All Forum Posts by: Gabriel Wertz

P NW,

We want to get out of the city. My fiance has a 6 year old daughter and it's not the greatest area to raise a child. She goes to a private school so it is not a must that we move, but it would certainly be ideal.

Paul B.,

I think that it is great things have worked for you using a similar sort of strategy.

All that posted,

Thanks for the input.

Jon,

I hear you about the 50% rule & I am aware of all the pitfalls you quoted.
I would never consider buying my current home to be used as a rental property. It is more a question of, doesn't it make sense to buy low & sell high?
I would like to take advantage of todays "Buyer" market by purchasing a new primary home (low prices & great % rates).
If I could rent my current home for 3-5 years or until it is more of a "Seller" market I would stand to make a better proffit.

Ok.
In the following scenario what would you guys do? Would you have taken on this deal?
You have a property worth $50K:
You owe the bank $50K
It has never sat vacant for more than a week (easy to rent)
Rents are $750 (decent cash flow)
Home may appreciate little if any in the next 10 years.

It was on the MLS about 4 months ago at $65K.
I will not peruse an owner occupant loan with the intent to rent. I just thought that maybe a bank would take into consideration that a person that does not own a primary home but wants to purchase a home to rent, does not carry the same financial burden of having any other mortgage.

...and for what it is worth Zillow has it at $71,500. With a value between $48K-$72,930.
We installed new siding on the entire exterior, wraped all window trim, most windows are new vinyl replacements, new furnace and duct work, new electric on first floor, new bath, laundry, kitchen, etc..

The property is in Lancaster City, PA.
I will have to do some homework on the "quit claim deed".
Also, what is your thought on the ethics or legallity of the following:
My fiance could purchase this home as her primary home to avoid the 20% down. (She is living in my home). If she would disclose our intentions to a bank do you think they would be OK with it?

I purchased a single family detached rental with a business partner about three years ago. We have tried to list it with an agent twice, with not so much as one offer. It is currently not on the MLS and we are in the 4th month of a 12 month lease with a tenant paying $750.00 a month. We have a total of $49,800 (including rehab) into the property. We originally purchased it for less than $20K on a combination of cash and credit cards. About a year into it my partner was able to qulify for a loan to consolidate all expenses into one loan.
I think we both got a bit scared that we will never be able to sell it. However, after reading you website I am thinking a couple of things:
1. This is a nice cash flow property that I should be thrilled to keep for 20 years.
2. Maybe the fact that agents were marketing to owner occupants instead of investors is why we couldn't sell it. I would think a property that is pulling $750 a month rents would easy sell for $60+ ??
3. I could purchase the property from my business partner for the balance of the loan, plus $1,500 to him for profit.

My question: What would be the smartest way for us to do this transaction as far as closing costs (obviously the benefit of NO comissions, etc...)
I can come up with 20% for a down payment of a $50K sale so a conventional loan would be the best way to go, correct?

Thanks for your input!

Just Don,

I would welcome a hail damage, broken plumbing line, or any other insurance related claim. I work for a Property Restoration Company (fire, water, wind) type damage & we have an In-House Flooring Division so let them rip up my 2 year old carpet. But, then again who wants an insurance claim unless absolutely necessary & a messy eviction.
But yes, I hear you. Those are all tuff questions I need to consider.

Jon,

That gives me quite a bit more to think about.
My fiance and I are around the $125K combine income level. I always assumed the passive losses ARE deductible from my regular income....right? I will read your post a couple of more times, but I want to make sure I understand that part.
Rich: I am all about your 1032 or refi & keep theory.

Thank you both for the replies: They are the exact two views I have been struguling with in my mind.
I've really been leaning toward what you are saying, Rich. I've read countless stories about folks asking if a rental scenario is good when they are breaking even because of the tax benefits & principal reduction. In most cases I would say no. At least for your "entry level" $50K-$60K in this area that will not appreciate much at all over 3-4 years (at least from what I've seen).
The tenants we get in my little $50K a bit "higher risk" than what I believe I could rent to in my current home, PLUS like I said: This home will appreciate.
In this market it just does not make sense to me to try to sell, but my fiance and I realy want out of the city.
Again, thanks for your input.