordinary rules of most HOA's that don't have an overzealous board member? 

I am not too worried about HOA enforcement issues. I know what I am getting into and expect enforcement of the standards.  Having lived in a historic district, I am ok with rules about what I can do to the exterior of my house.   I am more worried about understanding how the finances of the HOA work so that there are no surprises later. Are the reserves right.
One thing not mentioned yet, is how I deal with neighbors with whom I share a building.  The HOA does not have responsibility for the buildings.  My unit will be in a bank of 4 all owned in fee simple.   If repairs have to be made to the roof, the common walls, etc., who manages this and how do you share costs?  What if one neighbor doesn't want to participate?  I need to look into the HOA declarations and see how we can force them.

So, I am pretty close to making an offer. I have been handed the TREC forms for a new home with construction. As a lawyer who works on commercial transactions, I want to redline the shit out of it since it really is entirely Seller friendly. But I have been told by multiple people that this builder doesn’t really make changes to its form. I can only address my specific issues. In talking to people who have bought there, they seem content with the quality of the build. So I do just swallow these terms and go or is there any particular red flag that I should review and possibly push back on?


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[Dutchrudder 11151]

On 1/20/2022 at 3:31 PM, Wulaw Horn said:

Oh no doubt.  Regulatory and political hit harder in coastal states that are anti building/sprawl than they do in Texas.  It's not all Covid though- we got behind in home starts during the great recession and haven't really ever kept up since.  Call it 4 parts demand 1 part supply specific to Texas in the last dozen or so years if I had to guess?

Wish I could figure out how to post this chart but basically housing starts were at 2.2 million a year in 2006, during the great recession they dropped to about 500k for 4 years, took all the way until 2019 to bust back above 1.5 million and immediately dropped below 1,000,000 when Covid hit. That's a lot of houses that didn't get built. Those numbers are all nationwide, of course.  

This one?

https://ipropertymanagement.com/research/housing-starts

[Wulaw Horn 19152]

7 hours ago, Dutchrudder said:

This one?

https://ipropertymanagement.com/research/housing-starts

Not exactly but that one might be better. 
Thanks

 

 

[UTPhil2006 3812]

Solid beginning to the week down .03 so far

[Wulaw Horn 19152]

We are about 1/10th of a percent worse than what I posted Tuesday morning- even with 3 positive days in a row and an up trend this morning.  The reason?  We lost 67 basis points in the mortgage backed market on Tuesday, and we finished up something like 11, 14 and 12 basis points to end out the week.  Happy to be up after constantly being down?  Sure.  But not enough to wipe out the awful day on Tuesday.  And that's about how it's been going lately as rates trend worse and worse.  Big day worse, big day worse, little bit better, little bit better, big day worse.  Add it all up and it's been sort of a bleak year so far.  This, while locally there is seemingly no end to people in bidding wars, not enough houses on market and prices continue to rise.  My joke whenever someone asks me when to buy a house I say the best day to buy a house is yesterday and the next best day is today. This market is really making that statement true, over and over. 

Your Monday chart:

30-YR. CONFORMING

3.744% -0.004

30-YR. JUMBO

3.437% -0.046

30-YR. FHA

3.840% -0.001

30-YR. VA

3.534% -0.027

30-YR. USDA

3.800% +0.056

15-YR. CONFORMING

2.919% -0.047

 

[Wulaw Horn 19152]

One piece of good news- that might fit a bunch of people here with big time equity in their property and 7 figure values on said property...

Just hooked up with a lender that is doing 10 year arms in the mid 2's on cash out's up to 1.5 million.  So, I just had a guy I locked no points at on this program doing a 10/1 arm (fixed for 10 years and then adjusts every year thereafter) for 1.2 million.  He thought he was going to pay through the nose to move off of his 15 year into something with a longer amortization schedule and with rates going up.  Nope, we got you.  Here's another $500k in cash and lower your payment a bunch without having to give much of anything up in rate (in his case it was 1/8th of a point- basically nothing)

It's an arm, yeah, but 10 years is a lifetime for most homeowners.  I think the average American is in their home for right at 7 years and in their mortgage for 4.5 years, so... Was pretty happy to bump into those guys and stay down in the 2's on that deal and another jumbo purchase we are working on now.  

