All Forum Posts by: Cooper B.

I know there have been several threads on similar subjects in the past, but I couldn't find any with quite the same details.  Tenants moved in 2 months ago.  They are both on the lease.  They met rental qualifications only with their incomes combined.

I found out today the wife has moved out and plans to get a divorce.  She asked to be removed from the lease which I declined in the moment.  I reached out to the husband who says that he plans to stay.

The issue is that the husband on his own would not meet the rental qualifications.  I am assuming that the wife will not be contributing to the rent if she is no longer living there.  

So is there anything I should do at this point other than cross my fingers and hope that he keeps paying? 

@Andrew Postell If the initial mortgage (LLC to individual) is for ~75% ARV, but initial purchase price is for much less than that, then how do I make the proper paper trail for the lender to see? If the LLC funds a loan for more than the purchase price, then I assume the attorney just gives me (the buyer) a refund for the difference at closing?

Also, is there a reason the same end result could not be accomplished if the LLC takes title at the initial purchase, rehabs, rents, etc., then "sells" to the individual. The individual gets the fannie/freddy loan as a new purchase. In other words instead of a refinance, it would just be a new purchase.

This is a great thread.  @Andrew Postell thanks for taking your time to answer all of these questions.  My question is related to qualifying for the Freddie/Fannie loans.  @Alex Zokan asked a similar question to mine so I'm tagging him here as well.

At what point will the rent from the subject property be included in DTI calculations? @Alex Zokan

For example, if it takes 8 weeks from the time of purchase to get a property rehabbed and a tenant in place, will the rental income be factored into DTI calculations when I apply for a conventional refi?

Very nice deal!

Rhonda, how long have you been operating the short-term rentals in Sevierville? What kind of returns are you seeing on STR in that area? Not trying to hijack the thread, but I'd love to hear more about how those are working for you!

My observation is that deals that meet those criteria in those areas are going to be few and far between, and likely they won't be typical MLS retail listings. Might want to keep your eyes out for FSBO, wholesale deals, foreclosures to be purchased at courthouse, or the online auction websites. But if you are wanting to finance the purchase traditionally some of those methods may not be an option for you.

Those are great neighborhoods though and values are increasing. Keep in mind that the "decent parts of Avondale" were not that way just a few years ago. So if you have a time frame of several years you might consider some of the border areas with upside potential (not so decent areas of Avondale, Crestwood north closer to Woodlawn). 

Is the neighborhood association you are referring to Greater Crestwood Inc.?  I don't know for sure but I wouldn't think they would have the direct ability to dictate what you do with your extra bedrooms.  I do know that there are a number of airbnb rentals in Crestwood currently.  The contact info for the officers of the neighborhood association are easily accessible on their website, so it certainly wouldn't hurt to ask them about it directly.

The city could pass an ordinance to prevent short term rentals, which is what Homewood did to combat Airbnb. 

so how did this turn out? Were they able to finish by Tuesday?

It seems like you pretty much already know the answer to your question.  In general Mountain Brook, Homewood, even Highland Park and Forest Park are going to be higher quality properties than those over the mountain in southside.  But they will cost proportionally more than the rents they will bring.  So its up to you what level of return you need vs. what level of risk/hassle you are willing to accept.  Good news is that where you want to live is 10 minutes from the best neighborhoods in town or some of the worst, so whatever you decide you can be pretty close to your rentals.

Ok, thanks again for the response.  As I have it set up now I can run a balance sheet by class to look at incurred expenses for an ongoing project, or P&L by class after the project is sold and moved to COGS.  It works ok, but with a bunch of ongoing projects I was hoping I could get a quick idea of what has already been spent vs. what is yet to be spent all within Quickbooks.  Otherwise I find myself not having a great idea of how much cash is available for new purchases and how much needs to be in reserve to finish each of the different rehabs.  

Like I said before, I realize this could be done in excel pretty easily but as a rule I hate to spend time entering every transaction into multiple pieces of software.