All Forum Posts by: Ben Pearce

Wondering how everyone here returns security deposits to their tenant? Is it okay to just send a personal check via certified mail? Should it be a money order? Cashier's check? Thanks

My wife and I will be house hacking with a duplex once we close at the end of January. I have some questions around paying the mortgage and also about the use of a business credit card. 

I currently understand the importance of keeping personal/business transactions separate. I will be opening a separate checking/savings account for the other side of the duplex to house rent income and property related expenses. One of my main questions with this then is what my best route is going to be to pay the mortgage. The total monthly payment will be pretty close to this: P&I - $1,295, Taxes - $420, Insurance - $175, PMI - $220, for a grand total of around $2,100/m. We expect to bring in $1,200/m in rent for the other half. If we only have $1200 coming into the rental account as income what is the best strategy for paying the mortgage? Setting up two separate payments (the $1200 coming from the rental account & the difference coming from our personal account)? Making one payment by transferring the difference into the rental account each month from our personal account? Or vice versa by transferring the $1200 to our personal account and paying that way??

Secondly I am questioning the use of a business credit card to charge expenses of the rental property. On top of having a separate checking/savings for each rental property (we intend to purchase more), I am curious as to how some of you more experienced investors scale with using a credit card for expenses? Would I open another card for each property like with checking/savings accounts? Or use the same card for all properties and reconcile expenses for each property at the end of the month and pay accordingly from each? 

Sorry for the long post, I have so many questions as a new investor. Any advice is appreciated, thanks!

Bought a Duplex in search of some FHA financing strategy.

Basic Info: Purchase Price $333,000 - Locked in Rate (30 year) 2.625% - FHA Insurance 0.8% or approx. $220/m

Trying to think through two routes at the moment and would appreciate some input form more experienced home buyers. 

Option 1: Put 3.5% down, then 1-2 years down the road refi to conventional to ditch being stuck with FHA mortgage insurance for 30 years. Worried about landing a higher rate, say 3-4% plus additional costs for a new loan. Afraid this could just make it a wash with paying the insurance for 30 years.

Option 2: Put 10% down, only stuck with FHA mortgage insurance for 11 years. Peace of mind of being locked in for 30yrs at 2.625%

@Patricia Steiner, made an addendum to the offer today. Everything looks like it will work out. Got confirmation from the seller that the current tenants have been made aware they are to vacate by closing! Thanks for the advice

Hi There,

My wife and I are in the process of closing on a duplex (Jan 29th). Currently, both units are occupied with tenants. Both tenants are in month-to-month agreements, renting severely under market. Even better, the tenants are mother/son relation (sarcastic lol). We are going to use this property as a house hack and we fully intend to terminate both agreements due to both being smokers and having 6 dogs between the two. The lease on our current dwelling is up at the end of March so we want to move in as soon as possible after closing and spruce up the other half to get ready for a new tenant, renting at market value.  

Our main question is how do we handle to current tenant situation? Do we start a dialog with the seller with what are intentions are so the tenants can prepare? Do we wait until closing day to serve a non renewal notice to the tenants? In anyway do we have the power to have the tenants out by closing day? Any advice is appreciated, thanks! 
   

Hello,

I'm new here and excited to enter the world of real estate investing. I have been taking in as much information as possible over the past few months (including reading some of the bigger pockets books). I am looking for input (please be blunt) on my current thought process with how my wife and I intend to procure our first rental property. 

In the next 6 months we intend to purchase a single family home that needs some work. With that being said we are hoping to get a pretty decent deal on the property. The thought currently is that we will purchase this property with the intent for us to make it our home for 12-18 months, all the while performing the needed (rental grade) rehab. Once we have the rehab completed we would look to find another property that we can do the same thing to, while converting the first property to a single family rental and repeating the process until we have 2-3 rentals under our belt. From that point we would look for a more permanent residence to move into and transition to buying straight up rental properties by hopefully leveraging some of our equity. Is this a worth while strategy? Thanks.