[hornian 5223]

36 minutes ago, Wulaw Horn said:

One piece of good news- that might fit a bunch of people here with big time equity in their property and 7 figure values on said property...

Just hooked up with a lender that is doing 10 year arms in the mid 2's on cash out's up to 1.5 million.  So, I just had a guy I locked no points at on this program doing a 10/1 arm (fixed for 10 years and then adjusts every year thereafter) for 1.2 million.  He thought he was going to pay through the nose to move off of his 15 year into something with a longer amortization schedule and with rates going up.  Nope, we got you.  Here's another $500k in cash and lower your payment a bunch without having to give much of anything up in rate (in his case it was 1/8th of a point- basically nothing)

It's an arm, yeah, but 10 years is a lifetime for most homeowners.  I think the average American is in their home for right at 7 years and in their mortgage for 4.5 years, so... Was pretty happy to bump into those guys and stay down in the 2's on that deal and another jumbo purchase we are working on now.  

 

I would like to know more. 

[Neonmoon 38130]

Fannie predicts a Purchase year 

[UTPhil2006 3812]

With where rates are/headed that definitely makes sense.  Most people who could refinance already have and have their mortgages in the 2's

[Wulaw Horn 19152]

I’m quite frankly shocked at how many refinances I’m still doing and then I saw it’s still something like 60/40 refinance as of the 2nd week of January (units not amounts). There are more people out there that didn’t already move than I would have thought, plus appreciation going up. 
my coach always says 70/30 purchase to refinance should be the goal. If those projections hit that would put the market pretty close to that number overall. 
3.3 trillion seems like a pretty big number to me in overall market. 

[T’Boo Ted Marshall 2740]

I'm a recovering slumlord and considering getting back in the game with our current primary.  I was thinking that if I go that route I really need multiple rentals, not just one.  I'm curious to see those out there with multiple properties as opposed to one.  I've heard various CPA's say that one rental won't get you the ROI you desire.  

[UT_OB1 2224]

23 minutes ago, T’Boo Ted Marshall said:

I'm a recovering slumlord and considering getting back in the game with our current primary.  I was thinking that if I go that route I really need multiple rentals, not just one.  I'm curious to see those out there with multiple properties as opposed to one.  I've heard various CPA's say that one rental won't get you the ROI you desire.  

What are you curious to hear?

It’s my side hobby/long term retirement, but my experience so far is 1) if you want cash flow look at 2-4plex 2) if you want (hope for) long term appreciation look at single family and 3) if you aren’t buying a property that you are planning on doing work to to increase the value, all you’re doing is investing, and it would probably be easier to buy reis 

[Gil Bang 26019]

1 hour ago, T’Boo Ted Marshall said:

I'm a recovering slumlord and considering getting back in the game with our current primary.  I was thinking that if I go that route I really need multiple rentals, not just one.  I'm curious to see those out there with multiple properties as opposed to one.  I've heard various CPA's say that one rental won't get you the ROI you desire.  

that all depends on the ROI you desire. 

Meanwhile, the rent is too damn high, and it's only getting higher.  It's likely that your return will be better down the road than it is in year 1.   And these days, most places are making it easier than ever to add a ADU.  If you can add one, your income return can go from "OK" to "really good". 

Out here, we have a zillion new laws that essentially make it easy to add a unit to any property.  You can even do garage conversions.  

[T’Boo Ted Marshall 2740]

2 hours ago, UT_OB1 said:

What are you curious to hear?

 

Just curious to see if those on here have multiple rental properties or just 1-2.  

[Gil Bang 26019]

I'd like to have more, but I'd have to work harder than I desire to make that happen. 

[CooterBrown 18028]

that all depends on the ROI you desire. 
Meanwhile, the rent is too damn high, and it's only getting higher.  It's likely that your return will be better down the road than it is in year 1.   And these days, most places are making it easier than ever to add a ADU.  If you can add one, your income return can go from "OK" to "really good". 
Out here, we have a zillion new laws that essentially make it easy to add a unit to any property.  You can even do garage conversions.  

You have to decide if that income is worth dumb ass drunks coming and going to your ADU at 3AM.

