All Forum Posts by: CJ Witmer

Hey Nick Dillaha , I actually just asked my attorney if I should do exactly what you did. My intent was to avoid the 25% down payment that the bank wants if I finance through the LLC instead of much better terms for personal financing. Although you've already purchased it in your personal name (instead of the LLC) I'll share with you that he informed me this is not the best route to go as the loan must stay in your name, unless you refinance, which leaves you personally liable. This is just his advice to me and may not apply in your state, etc. In other words, this may or may not apply, but I just wanted to pass along info. Wish you all the best!

Patrick Liska please let me know your bank of choice. Hopefully the private message comes through as I seem to be having problems getting them. I did find a local bank, but they want 25% down and there is a pre-payment penalty if I pay it off sooner than 5 years. He said I can pay extra on the principle without a penalty, but I can't pay off the loan before 5 years without a penalty. I can see the bank wanting some guarantee in their return, but why is it a problem if I pay them faster! My plan was to refinance between 6 months and a year from now, get some equity out of it and repay my father ASAP who is helping with the down payment. We did get through the house yesterday with the inspector and both he and the friend (who I see as my unofficial mentor) agreed it was "above average" condition for age, etc. and both also agreed it'd probably be a good deal, even in the $85k range, so I do feel a lot better about that! The inspector was not as concerned about the furnace as I thought he might be, but he did recommend having an electrician come in to give me quotes on eventually bumping up to 200 amp and addressing some loose sockets and gfi outlets around the sinks. He didn't indicate a full re-wire as I was dreading. LLC paperwork is submitted so we should be an LLC in a week or so. We're heading in the right direction!

I actually called the PM company and they charge 8%. Also, I get emails that people are sending me PMs but I'm not seeing them. I guess I won't be able to see if someone sends me info on what's wrong if I'm not seeing them...duh. My wife and I went through the place and it's not bad. Im meeting with the lawyer tomorrow to setup an LLC and the Home inspector comes in tomorrow after that. So the ball is rolling... I've also started a conversation with a local bank for financing through an LLC and with someone from the property management company. Steady as she goes!

TImothy Talarico Great input. There are currently no tenants. He let them trickle out as he knew he was selling. I need to sit down and look at all of his receipts when we meet and asses that. Appreciate it!

John Kesner I had also considered leaving the furnace go and when she goes, put in electric baseboards since elec. is already split. I see your point about the single heating bill split between them.

John Kesner I had thought of switching things around. Currently he pays heat and tenants cover trash/water/sewer. I was going to swap as those are, usually, more of a fixed cost (it would seem). A tenant could leave all the windows open in the middle of winter and have the heat at 84 degrees. What do they care if I'm footing the bill!? Gotta make them care what the heat is set at.

I don't know how to edit a post so I'll just add this here. Our plan was to use a PM for the first 6 months to see their value. If they are valuable, keep going. If no value, since my wife is a stay-at-home Mom, she could handle some of the duties. Her aunt does the exact same thing for about 10-15 of their properties and they have said before they'd be happy to show us the ropes.

Patrick Liska I think maybe I actually did figure 10% in the calculator, I don't recall to be honest. I've confirmed several time that he said 3%. He said they're not stellar, but they dealt with the nastier stuff like when he had to have people evicted. Again, I figured in a lot of cushion for "first timer" mistakes.

Patrick Liska I planned in a purchase price of $65, but he's verbally confirmed $60. I did figure in 3% management fee as he said that's what he pays now. I planned $4k for furnace as my mom just had hers replaced for $4k and $10k for the rewrite but, neither seem to be immediate needs, but a home inspector should be able to verify. The plan was to figure in all that, but start renting the house immediately and let the income put money in the "new furnace" account and "rewire" account. If that makes sense. Jason Krick it's in Chambersburg.

Deborah Moser there are no tenants at this point, he knew he was planning to sell so he let them all trickle out. He's bringing me all the paperwork when we meet to go through the place (heat bills, insurance bills, tax statements, etc.) The electrical and furnace are the big items, so he says, but I want a home inspector to be certain that's all there is, again, my motto is "trust but verify". I know I seem excited, because, I am excited about the prospect of being more financially free, but buying a money pit will do the opposite. I do plan to do my due diligence and he's even told me there will be no hard feelings if I don't take it. This house was his house for about 10 years. He raised a family upstairs and rented the bottom. He has since moved to a very nice neighborhood and wants to cash out for kids college and a new truck and to pay off his existing house. With all that said, you guys have great advice and are obviously looking out for a fellow BP member and that's awesome! I thank you very much for the input and would love any more input.