All Forum Posts by: Adrienne Green

Hello! Great job house hacking with your current home. I'll send you a message about expanding your real estate investment.

That's an awful situation! The best solution may be that at closing the settlement company holds a portion of the seller's proceeds in an escrow account, you get the repairs completed and submit receipts to be reimbursed, and then the remainder of the funds is dispersed to the seller. I've had colleagues do this before. 

Your other option is to cancel the contract and walk away, and your EMD should be returned to you since the seller didn't satisfy the terms of the contract.

The owner is being penny wise and pound foolish. I'd speak to Owner, highlight that the tenant is hurting the showings and yet is doing nothing illegal that you can stop. Suggest to Owner that it would be better financially to let tenant out of lease and have improved showing experiences. This is in YOUR best interest, too, because as someone else mentioned you don't want Tenant to share his bad experience with your management company. If Owner isn't willing to release Tenant early, try to salvage your own reputation by making sure Tenant understands this was Owner's decision, not yours.

Valid point: primary residence mortgage loans will always have a lower rate than an investment property mortgage loan.

John's plan above is pretty solid. I'd note that $1,000/mo is the payment on his current mortgage, and may not be the payment once he's refinanced. Remember to consider the cost of maintenance and updates, too. I generally recommend setting aside 2% of the property's market value for that, so in this case $4,300/year. If your friend will make $600/mo after mortgage and condo fees, that's $7,200/yr. $4,300 gets reinvested in maintaining the unit, and he takes $2,900 profit annually. Plus the property appreciates, and his mortgage is paid by someone else.

If you figure he leaves 20% of the value in when he refinances, or $43,000, his ROI is 6.7% (2,900/43,000). To determine if this is the BEST plan of action, you'd have to evaluate other investment opportunities and their ROIs. I would say, though, considering the transaction costs of buying and selling real estate, keeping something he already owns as a rental property will generally be lucrative compared to buying a new investment property.

If this is your friend's first foray into real estate investing, he may want to rent it out without refinancing, and see how he likes having a rental property. If  he finds he can do it well, then he can refinance and use that cash to buy more properties.

The house looks fantastic, and the numbers are amazing! I know the work you and your wife must've put in to keep the costs down.  Doing manual labor in a house in Florida without AC?! That's commitment! 

Yes, I think the market is too hot right now and there are not many deals to be had. 

I agree with the agents who note that you will rarely have clients in your car, and the last thing you want when starting out as an agent is a car payment. A nicer car would qualify as a "nice to have" when getting started, not a "need to have". I'd highly recommend waiting until you've made enough with real estate to cover the cost of a new car, and then look into getting something. 

When that time comes, you'll be better prepared to get the perfect car as you'll have experience as an agent, and know what you want. 

Hi Matthew,

Loudoun County addresses this by not allowing kitchens to be built in basements.  So if you have a basement unit in the house, odds are it was installed without permits. The long-term rental of part of a house should not be an issue. Short-term rentals might fall under Loudoun's new laws about AirBNB-type rentals, which at this time require only registration (taxation and permits likely to come in the future).