All Forum Posts by: Brendan Miller

@Salima Bekkat-berkani it's hard to give input on a quick dollar amount or % since insurance costs will range widely based on the location, age of property, your own insurance claim history, etc. If you have an insurance provider, then I'd call them and ask for a quick % based on the properties you're looking at. Otherwise, the best way to do it is to have your broker give you a quote. I typically use 0.4% of the purchase price when I am just quickly analyzing a deal, so $1,600 annually for a $400k property. Once I'm ready to make an offer, then I'd get an actual quote from my insurance company.

@Glenn Brathwaite I like your strategy of going after a fourplex and house hacking it. If you're flexible in terms of where you live in NY, then you can look for parts of the state that offer fourplexes within your price range. The other option would be to reduce your criteria to either a SFH, duplex, or triplex depending on the price, and still take advantage of the FHA loan. I think the important aspect is just getting started.

@Melanie Johnson I would pay off your CC debt before you start investing. I’d have to imagine it’s a high interest rate ~15-20%, so for investing to make sense you’d have to find a deal that is outperforming that. Not having CC debt will make financing easier also

@Avery Bustamante welcome to AZ, it's a great place to live and as you mentioned it's growing well and the outlook is strong!

@Jim Stanley I think you already answered your own question. If the carpet was old and you were already planning on replacing it, then I'd thank them for being honest and bringing it your attention and tell them not to worry about it. It sounds like they've been good tenants for you over the past 4 years, so I personally wouldn't charge them if it's wear and tear like you said.

@Hideaki Yen I'd say basic accounting is helpful to getting started. I think understanding how to properly estimate deals on properties (the BP Rental Calculator is a great starting point for this). Aside from that, I think you need to know how to manage your rental income and expenses and be organized with that part since you'll need it at tax time. You'll continuously learn more as time goes on.

@Christin Prince reach out to PenFed Credit Union, I just opened a HELOC on a rental property of mine several months ago at 75% LTV

@Evan Jackson I haven't done it personally, but I've heard a lot of the guests on the BP podcasts that are successful with renting by the room in college towns. That might be something to look into.

@Jennifer Gardner they IRS exclusion that I referenced only applies if you utilized the property as your primary residence for at least 2 of the past 5 years (which I did in my situation). If you used a 1031x to purchase the property, then you won't qualify, even if you used it as a primary residence.

As for the $1.5-$1.8M range, those are rough numbers, but let's say you list and sell your condo at $500K, and then let's conservatively say $50K for closing costs (6% commissions + other stuff; this likely high). Again, if you did a 1031x you shouldn't owe capital gains on that. You could use the $450K as a down payment on a property and secure a loan at 75% LTV (so roughly $1.8M purchase price at the high end). You'd still want to keep a reserves account, which is why I put the $1.5M on the low range.

@Dominick Galinis you could ask if the seller is interested in seller financing also. Sometimes if investors are nearing retirement and liquidating their portfolio, then seller financing is a good option for them as it allows them to spread their capital gains taxes over multiple years and it allows them to keep making money on the property via interest. You'd need to understand what the seller intends to do with the money once they sell. If they are rolling it into other deals, then seller financing may not be a good fit for them.