78

We can't know. The question you need to ask yourself is: "Is this app going to make me more than $40,000?". This is unfortunately a question which is impossible for us to answer. You say the app makes you $650 a month. If it would keep doing that, it would have reached that goal in 5 years. But will it? You said it's growing, but will it keep growing? We ...


42

The seller could be liable, if they knew about the issue and didn't disclose it, but it can be hard to prove they knew. The inspector could be liable, but many inspection agreements are limited to what's visible, and include language that attempts to limit liability to the cost of the inspection. So, if prior occupants possessions were concealing the damage ...


40

When reading the responses, it seems like everyone is reactionary but there are some good points made. I will say that I am answering this question as a home inspector and previous to that worked in the insurance industry as a Loss Control consultant. Also I am in California but inspections and insurance carriers are similar. First the major damage referred ...


40

In addition to Alex B's excellent overview, I'd like to add a few more bits of advice. First of all, one term you should know is "commercial real estate" - which is precisely what this is. There is a business element, but it is strictly (and almost entirely) intertwined to the underlying real estate, which makes this a special category of business which is ...


37

It is a decent offer. When one evaluates a business proposal the typical discount rate is 20%. That is a business is only worth investing in if it returns 20% on the initial investment. So the math is this, 650*12=7800 yearly income. Divide that by .2, comes to 39K, basically spot on with the offer. So you are left with the age old decision of which ...


29

There are many ways to value a business. Here is a simple method to get a ball park number on most businesses. This business is made of two parts. The significant real estate assets The cabin rental business. For the real estate: What would it cost to buy a similar property without a rental business What could you sell the property for if the rental ...


19

I would talk to a local attorney and see what your options are. Inspectors are human and can have differing opinions on severity, but it may also be something that the first inspector missed. Not all areas allow you to sue an inspector, but if it's something that you (or your attorney) can argue should have been caught you might have some recourse against ...


10

No your assumption is incorrect. Its kind of like a "whichever is lower" kind of answer. A lender will loan 80% on the appraised value or sales price whichever is lower. Although in most cases they match up as the same number but if they don't they will take the lower number and loan on that. However, if the appraisal was 5k lower I would go back and ...


9

A look at the utility bills should give you an idea of the actual number of tenants. Some places- like I once read of Carmel, California- may require you prove you have enough water to support more rental cabins. You may find the nearby community is anti-growth. If a profitable expansion were possible, I'm wondering why the current owner didn't do it. ...


9

Your best bet is just to start having this discussion with a few lenders, to see what your options are and what rates you could get. Scrape & rebuild isn't as common as the typical home purchase, but it's common enough that lenders are ready for it. Two main options are currently popular. One is an FHA 203(k) loan, the amount they'll lend is based on ...


9

If the goal is simply to allow you to eliminate mortgage insurance, you're almost certainly better off using whatever budget you have to pay down the debt than to try to improve the appraised price of the house. It is rare for any home improvement project to increase the appraised price of the home more than the cost of the project itself. There are sites ...


8

To take a different tack on the subject I would think about what else the potential buyer does in the app space. The buyer wants to pay you $40k for it which means they believe it to be worth more than $40k. Unless you have a very specific reason not to, you should assume they have more information than you. This means that someone who has more ...


6

You said the tax assessor gave you an appraised value, but I think you mean assessed value. This article YOUR HOME; Market vs. Appraisal: What's the Real Value? explains the differences pretty well.


6

Usually, if you want to remove PMI prior to the regularly scheduled fall-off, you will need to pay for a new appraisal. The reasons for this are: (This point is strictly conjecture:) From the bank's point of view, requiring this extra hoop to jump through means less people will do it and/or wait longer before they do, leading to slightly higher profit for ...


5

What exactly is an appraisal and how does it factor into a purchase price? I mean, if a house appraises for $300K and that is the true market value of a house, why would a logical person pay more? Does an appraisal exclude certain factors like curb appeal or market demand? The basic answer to this is that real estate appraisal is not an exact science. In ...


