All Forum Posts by: Amanda Hensley

I did the same thing as Will B. Not for real estate investing but I saw the same benefits to the other investing I was doing. I have greater control, loan options and less fees by setting up a solo 401K plan. I also used SunWest Trust and have been very pleased with their service.

Awesome, congratulations!

You're definitely on the right path!

I would also be curious as to how "flexible" that asking price is. Are they selling to retire, or for other reasons. If you can get a little more info on the WHY, you may have room (and reason) to offer a little lower than 150 and come out even better. Also, how long has this prop been on the market, and have their been other offers previously, or no looks at all? That can also tell you how much room you have to negotiate.

You're right that would mean that your mortgage payment (principal plus interest) would have to be less than 835, assuming you are keeping these rent prices. The taxes and insurance (and vacancy rate, maintenance, prop mgmt, etc) are all a part of the "other side" of the 50%.

But that's kind of all hypothetical since you are going to live in the one apartment. But it is important to understand, b/c eventually I would imagine you'd rent it out, too.

I would still want to know more about the property, like 1) are the utilities separated so that the renters pay their own, or are the utilities included in the rent (or billed back separately)? Are there washer-dryers in the unit (or could there be, or could you add coin laundry in the basement, etc)?

Are there any deferred maintenance items that you might have missed in your inspection (e.g. how old's the roof, the HVAC, the plumbing, the water heaters, etc)?

Thank you Mitch, this is helpful. We will consider deeding the home to a new LLC once we close.

LOL! They can look it up on the tax assessor's site for your area, if they're really nosy. But hopefully you won't be driving up to collect the rent check in a Mercedes.

Since we are new at this, and we're pretty much buying a house that we've not personally seen, 2700 miles away, we used a buyers' agent whom we trusted to buy our first REO.

My first one is an REO:
Fannie Mae owned.

4BR/2BTH, nice neighborhood in small town
Originally listed at 72,900 I believe.
Dropped to 69,900 and caught my eye
I offered 55K
They countered at 67K
I countered at 58K
They came back at 60K and I accepted.

It needs between 5K and 7K to renovate and I plan to hold and rent at 800/month, going rate for that size/area.

The nice thing about this for us, We qualified for a Fannie Mae mortgage with 15% down and they take care of up to 3.5% closing costs, so it's not taking a lot of our own cash for this.

Using the 50% rule with several confirmed numbers (taxes,insurance, PM, repairs are still roughly estimated), looks like we'll get about $100 cash flow.

My plan is to rent it for 2 years and if we need our cash back then (we're starting a brewery), then renovate it further to sell retail.

This is my first post at BP. This set of forums has been incredibly, incredibly valuable for us to get started in real estate investing. Thank you all for taking the time to keep it up.

So we just signed the sales contract on our first rental home, in rural TN. It's a Fannie Mae home, and we will be carrying a Fannie Mae mortgage on it.

Totally separately is my day job - I am in IT and have an LLC (taxed as S-Corp) for that business. This LLC has its own business insurance. Separately my husband and I carry an "umbrella policy", aside from our primary home and auto insurance.

So now that we're adding a rental house to the mix, I'm wondering what our protection strategy should be.

I will talk to a lawyer as well (though I'm not certain if I should talk to one locally in WA where I am, or in TN where the rental house is - I suspect WA since that is where the majority of our assets is)..

Anyway, I'm thinking the best option for us right now is to increase our umbrella policy, if needed (and of course to obtain adequate landlord insurance on the rental home). It doesn't seem like it would help liability-wise to put the home into its own LLC, since we still have to carry the mortgage personally and as such, the lines between business and personal assets are cloudy and wouldn't hold up in court if we were sued (and most likely the lender wouldn't allow us to transfer the home into another entity anyway). And putting it into the LLC I already have for my career doesn't seem smart as it's mixing two different things, and could open my other business into issues, assuming I even could from a lender perspective.

Am I on the right track, or are there things I haven't considered?