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All Forum Posts by: Carl Schmitt

Carl Schmitt has started 11 posts and replied 133 times.

If you've built up a decent balance in your 401k, have you considered taking a loan from it as a down payment?  I know mine allows a loan of 50% of the vested balance that gets repaid directly from your paycheck.  

You briefly mentioned a roth as well. Roth IRA contributions are available for withdrawal at any time.  If you touch the earnings, though, you'll be subject to tax and 10% penalty.  

Give it some time with the girlfriend.  Mine wasn't a big fan of the house hacking idea at first either.  2 things changed her mind (in my opinion).  

1- She saw me constantly reading bigger pockets and would ask what I was reading.  I would give her examples of others that had success with it.  The idea of living for free or close to it became appealing.

2- She saw people she knew in real life that are currently house hacking or did in the past.  She babysits for a family while finishing law school.  It didn't dawn on her until 6 months after I told her about house hacking that they were doing exactly that.  

I think there can be a misconception that rental properties are only in bad areas.  You CAN have the best of both worlds- a tenant that helps cover the mortgage and a desirable neighborhood.  

Post: Invest or focus on Student Loans

Carl SchmittPosted
  • CT
  • Posts 135
  • Votes 100

Like a lot of others, I would go the house hacking route.  Of course, it depends on the market but I'd say in most areas you can live very close to free each month.  If you're paying $1k/mo in rent now and can cut down your out of pocket to $400 by house hacking, you're $600/mo closer to paying off your debt.  Not to mention, the $400 your paying each month goes towards reducing your mortgage vs $1k in rent is money you'll never get back.  

On a 225k FHA purchase and some seller paid closing costs/prepaids, you should be able to keep your upfront costs to roughly $10k.

@Richard Diaz

I'm just starting out in CT as well but can at least give you my opinion.  First, I'd find out if there's a meet up in the New London area.  if not, it might be worth the ride to New Haven or even up to the Hartford area.  Having first hand conversations with experienced folks really open my eyes.  

As far as numbers, here's what I'm using for class A and B areas: 5% vacancy, 5% repairs, 8% capex, and 10% property management.  That's for working class suburbs in the Hartford area.  I bump those numbers up as the quality of the neighborhood goes down.  

Again, just my opinion but I've heard similar numbers from folks at the two meetups I attend.  

A Plus Exteriors in Milford

Hi Brian,

Welcome!  Small world- I grew up not far from North Adams in the Dalton area.  I would tend to agree with you.  I would probably shy away from North Adams as well.  However, I think there is money to be made in a lot of the surrounding towns.  

If you're looking for an agent still, my mother is an agent in the area.  

Make sure you know your state's landlord/tenant laws.  I noticed several of the people that posted "rent is due on the first, late on the second" seem to be in landlord friendly states.  The Northeast doesn't normally fall in that category.  In CT, there is a 10 day grace period.  Not much you can do before then.  

I don't know the exact laws in NY (or NYC specifically) but finding out would be a good place to start. 

Post: Section 8

Carl SchmittPosted
  • CT
  • Posts 135
  • Votes 100

@James Mc Ree 

Thanks.  I had a feeling those numbers seemed too good to be true.. even for the government.  So it sounds like there's no additional financial incentive to rent to Sec 8 other than a portion of the rent being guaranteed.  

Post: Section 8

Carl SchmittPosted
  • CT
  • Posts 135
  • Votes 100

I'm trying to wrap my head around what can/should be charged for a section 8 rental. For example, in my market, section 8 says they will pay up to $1455 for a 3 bedroom. The property I'm looking at would normally only rent for $950 or so. If I were to put a section 8 tenant in, could I automatically charge $1455 for the unit? Or does HUD base it on what other units are going for and simply limit it to units under $1455?

I live in the West End of Hartford and the north end properties always look tempting.  Then I consider the fact that I won't even drive down Albany ave after dark.  I'm not sure I'd want to be showing up in the middle of the night for a tenant issue.  

I also worry about Hartford's finances.  While all of the surrounding towns have mill rates in the 25-40 range, Hartord's is over 70.  A lot of the properties I see seem to have artificially low assessed values.  For example, smaller multi family properties on the market for 150k and assessed at 50k.  I haven't done a ton of digging as to why that is but with the city in as much trouble as they are, I worry that a property's taxes could easily double from one year to the next.  

In my opinion, part of a paying on a commission basis is that you're paying for performance.  If they can't lease it, they don't get a penny.  I've often thought that ongoing management fees should be based on collected rent, not just what the lease states the rent is.  Making sure rent is collected is the most crucial part of owning a rental property so if you can't accomplish that, why would I pay you?

If you're strictly paying an hourly rate for time worked, there is very little incentive for them to be efficient with their time.  In fact, I think it promotes "feet dragging".