All Forum Posts by: Brianna H.

 I am against felons also, but this is one of the felonies that I think doesn't define an individual. Don't get me wrong...I am EXTREMELY against drinking and driving and it really changes my opinion about someone when I find out they have a DUI or when someone brags about how drunk they got, but in the grand scheme of thing....so many young adults drink and drive and the ones with DUI's were the unfortunate ones that got caught. 

Thank you for your input. I am so sorry to hear that your brother was lost to a DUI driver. We used to have a program in college where they would give out free rides Thursday-Saturday night, no questions asked. I wish that program could be more wide spread and accepted. 

Obviously the answer is no, right? Here is the background:

I have 2 really great, low maintenance tenants in my rental house. They don't have a record, pay on time, have steady jobs, etc. They have been living in the house for about 6 months now and want to add a friend to the lease. On his application, he disclosed that he has a criminal record and that was verified on the report I ran on him. It was an intoxication assault with vehicle charge 4 years ago. Looking at the punishment for this offense (F3), it looks like the minimum time he served was 2 years (whether this was in jail or probation, I am not sure). It does state that he was discharged from probation in September. 

So what do I do? He does have a job in construction. I would say absolutely no if he would have applied with them in the very beginning, but the other two are great tenants. I kind of think he is already living there, so do I make my current tenants mad by kicking him out? What would you do in this situation?

The same thing happened to me....I bought the house under value and talked to the bank after 1 month about refinancing. They thought I was a nut job probably and told me I needed to wait a year, but I finally found someone that would refinance after about 8 months. Initially, I only put 3.5% down but after 8 months we had 20% equity in the house (it was a perfect foreclosure). 

You should be claiming it on your taxes as income and then you will have proof to a lender that you are, in fact, receiving income for that portion of the house.

As far as I know, the income requirements are the same as a regular FHA loan. Only difference is the appraisal has to come back higher than what they expect the value to be after renovations. So the appraiser goes in (with the updates on a sheet of paper) and values the property as what it will be.

Example:

Purchase for $60k

Renovations wrapped into loan $15k

Appraisal needs to be 'after updates' > $60k + $15k

 Thanks for your insight, and yes I agree...accurate and estimate should NOT be in the same sentence and the title looks really silly to me now. :-P

You're right...I shouldn't waste too much time trying to figure out the ROI. I know it won't predict my future returns. I was just curious because so many people post about an ROI and I am hesitant to post anything similar because I don't feel like I have an accurate way to portray this, but now it sounds like no one really does. I'm thinking that ROI is really only effective in examining whether a house is worth buying as an investment.

Wow! I will need to re-read this when I didn't just wake up. :-P It seems as though the way you calculate ROI is consistent with what I am trying to accomplish. Thank you for your insight!

I think this will also help me figure out what to do with my primary residence- rent or sell. :-)

Dominic, I realized today that there are numerous ways to calculate ROI. When I see someone post about their ROI, I wonder how they came up with that number....are they using total rent income - PITI? are they conservative like me and only include what they can positively say is income (excludes management, advertising, repair estimates, etc)? Someone might post a 50% ROI, where I would come up with a 5% ROI on the same property.

I can and I am deducting capex expenses from my profit, but I have no earthly idea if what I am saving in that category is enough or too much. I read a post a few months back that stated you need to save around $200/month for capex. I am only saving $100 and I have seen many similar responses. 

Hence my post. I don't actually cash flow on my property, because every dollar that comes in has a title (repair, capex, mortgage, etc). The overage is applied as additional principal on my mortgage. So my effective ROI (based on my conservative view of the term ROI) would be 0%, or 4.5% in terms of what J Scott said earlier regarding the interest rate.