4

Definitely don't borrow from your 401K. If you quit or get laid off, you have to repay the whole amount back immediately, plus you are borrowing from your opportunity cost. The stock market should be good at least through the end of this year. As one of the commentators already stated, have you calculated your net savings by reducing the interest rate? ...


4

I had the same thing happen to my house. I bought it in 2011 for 137,000, which was the same as the FHA appraised value (because FHA won't guarantee a loan for more than their appraiser thinks its worth). January of last year, I get the letter from the tax office and see that my house has been assessed at only 122,000. I was shocked too, until I read a ...


4

You can't shop around for the appraisal, but you do have a right to know what the appraisal costs before you go into the loan (before you take any step which would cost you money). That will be listed on your "Good Faith Estimate" (GFE) that you will receive prior to anything being done. The amount actually charged by the appraisal company may not vary ...


4

The Homeowners Protection Act of 1998 lays out the minimum standards for mortgages in relation to PMI cancellation. There are two ways it can be cancelled: automatic, and borrower-requested. Automatic is when it reaches 78% of the original value of the property - at that point, the bank must cancel PMI, regardless of the current value or any other ...


3

I'm not sure about your first two options. But given your situation, a variant of option three seems possible. Buy in cash. Do the repairs. Have that bank give you a loan. That way you don't have to throw away your appraisal, although it's possible that you'll need to get some kind of addendum related to the repairs. You also don't have your ...


3

You should read the provisions in your offer and any counteroffer that was signed before paying the earnest money, but generally if the appraisal comes in low, the price has to be adjusted. If you can't get a mortgage (because the appraisal is too low) the next guy usually can't either. Unfortunately without more information (the documents that were signed ...


3

It depends upon the skill of the negotiator. In my own case, of such a thing, I received (([fair market price]-[mortgage]) * (.92)) / 2. The .92 represented what was left over of a 6% real estate commision plus 2% closing costs. It was fair enough and the other lawyer was a very good negotiator. To answer your question in a general manner, you typically ...


3

The new payment on $172,500 3.5% 15yr would be $1233/mo compared to $1614/mo now (26 bi-weekly payments, but 12 months.) Assuming the difference is nearly all interest, the savings is closer to $285/mo than 381. Note, actual savings are different, the actual savings is based on the difference in interest over the year. Since the term will be changing, I'm ...


3

In the United States you are given a federally required form that estimates the closing costs. You receive this estimate when you applied for the mortgage. Some of those estimates are perfect, some are not. Some of those estimates are off because they depend on the day of the month you settle. At the time of the starting of the application process the ...


3

In regards to the legal recourse, no there is none. Also, despite your frustrations with Citi, it may not be their fault. Mortgage companies are now forced to select appraisers (essentially at random) through 3rd party Appraisal Resource Companies (ARCs). This randomization mandate from the government was issued in order to combat fraud, but it is really ...


3

I'll assume that the app does not grow significantly in revenue. Then one important thing to consider, economy wise, is this: If you keep the app and it generates the 40k in 4 years - assuming slight growth, which is optimistic - it will be 40k earned while you still maintained it. That work is not free and you ought tu subtract it from the sum earned ...


2

If the sale is at arms length, then no gift tax is due because that would be the fair market value (FMV). If however the friend can sell it for more, but chooses to give you a discount - he might be liable for gift tax. Also, if the sale is at loss (and it sounds like it is from what you describe), the seller might not be allowed to deduct the losses to ...


2

There are three main ways of appraising a property.: Comparable sales. - Great for non-investment homes. Not so good for properties that don't sell very often - like church buildings. Income value - how much rental income can be generated by the property, and what is that stream of money worth. Cost to rebuild - There are two key parts to the cost to ...


2

Regarding the tax appraisal, the question is what value did/will the town put on the other houses? Was your mothers property always higher/lower than the other similar properties? Sometimes a home buyer values the property differently than the town does. In many places there is almost zero relationship between the assessed value and the market value. For ...


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