All Forum Posts by: Aaron Ram

@Raymond B.

Great way to make sure this gets done! Will probably add that into a lease when I have a family living in a SF investment of mine down the line.

At the moment, I rent to students and you probably can guess they will neglect to take care of the exterior maintenance. It gives me an edge over other landlords and the parents have a comfort level knowing the landlord is doing his part. The rental income is great, so I don't mind the additional expense.

Thanks!

Aaron

@Jared Foster Increasing the return on investment is not going to translate to investors coming to the table. Repeating basically what @Steve L. mentioned, without a track record of success usually someone is not going to give you their hard (or easy) earned money. Even if you were somehow able to convince investors to come onboard...would you be comfortable handling their money without much experience in this arena? If things don't work out and there are losses...they will be looking at the one who brought them the deal.

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Down-scaling those plans may be a good idea. I am sure you will accomplish everything you set out to do.

Best of luck!!!

If anyone is wondering...I rounded the numbers for: taxes, sqft etc. Would be easy to find if I included the exact numbers.

Will be doing a before and after blog all the way up to finding tenants to rent the property...Hopefully this would be helpful to some.

@Isaac Dixson Depends on your situation but I bought my first SF investment before owning a primary residence. The Multifamily idea is a good route. You can even buy a 2 family and rent out both units, this makes sense if you are making more per unit than what your current monthly rent is. Try not to complicate things...do the numbers and if it looks good then go for it!

@Ariam K. Congrats on the four unit investment using the FHA loan. Question: How were you able to transfer the property to an LLC after you closed? As I understand the only way would be to refinance and then transfer it to an LLC or pay off the lien?

An idea:

Instead of eating the penalty.... Why don't you explain to them your dilemma and ask them if they can find a tenant to replace you. Or better yet just say you would like to leave for personal reasons without an explanation. If it is a desirable complex, they may find a replacement easily and allow you to leave with no penalty. If they aren't losing any money then maybe they will be more sympathetic to your situation. They get a new full year lease and you get to move out with your full security.

I've done it for clients on many occasions.

Again, I do not know your market or how desirable those apartments are so this might be more difficult where you are or it might not....

It is usually only used for your primary residence.

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Exceptions according to the handbook:

Size: A growing family is one acceptable reason to obtain a second FHA loan. If the homeowner's family grows so much that his current home becomes too small, the homeowner may be allowed to buy a new home backed by the FHA and keep the first home as a rental property. The homeowner must be able to prove to the FHA that the family size has increased and the current home is no longer adequate.

Relocation: Another exception to the single FHA mortgage rule comes into play if the homeowner moves to a new area not within commuting distance of the current home. The person can buy an FHA-insured home in the new location and keep her existing home as an investment property. And the homeowner can relocate for reasons other than in an employer-forced move, according to the FHA handbook.

Co-Borrower: You also can remain a co-borrower on an FHA loan and obtain another FHA mortgage. The FHA recognizes two types of co-borrowers. One is someone who divorces and remains a co-borrower despite moving out of the home. The co-borrower may be able to obtain an FHA mortgage for a new residence. The other type of co-borrower is someone who assisted a family member to get an FHA-insured mortgage. The first FHA loan is on the primary home of the family member and the person who helped may get a second FHA mortgage for her own residence.

Other considerations: The FHA puts several restrictions on obtaining a second FHA mortgage. For the borrower who wants to use the option to upgrade to a larger home, the first home must have a loan-to-value of 75 percent or less. The borrower will need to obtain an appraisal and pay the mortgage down to meet the 75 percent limit if the loan to value is higher. To qualify for the second FHA loan, the borrower may have to have a signed rental agreement on the first home and show cash reserves to pay the payment for 6 to 12 months on the first mortgage if he loses the renter.

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Hope this helps!

Yep, the bedrooms are small but fine for this niche rental market. House is in fairly good shape and well maintained by previous owner. Roof is only 3 years old. Gas Boiler replacement and the cosmetic stuff mentioned in prev. post are all I know of so far. Hopefully no major surprises.

I remember posting my first deal on here about three years ago. Now on to the second one and looking to see how I did.

First deal recap: https://www.biggerpockets.com/forums/12/topics/72051-my-first-deallet-me-know-your-thoughts

I was a bit overexcited purchasing that first investment as you can see with my wording and overall knowledge. Thankfully It worked out great and things are pretty stable there. Same tenants are well into their second year and no real horror stories to report. I used the funds accumulated over the past two years with first investment to put down the 25% on this one.

2nd Investment #s:

Description: 5BR 2BA Cape w/ 1650sqft, Full Unfi. Basement, .25 acre, oncul-de-sac, off-St parking for 3-4 cars, no garage

Purchase Price: $148,500.00 w/ 25% down

30 year Mortgage: $111,375.00 at 4.875%

Taxes: $5,400.00

Insurance: $800.00

Repairs: New Appliances, Paint, Refinish Hardwood Floors, Update bathroom toilets/vanities, Replace Gas Boil. Misc. repairs.$15-20k (Gas boiler is working but replacing because it is very old and peace of mind)

Projected rental income: $2,800-3,000

Landlord additional costs: Landscaping and Snow removal.

Tenants responsible for all other utilities.

Thank you for your feedback! This forum has been very motivating and helpful these past few years!

I have a policy under my name for an investment property I bought.

The property is being transfered to a LLC. Once this is done, can I also trasnfer the policy to be under the LLC.

Thanks.

I would like to keep it as a cash flow investment for the time being. I have no plans of selling it in the near future. I'd like to do 1 more this year and maybe 2 more next year.

Beats keeping my money in the bank.....

Another option:

I've been told the university nearby has made an offer to buy out this street (12 homes) before but the town stepped in and stopped the deal from taking place. The school may need to expand in the near future and if an offer is made...then who knows. It would have to be pretty substantial though.