All Forum Posts by: Brian Morgan

So what you're saying is that you are under reporting?

The IRS computers do quite a bit...

Welcome to BP Derreck! Just wanted to say hello neighbor!

HI Jesse,

First, Thank you for your service! I wish best of luck finding a place that will work for you.

That being said, I hate the 50% rule! As you already mentioned, it is a guideline. Using 50% or 60% on this property will throw the numbers way out of whack.

Do you know what the taxes and ins. will be? Does your debt service number include these as part of a PITI payment? Or are you separating them out? The 50% rule is including taxes and ins.

The biggest factors are going to be:

Management (10%), which you will likely manage on your own to start, then need to contact out when you need to move on.

Vacancy (5%-10%) depending on area. Even if you are renting at 100% all the time, I would never go below a 5% vacancy factor.

Maintenance (10%) probably lower for new construction, but I would budget this in and build up a reserve.

The other expenses are going to be the water, sewer and trash which you should be able to get from the town/county as well as the seller.

If you have the Tax and insurance #'s you should be able to come up with a more accurate number based on the actual expenses instead of the 50% guideline.

All the Best!

BUY IT!!!!!

You are clearly willing to weigh optimism over common sense. Multiple responses have outlined potential areas of calculation error in vacancy, expenses, and financing, yet you still choose to ignore these facts. So please buy it, feed the gator and "try out" being a landlord. I'm sure someone will get a great deal on the back end from the foreclosure.

There are so many variables that can trigger a return to be selected for audit. Some of the criteria changes frequently (sometimes daily). A credit or Form that may not have triggered a return to be selected last year, may this year. I can't go into the ratios, but as long as your paperwork is in order, you won't have anything to worry about.

Because I work there, my return is reviewed every year!

If this will be an FHA loan, you need to factor in upfront MIP and Monthy MIP because you only have 3.5 % down. You cannot appraise out of the MIP down the road, and it is a big hit.

Just using the PITI calculation I get:

$390,000 sales price
$12,350 3.5% down
$376,350 base mortgage amount.
+$6,568 UFMIP
$382,936 final mortgage amount

$382,936 @3.5% is $1,719.55 a month
$376,500 x 1.25% MIP is $392.02 a month
$3600 in taxes is $300 a month
$1500 in insurance is $125 a month

Total payment: $2,536.59

With other expenses like utilities, maintenance etc. I would not purchase this property given the gross rent you listed.

I agree with Ann that the Mass laws are very pro tenant. Having dealt with an eviction a few years back, the MA housing court is nothing short of a circus. The property is less than a mile from NH... So close, yet so far!!

I also think Ann probably had the best suggestion, which was to try to get this guy to sign off that he has vacated and abandoned all property on or in the property. No Courts, No storage fees, no BS.

My backup is to bag up the small stuff and dump it in the basement for a while. There really isn't a lot, aside from washer/dryer and car.

The former tenants cousin ( A very Good Tenant) lives on sight, so I may give the washer dryer to him. That way if he comes to collect them, he'll know where to get them.

Still not sure about the car.... Looking into town law regarding unregistered vehicles. Really don't want to get them involved, but I don't want it there with the winter on it's way either.

Thanks again for your replies!

Thanks for your replies!

I think I am leaning with John on this one, with the cost/effort, versus chance of him coming back after me down the road. The washer/dryer are actually in great shape. I am more than happy to leave them.

The tenant never turned in any keys. The car is unregistered meaning it has no tags at all. I'll check with the local PD.

I think I will call and give him once last chance, and explain that I will be disposing of everything, as well as contacting the local PD about the car. The good news is that the unit is in good shape and needs very little aside from a deep clean. I should be able to get it turned around fairly quickly. Just wish tenants weren't so lazy on the move out.

Tenant was issued 30 day Notice. After communicating with the tenant, I have learned that he has moved into a new apartment. Last months rent was paid upfront, nothing is owed.

Went to change the locks and found a few items still in the unit, including a washer/dryer, some dishes, a baby stroller, and a few other smaller items. There is also an issue of the tenants unregistered car (Not running?), in the lot, on the property.

Contacted tenant three times to remove remainder of items, and car. A week has passed and nothing has been collected.

I am looking to turn the unit around as quickly as possible. What are my responsibilities regarding the abandoned property?

A fellow landlord has suggested that I may need to go through the eviction process. This really isn't an option, as it would cost more cash, and I would lose a months rent in the 6 week process.

I welcome your thoughts, on what you would do.

I have Allure in a few of my units. 3 years and going strong. Durable and Super Easy to install. The floating floor is great for a subfloor that has slight imperfections. Has survived tenant toilet overflow, normal shower use, and mopping in the baths.

I would certainly recommend this product for rentals.