All Forum Posts by: Brook Boatman

Welcome Sam! 

I am not familiar with the real estate market in NZ but I recently purchased a duplex and am house hacking.  It's great that your mom is willing to help out with your first investment property, I would encourage you to have in-depth conversations with her to determine what her expectations are.  Would she be expecting you to repay her in full, or pay her a percentage of rental income, or not repay her at all?  If you purchase a multifamily you must calculate how much money you will have left after paying all expenses and saving for future expenses.  If you find a solid deal it could help you save for your next project.  One thing I would like to mention is that it's always good to have cash reserves when starting.  Expenses pop up sometimes and it's not always wise to pay for those expenses on credit.     

As for saving up cash for a down payment I suggest reading books, searching online, or speaking real estate investors in NZ to see how paying no money down may be possible.  You also have to think about how you will finance the flipping part of the deal (your brother can probably speak to that).  I also encourage you to look into cutting your expenses along with making more money.  If you are able to reduce your expenses in your personal and business life, you will have more to reinvest.  

I would talk to your brother to see what he thinks about partnering.  It's definitely worth the conversation to see if it's something he would be interested in. Before you have the conversation think more about how you could contribute to the partnership.  He would be bringing his renovation skills, what would you bring to the table?

Good Luck!

I am currently buying a multifamily using the VA loan.

Important things to remember:

- VA loans have a funding fee, but they do not require monthly PMI like most other loan types.

- You can only buy 1,2,3, or 4 doors.

- Navy Federal allows you to purchase a single family or duplex with the VA loan, other mortgage lenders like Veterans United allow you to purchase up to 4 doors.

- You must live in the property for 1 year.

- VA loan appraisers have a different set of minimum requirements than many other mortgage types so make sure the property you look at can meet these standards or it may not be an option.

Good Luck!

Brook

Hello Everyone!

As I grow my business I want to offer rentals that give back to the environment.  I plan to install metal roofs, energy efficient appliances, plant small pollinator gardens, and eventually install solar panels (when solar energy becomes more affordable and if my market will allow higher rent for a lower electric bill).

My question is if pollinator gardens could be a liability as they attract bees and other stinging insects.  I plan to put these gardens as far from the house as possible near the property line, and would choose other landscaping options near entrances.  Lets say a tenant gets stung by a bee while maintaining the garden, could I be held liable?  Could I avoid this by stating that tenants are responsible for the lawn but I will maintain the garden? Could a line be added in the lease to say the landlord is not responsible for any injuries incurred while maintaining the lawn and garden?

Thank you for your input!

Brook

Welcome @Shawn Rogers II!

I am originally from Nebraska but living in PA. It’s great that you’ve been learning and have goals of creating a system that your daughter can someday oversee. 

As you are just getting started and are interested in rentals and flipping, I recommend reading (or listening) to the books in the book store here that interest you. I prefer to purchase mine through the Audible so that I can listen while I drive to work. 

That being said, learn about your market and make a plan to get you where you want to go. One great option is buying a multi family and renting out the other units while you live in one. This is not realistic for all people, but if it fits with your lifestyle it’s a great way to eliminate a rent expense, or have your mortgage mostly or fully covered. It also gives you exposure to being a landlord and renovations if the property needs work.

Good luck!

Hello Everyone!

I am in the process of buying a side by side duplex where I will rent out half and live in the other.  I have talked to USAA and State Farm so far but they gave me very different information.

USAA:

    Homeowners Insurance

Dwelling: 310,000

Personal Belongings: $155,000

Personal Liability: 1,000,000

Monthly Payment of $173

State Farm: 100% Replacement Cost

     Rental Dwelling

Dwelling: 162,000

Personal Property: 8,100

Business Liability coverage: 1,000,000

Monthly: $43

    Homeowners Rate

Dwelling: 158,000

Personal Property: 118,500

Personal Liability: 1,000,000

Monthly: $43

Total Monthly = $86

I have read different places that house hacking situations should be insured under landlord insurance (to cover the structure) and renters insurance (to cover personal property).  I asked about this when doing both quotes and neither seemed to fully understand what I was talking about.  Any guidance on this would be appreciated!  Thank you! 

@Miguel Luna I'm on active duty and just went under contract on my first property (a duplex). 

To kick things off I applied for a mortgage through Navy Federal AND Veterans United. Navy Federal has lower interest rates (usually) but they will only allow you to buy a single family or duplex where Veterans United will let you buy 1,2,3, or 4 units. I highly recommend buying a multifamily to start off with. House hacking rooms is a great idea while you are stationed in the area, but when you leave that becomes more difficult. Having multiple units allows you to provide separate spaces for people and have a signed lease to fall back on. An important thing to note about the VA loan is that you are required to occupy the property within a reasonable time after purchasing.

Next I found a real-estate agent.  I went through Dave Ramsey's site here and chose the agent that has VA loan experience. One plus of @David Pere's site is that he will help you find an agent that is VA friendly which is extremely important. Have your agent give you automatic updates from the MLS in your price range. This allows you to see properties as soon as they hit the market so that you can be the first to analyze, schedule a viewing, and make an offer. I highly recommend including a personal letter with your offer telling a little about yourself and family, this personal touch goes a long way.

Once you make an offer on a house and have it accepted, you go under contract.  This is when the due diligence process starts.  Now is the time for the home inspection, reviewing standing leases, title inspections, utility verification, and many other things.  It's also the time to get your mortgage finalized and your legal documents (leases you will be using and such) reviewed by a lawyer.  This is where I currently am so I will leave it at that.

Overall, the most important thing you can do right now is learn.  Read/listen to all the books you can, attend the free weekly webinars on this site, search the forums, and start analyzing properties in your area.  Feel free to message me if you have any questions! Good luck! 

@Steve McGovern I would prefer something closer to home. If I’m not satisfied with those in my area I will let you know. Thank you! 

Hello Everyone!

I am officially under contract on a duplex in Chambersburg PA! It is fully occupied but both leases say the lease ends the day the property sells and they have 60 days to sign a new agreement or leave. I plan on keeping one side and not renewing the other so I can move in. I am searching for an experienced lawyer in the area to look over the new rental agreement, any recommendations and general advice would be appreciated!

Thank you!

Brook

@Brandon Roof Thank you for your input! I’ve been analyzing a lot in my area and most are way off from cash flowing. Right now I’m between making low offers (that probably won’t get accepted) and finding a mentor in my area to share their knowledge. 

$100 a door with management is the goal, getting closer every day!

Hello everyone!

I had a walkthrough on this property this week and am crunching the numbers based on what I saw.  I am thinking of offering closer to 200,000 (listed at 299,000).

Additional information:

Roof will need replaced within the next few years.

Unit D is occupied by a person who is incarcerated, moderate damage in unit.  Will request that owners do not renew tenant's lease (which is up in September) and return unit to 'rent ready' condition likely using deposit money.  If purchased, I will be living in unit D.

Two units rent for 630, the other two for 615.  3 of 4 units are up for a raise in rent this year, but based on area $650 is around the max for a 2 bedroom in that condition.

Long term tenants in units A, B, and C.

Full septic system inspection and well water testing will have to be done in addition to inspection and appraisal for financing.  

----

Running the numbers at purchase price 200,000, raising rent in all four to $650 per month, and spending 30,000 on repairs gets a monthly cash flow of $353.74 and an ROI of 10.61 (once moving out and self-managing).

Please let me know if you need any additional information, or if I missed anything.  Every bit of input helps!

View report

*This link comes directly from our calculators, based on information input by the member who posted.