All Forum Posts by: Brett Baginski

If I was in this situation, I would try to work with her as much as possible.  Does she have family that can help with a rent increase that you can contact?  Are there social programs she can get in to?  Put her on a month to month lease until you can figure it out.  Someone at 85 probably shouldn't be living alone anyway.  Very sad to see that what she is receiving isn't enough to afford a place to stay, plus the other necessities of life.  I don't see how she is getting by now with rent at $800.  Contacting the family might be your best option.  $1050 in NJ is very cheap for a 1 bedroom apartment, $800 with heat included is just totally outrageous.  How was the previous landlord even affording the old mortgage?

Hey @Brian Martin, welcome to BP!  I'm also from central Jersey.  Grew up in the Woodbridge area and now I'm down in Tinton Falls.  Once things open up again, I hope we can connect at one of our local meetups.  

I would also check out the BP Real Estate podcast.  Not only is it super motivating and inspiring, but I feel you can learn more in those stories of success and failure, what to do and not to do, than any book.  Even I'm also a big reader of both real estate and business books, I think I get more value out of the podcast than anything else. 

This is pretty scary because lenders are making it so easy to apply for forbearance, yet nothing in the fine print spells out the consequences that you may face when going for a new mortgage.  I knew it sounded too good to be true that you can defer your mortgage for a few months just by clicking button online.  There are going to be a lot of unhappy people in the next few years when they apply for a new loan or try to refinance.

All great points!  I think what we are seeing right now is people taking a forbearance/deferment on their mortgage just because it is available to them and being advertised every time they log on to their mortgage or bank accounts.  People who were not affected by Covid-19 and did not lose their job are jumping on this because up front, it just sounds like you add the payments to the end of the mortgage.  

Even if you have 6 months of cash reserves, you can still claim financial distress.  They didn't really define what that means.  Is it loss of job?  Is it your tenants losing their job?  Is it you being cautious and trying to save the money from those deferred payments because you think you might lose your job?

For my mortgage company, all you have to do is check a box and say you agree to the terms, click submit, then boom, you have just agreed to these negative consequences without really even knowing what you just did.

Based on the information from the other posters and the podcast, I would probably hold off on any kind of forbearance for as long as you can.  This information should be shared with more people because I think people are just taking forbearance because they have the option to without knowing the consequences.  I have looked at my mortgage and read the fine print and this information just isn't out there.  

@Ray Johnson The podcast is current and talks about the pandemic and says that credit will not be affected.  From my understanding of the podcast and limited knowledge of how loans are processed behind the scenes, it sounds like this would be a red flag for future underwriters.  Just because credit isn't hit, does that mean that future lenders will not be able to see your current mortgage information?  They specifically mention conventional loans or refinancing within the next 2-4 years.  It is a quick listen at only 7 minutes long. 

Not sure if this has been posted yet, but I think it is worth sharing.  I heard on the Rental Income Podcast w/ Dan Lane, bonus episode from this Saturday "The Ugly Truth About Mortgage Forbearance", the long term effects this may have on an individual that takes this route.  It is only 7 minutes long and worth a listen, but I'll summarize below.

They discuss how this may hurt your chances at getting a conventional loan or refinancing for up to the next 2-4 years.  They are saying that "forbearance" or "deferment" will appear on your record and that 3 of the major lending institutions are already rewriting their underwriting guidelines so that people would be ineligible for a conventional loan for that time period.

Any thoughts?  Maybe a couple lenders can chime in on what may be going on behind the scenes.  I feel that most people are unaware of this and it may have a big impact on the market in the next few years.

So much great information already here, I'll just add my quick story.

My primary residence is in a development with an HOA. I moved here in 2017 and since then my monthly fee has gone from $235 to $280. If rents aren't increasing that could be enough to eat up a good portion of your cash flow. I haven't had any problems with the HOA though. We also did have an assessment one year that we got a lot of heavy snow in late March. It was a very snowy season and I guess we went over budget in snow removal. That was one of the reasons for raising the monthly dues.

Some pros: Will not have to worry about any landscaping, exterior maintenance, or tenants ruining the curb appeal of the property.  That can lead to less cap-ex and repairs eating into your pocket.  The price point is about $50,000 cheaper than a single family house in this area, so a much less down payment when putting 20% down.  In this development, the units don't seem to sit on the market for a long time either.  So if it is a desirable area, the lower price of a condo/townhouse might be more attractive for someone that wants to live there.  

Thanks for your repsonse @William Garcia !  In the end, I filled the vacancy with someone that was not receiving section 8, but I did learn a lot about it from talking with someone that was interested.  She told me that the voucher dollar amount is the amount they are allotted for a specific bedroom house in a specific location.  So in your question, it would cover the $2000, not the percentage.  Hers did not include utilities either, although I think she said some programs can cover a portion.

So this platform would run off of the current MLS database or Zillow/Trulia and filter out properties that make sense from an investment point of view? If this is possible, it sounds fantastic, even for people that enjoy running their own numbers. It can weed out the properties that don't at least break even in cash flow.

I would think that there are many variables that would have to come in to play, such as different down payment percentages, adjust with current mortgage rates, rent estimates, quality of property/amenities, etc.  And also how to get this information into a neatly organized and user friendly format.

Very interesting idea though!  Sounds like a lot of database work and sql queries, far from my level of understanding.