All Forum Posts by: Adam Gollatz

Need or Should? To verify true needs, consult with your lender and the condo association rules and regs.

I would say dont bother asking if you need to and just purchase it. It should be very cheap and you would factor it into the rent. If its making or breaking your rental numbers, its probably not a good investment to begin with. Without seeing the actual policy, the condo policy most likely only covers the structure and the common elements. Your policy would cover everything inside the walls; appliances, cabinets, flooring, etc, not to mention provide some sort of liability protection. You could require renters insurance which would give the tenant liability protection from most things they would try to go after you for. As for flood insurance, this should be in the condo insurance policy which you would pay for indirectly through the condo dues. If you are on the 2nd floor and depending on what the flood map says, I might opt out of this.

Easiest answer is start talking with lenders to see, there are so many options out there for loan products and without getting into all of your financial and personal details, its hard to say how easy it will be. My guess is since you are hear asking, you know it wont be easy, but thats not to say its impossible. 

Make sure you keep cash reserves. Equity is nice but you cant (easily) pay your mortgage with equity. Its all about striking a balance between equity and reserves that is the key to success.

BRRRR is a great strategy, but it requires lots of cash, either yours or someone else's, to start. My recommendation is if you are struggling with obtaining conventional mortgages, don't try to BRRRR, since the exit strategy is getting a mortgage from a bank. Id recommend flips before BRRRR if financing is your trouble.

Easy, take the emotion out of it. Serve them a notice that the rent is going up on such and such a date and what the new rent will be or they can vacate, just do it in accordance with the local rules/their existing lease agreement at a minimum. You can put a note in there that they can call you with any questions. If they call, dont be heartless, just explain that its a business decision and you would hate to lose them as tenants, but you cant afford to not raise the rent. Assuming you are just keeping the pace with fair market rent and you arent gouging them.

I just re-read the post and somehow completely missed what you were trying to do. Whats wrong with the previous lease that you need them to sign a new one? Also, why are you bothering with all of this if the tenant is behind on the rent? A new piece of paper isnt going to fix that.

Since you have a lease through June and its a single family home, chances are it wouldnt sell for what you want, so cross that off. 

Look into the cost and terms of getting a HELOC. You should be able to get approved for up to 80% LTV on a rental at a lower interest rate than the 22% on your credit cards and you get to keep your original loan at your original rate, so the cashflow doesnt change. then its just shifting debt. keep the 0% for as long as you can, pay off the 22%, then shift the 0% to the heloc just before the promotional period runs out.

I always recommend #1. Buying multifamily you live in is great way to start out. My advice is go bigger (4 units, vs 2). You'll learn the property, landlording, repairs, etc which will save you extra money. Not to mention you'll be the best tenant that you ever had. Just make sure you calculate that you pair fair market rent or less. Never more.

Find a local REI group to get in touch with investors. If its truly a deal, it will sell itself.

If you are new to landlording, which it sounds like you are, I would consult a local landlord-tenant or lawyer specializing in evictions. The first step in eviction is usually serving some sort of notice to pay or vacate, giving them something like 5 days to pay or leave the premise. How come you want the tenant gone? Is it just that they havent paid rent? How late are they?

Do you trust your inspector and how attached are you to that 600 dollars the appraisal would cost? Id personally take it as a learning experience and move on. To prove or disprove this, estimate the work that would need to be done to get it to the 300k level of the rest of the homes in the neighborhood. How close is it to 300k-262k? If its close, why not just start off buying the 300k home? The VA loan is going to limit your options for forced appreciation, thats just something you are going to have to deal with. Keep looking and live and die by the numbers, just adjust your expectation to lower cashflow since you are buying turnkey at FMV with no money down. If the outlook is as good as you say, rents should trend up and you should be able to turn that low cash flow into a real winner.

You can pay it off and reuse it as many times as you want.