[UT_OB1 2224]

1 hour ago, T’Boo Ted Marshall said:

Just curious to see if those on here have multiple rental properties or just 1-2.  

In order of purchase starting 2018:

1 duplex that cash flows well, 1 2 bdrm that I Airbnb Str but am moving toward nurse finder medium term for non summer, a 4 bdrm Airbnb, and a…um…property that is a “handyman special” that has a triplex, 1-1, and 3-1 on it. Only the 3-1 is currently livable, and in addition to fixing up the other 2 buildings were going to add 6-10 rv spots. We also have an empty lot on Bolivar fairly close to the beach we bought just before the compound that we’re going to toss and rv pad on to rent. 
 

edit to add - the 2 bdrm didn’t cash flow well until this year when we got a nurse in there for about 5 months at a higher rate than we could long term it for. So between that and the summer months it has been a good 12 months. The appreciation has been great though - bought it for 85, put in about 20, appraised last month for 240. The 4 bdrm only breaks even, but a similar story on the appreciation. 

Edited January 26, 2022 by UT_OB1

[Gil Bang 26019]

How do you handle sewage for the RV pads?

1 hour ago, UT_OB1 said:

In order of purchase starting 2018:

1 duplex that cash flows well, 1 2 bdrm that I Airbnb Str but am moving toward nurse finder medium term for non summer, a 4 bdrm Airbnb, and a…um…property that is a “handyman special” that has a triplex, 1-1, and 3-1 on it. Only the 3-1 is currently livable, and in addition to fixing up the other 2 buildings were going to add 6-10 rv spots. We also have an empty lot on Bolivar fairly close to the beach we bought just before the compound that we’re going to toss and rv pad on to rent. 
 

edit to add - the 2 bdrm didn’t cash flow well until this year when we got a nurse in there for about 5 months at a higher rate than we could long term it for. So between that and the summer months it has been a good 12 months. The appreciation has been great though - bought it for 85, put in about 20, appraised last month for 240. The 4 bdrm only breaks even, but a similar story on the appreciation. 

 

[UT_OB1 2224]

30 minutes ago, Gil Bang said:

How do you handle sewage for the RV pads?

 

On Bolivar - either septic or tie in to the sewer line run by some company. It’s a small lot, and that close to beach requires aerobic system, so we’re going to tie in to sewer line. Being so flat, requires a grinder pump. 
 

The compound has a sewer line running down the middle (rectangle shape, road down the middle long way).  There were actually 3 RVs at one point with at least 2 sewer tie ins. I’m hoping I can reuse at least those 2. Since RVs use so much less water, I’m hoping they’ll let me put 2-3 rvs per sewer tie in. 

[UTPhil2006 3812]

No surprise at all, but Fed just announced they are set to raise rates possibly starting in March (they weren't steadfast with that exact date).  This has mostly been baked in already

[Wulaw Horn 19152]

9 minutes ago, UTPhil2006 said:

No surprise at all, but Fed just announced they are set to raise rates possibly starting in March (they weren't steadfast with that exact date).  This has mostly been baked in already

I was like- what the hell- we were up 8 points in the Mortgage Backed market and now I have an alert to lock and we are down 28 basis points in like 15 minutes.  What had happened?  Then I realized Powell started speaking.  Awesome.  We doing this again?

[LCHorn 2631]

Now down 36, thanks Obama!

[Wulaw Horn 19152]

10 minutes ago, LCHorn said:

Now down 36, thanks Obama!

Ha, now 57 basis points on the day, 21 more since you posted 10 minutes ago.  Fun fun fun.  We had what 5 positive days in a row where we got a total of 50 or so bips back.  Bookended by losing 67 the day before the streak and now down 60 on the back end of the streak.  Yeah- 5 wins and 2 losses and a run differential of -67.  Good times!

[UTPhil2006 3812]

22 minutes ago, Wulaw Horn said:

I was like- what the hell- we were up 8 points in the Mortgage Backed market and now I have an alert to lock and we are down 28 basis points in like 15 minutes.  What had happened?  Then I realized Powell started speaking.  Awesome.  We doing this again?

Yep he started talking at about 1:30 and by about 1:35 I locked 3 loans.