All Forum Posts by: Andy D.

I would simply ask your broker about the figures and have him/her explain why, for instance, the interest rate is what it is. I am typically able to chose in a range of ~.75% which has influence on loan origination fees and so on. I don't always go for the lowest rate but I'm an investor, not living in the property (totally different game).

I actually have no idea if the interest rate of a loan has any influence on how a (mortgage) broker gets paid. Something I shall ask my broker. :-)

As for the relationship: I have no relationship with my lender whatsoever as I'm still working in the realm of conventional loans with local lenders who then sell off the mortage to the big national banks. I write those banks a check and couldn't care less about them. Then again, I also don't care about the local lender as they "sold me out" (kidding) and I have no more dealings with them. But my mortgage broker, she is the one I have an excellent relationship with as she gives me what I need! And she obviously has a good relationship with (various) lenders. That's the whole point: she is the door opener, translating my needs into a suitable lender. And if you don't trust your broker you need to definitely find another one. But first of all: communicate with him/her.

I'm with @Thomas S. and others on this one. Debit in itself is not bad. But it needs to produce a benefit. With real estate it would be a mortgage which allows you - if you do it right - to make money off that debt, all things considered. The benefit of your debt is over now. You graduated (presumably) and will now benefit from the education you obtained making use of debt. Your student loan, therefore, has reached the end of its usefulness. Something that isn't useful is something that one should get rid of, especially if it costs money. And the student loan certainly does. And yes, using money you save to invest to generate income is obviously a great idea. But only if it makes you more money than what you have to pay for your debt. Get rid of it as quickly as possibly and, if at all possible, try to save a bit on the side to acculate money as a cushion (emergency fund + potential downpayment fund). Every bit counts.

Oh, and besides all this: don't foget to live! Life is too short...

@Joe Villeneuve Huh? Never heard of compound interest? Lombard lending? Re-investing dividends/interest? Preferential tax rate for long-term investments and so on?

And "In the Stock Market, you spend it and that's it": I don't even understand what you are trying to say there. I can definitely tell you, though, that I have seen A LOT of portfolios that will prove your statement to be entirely wrong. Invested in nothing but solid blue chips, no speculative investments.

I don't know where you are coming from but 4.5% as of this writing is, for non-owner occupied conventional, a not too shabby number! If it is owner-occupied (i.e. by you) then it does seem a bit high.

And I'm not quite sure why a broker should "rip you off", really. But if you're not satisfied, well, shop around...

@Justin Frye The idea of such an addendum is an interesting one. Me, as a seller, would consider this (under my own terms) if I were confident in the tenant. He selected her for a reason, assuming he did indeed look into her history (since you know about it). But also as @James Wise said: why should he consider this? Are you the only person around willing to buy the place? Probably not...

So I repeat what I wrote: why all this worrying? You are looking for something to be/go wrong. That's not good and certainly not a good way to start out.

Assuming she is a good tenant and so far has indeed paid rent on time and not otherwise caused any concerns: why worry? Not to mention that she is on a one year lease which you will have to honor. Depending on when that lease term started it's over soon enough anyway and then you can either let her go or do M2M. If she wants to stay. And as you are living next door it should be easy for you to make her understand - in a nice way, when opportunity suits it - that she definitely has to follow the lease. Why turn something into a problem when it isn't?!

@Alex SImon My post happened between your later one and the others. Some things have been answered and you seem to be approaching this the right way. Good.

@Alex SImon Have you asked your PM?? How long did he/she take to inform you about the the two units not paying rent?

How did you find the PM, how's your relation with him/her?

When was the last time you spoke with the PM? Are you managing the PM? Getting regular communication from him/her and steering him/her? When was the last time you have been informed about the condition of the place? Have you inquired about it? Were the units checked recently? Any issues? Any repairs done lately? Etc etc. You have to know all this (and more!). If not, you're not properly managing your manager and he/she most likely became lazy and possibly didn't react to some complaints from the tenants and so on.

At this point I, personally, would not contact the tenants. Don't get involved, especially if there is and eviction coming up. But make your PM give you extensive information on what the heck is going on. That is what a PM is getting paid for: to be at your service.

And then, as has been said, inquire about the screening process and check if it's appropriate. But first understand what the problem(s) are.

Being a landlord is not about being lazy and just counting the money that comes in. It's a responsibility. And yes, you may have to go up there and sort things out... Good luck!

I cannot provide any figures, statistics etc but I can tell you three things: 1) you can "statistisize" the heck out of everything, 2) your statement is too broad and 3) it's too apodictic.

It very much depends on how/where one invests. In both types of investments. And: one can lose money in either one of them! Very easily...

Leaving aside the factual problem of him not qualifying: he should also run the numbers in the context of the bigger picture. Does it really save him much money? The refinancing costs, especially for a significantly lower rate, in relation to the new interest rate will make it a fairly long time before he will actually save money. While this obviously depends on the difference between the new rate and the current 5.5% as well as how much longer he will actually still own the property it is still something to consider.

Another idea: why not sell the place to, for instance, you, during which time you could refinance in your own name and have him rent the place from you, making you a landlord with all the benefits of deducting interest etc.? You would have to crunch the numbers. Again. Also: maybe even (partial) owner financing for the downpayment part that you would have to come up with could work? All this is, of course, dependent on you being able to qualify for a mortgage to begin with. ;-)