All Forum Posts by: Bradley Sainsbury

My new tenants want to pay a full year of rent upfront. Their reasoning is, they are selling their house to move cities for a new job so will be getting cash from that sale and they want to pay upfront so they can work on rebuilding their credit and savings to purchase a new home in the next two years or so. 

Was wondering if anyone has experienced this before and what are the considerations for such a situation?

Well lots of other great suggestions coming in, all are appreciated. 

To add, there is central AC but I will say it is nice to have a fan going. I live in a row house nearby and in these hot summers I run my fans all day and night. For those not familiar with the area, summers are hot and humid. 

Appreciate the other replies. Got it, that’s what I’ll do then, get it fixed. 

Any Baltimore electrician/contractor recommendations out there?

Thanks all

Thanks for the replies!

There is no attic above, like a lot of these old Baltimore row houses, this one is a flat roof directly above the ceiling. 

Yes the fan/light has the pull switches. And I also suggested to the previous renter just unscrewing the can lights and using the fan/light. 

Good idea on getting a second opinion, will give that a shot. But overall it sounds like something y’all wouldn’t worry about fixing as there are free solutions to the problem?

Good day,

I’ve owned one rental (and my first) in Baltimore for a little over a year. Both bedrooms have an interesting electrical set up. There are ceiling can lights and also a fan/light combo, but it is all hooked up to one switch. So you aren’t able to run the fan without the can lights on. 

Prior to renting to my first tenants last year, a contractor said it will cost about $2k to rewire this as they need to open some drywall to run some new wires and then fix all that. 

First tenants never mentioned this as an issue. Second tenant did not like the setup so I offered a few options to resolve the situation and we settled on that I would buy an Amazon Alexa for each bedroom and smart lights, that way the tenant could just tell Alexa to turn off the ceiling lights, cost was under $150. 

Well this tenant moves out after two weeks, unrelated to the lighting situation. My next tenants won’t be moving in until 9/1. So I have a month to decide, how do I proceed with the situation? Do I get it fixed the right way? The previous renter didn’t leave the Alexa’s and lights, of course, but was charged for them so I’m not out any money on them at the moment, so do I just buy that set up again?

Any help and insight is appreciated. Thanks in advanced. 

Hi Drew,

Thanks so much for the advice and insights! Appreciate the info on the refi process and VA loans, definitely not trying to break any laws.

A ‘partnership agreement’ is on my list of to-dos, just not a priority yet but will start with the forums. 

Thanks again!

Brad

Hi All,

Noob here! Been researching, reading, watching videos for a few months now and planning on buying my first investment property in the next 3-6 months. A couple weeks ago my brother approached me and said he wants to get into real estate as well so we are going to partner up. In addition, I’m in the middle of refi’ing my primary residence since I was able to get a 30yr at 2.5% with 1.5 points (LoanDepot if you’re wondering) current mortgage is 3.5% refi’d this past Feb so not too far into the amortization. My payment will drop about $150/mo.  

What I’m trying to figure out is, do I want to finish the refi process if I’m planning on buying an investment property soon? And if I do, how do I want to approach it. 
Some other info. I have about 15% equity on my primary. My brother just bought his primary two months ago with 3% down so he doesn’t much equity on his place. FICO rates us both excellent. We both have steady jobs making high-5/low-6 figs with assets in the low 6-figs, mostly in retirement-type accounts, and only debt is the mortgage. 

I (humbly) think we are both good candidates to begin buying more property. What I’m concerned about in getting a new loan though, is that neither of us has 20% equity. Is that going to be a problem?

I don’t mind moving into the future investment property during the rehab and renting my house to get us started in investing. I’m looking to do wedge/brrrr type deals. My current primary wasn’t bought as an investment, so I got it “at market price”. Running the numbers on turning my house into a rental, it wouldn’t cash flow on the current mortgage, would cash flow $100ish post-refi, it’s in a more “appreciating” neighborhood of Baltimore. That does include property management so if I did that myself, the cash flow would go up. The Zillow rent estimate is 2,250, but I haven’t confirmed/done my research on that yet. Also, my brother wants to be a ‘silent partner’, I’ll be the active one. 

Some other questions/considerations. If I do the refi, suggestions on if it’s worth paying the 1.5 points, or should I pay, say, 0.5 point for a 2.625%? The current loan estimate has all closing costs added to the new loan, so total new loan about 273k, but I assume I would want to pay closing costs out of pocket to keep the equity, so paying one point less saves about 3k. And then there is the question of does a slightly higher rate (2.625 vs 2.5) offset a slightly lower loan (263k vs 273k) and how does that affect the cash flow. 
If between the two of us, we have about 75k liquid for a down payment, rehab and other costs, the part I’m getting stuck on is the 20% equity on a current or investment property because it might be better for me to pay another 5% at closing to get my equity to 20% so we can put down 3-3.5% on the next one rather than 20%. This is the part I’m trying to get creative with as 5%+3.5% would be a lot less than 20%.  I asked the loan officer doing my refi for any tips/suggestions but he said he only does refis and not new purchases so didn’t have any tips. 

One last consideration is a VA loan. Our dad is a vet and, we haven't asked yet, but he probably wouldn't have an issue as a co-signer to get a VA loan. Do investors use VA loans or does the upfront % keep investors away? Also, just thought of this, maybe he would co-sign a conventional loan since my parents house is almost paid off, they have much more than 20% equity.
I guess I’m just really stuck on how much equity is needed on all these current and future properties.

Sorry for the novel, appreciate everyone’s suggestions and let me know if you need more info in order to provide some insight.

Thank you,

Brad