All Forum Posts by: Daniel B.

Hi,

  I have a wood burning stove that I am trying to circulate heat.  In the room is an air return that is basically just a double wall cavity from close to the ceiling to the furnace which is in the basement.
I would like to get some of the hot air from the stove  into the basement.  I would like to add a vent with a fan to suck air from the wall by the stove (on main floor) to the basement.  This is not easily done without tearing into walls.  Can I mount this 4” pipe basically at the grate of the air return and run it through this air return (just drywall) until it hits the basement ductwork?  I would then cut a hole in the ductwork the same size of the new vent and seal so this vent would not leak into air return. 
   is it against code to run this within air return?  Home is 5 years old and I have electric in an outlet next to the air return cavity so it seems like the easiest way to do it?  I would use electric to add some kind of a fan to force hot air from main floor into basement…

I’m sorry,

 It’s 2-3 weeks of work and she wants out of her lease that ends in late January 2 months early?  When exactly is work starting?  
 
 If she pays utilities tell her new windows will save her money.  Windows interior work is 1 day in her unit, confirm with contractor her unit should be done in 1 day.  I just had 10 windows installed in a rental, 1 day job.

 She can tape a towel to her windows so her dog doesn’t see outside workers and play a radio for the dog for sound.  Putting new windows in when she moved in with older windows is being nice, it is her choice to move out.  understand it’s a triplex so can’t time it with all units being vacant at the same time, but most sane tenants would be grateful.   Been a landlord for 15 years and tried being really nice to start.  Got walked in by a couple tenants.  Be fair, not nice.

It says you live in Florida.  Everyone is moving to Florida, no reason to invest out of state.  Find where the growth is, invest in the outskirts of that area, look at the local municipalities master plan and buy ground that is in their future development map but maybe can't be developed yet.

Thanks,

  Previously after we got married we both went back to grad school and have paid for it mostly with cash, so cash was a little tight and wanted to leave reserves on properties.

    Credit union had/has 1.99% advertised  car rates with .25 discount with direct deposit.  1.74% is pretty cheap money and we can earn a better return, it’s cheaper than school loans so the plan was that our car loan at 1.74% was really our last/only school loan of about 15K. 

  Mortgage rates now are at 5%, if auto loans are at 1.74% still, that we will save interest by borrowing on car and putting more cash towards future properties.  

seems strange auto loans are so subjective In how they are calculated?

Hi,

My wife and I have always purchased used cars. With multiple kids now including a another baby on the way, we are looking at buying a new vehicle to get something safe for our family. We are looking at getting an auto loan while interest rates are low (save cash for investing). We purchased our current cars with cash. We have excellent credit, are responsible with our money, etc. My question is in regards to how loan officers calculate rental property to qualify for a mortgage vs how someone in the bank/credit union branch calculates your DTI when applying for an Auto loan. This has been a problem for us in the past.

When we apply for a mortgage they will calculate rental property separately and then add the net number to either our income or debt depending on if its positive or negative. As an example, if someone makes $5,000/MO and has a personal, owner occupied house with a mortgage/Rent of $1,500 and nothing else than their DTI (debt to income ratio) is 30% ($1,500/$5,000). Now, if you add in a rental property, that rents for lets say $1,000/MO and has expenses/PITI of $600 a mortgage company will either due a full calculation to calculate the Net Income, or simply take 75% of rent, which is $750. So to make it simple, a mortgage loan officer will take $750-$600 = $150 of positive cash flow. They would add the $150 rental income to their $5,000/MO salary to get $5,150. $1,500/$5,150 is 29% DTI, so a cash flowing rental property caused their DTI to improve because the rental property is done as a separate calculation with the net income from that property being added to the persons income and nothing added to the debt column (assuming property cash flows). This is how it works in the "real world" trying to get loans for businesses, properties, etc.

However, the last time we applied for a car loan (after having been approved for mortgages that year) the assistant branch manager just took the rental income ($1,000/Mo as an example) and added it to the income side and put the debt payment ($600 PITI as an example) on the debt side. So this rental property looks like it is at a 60% DTI by itself. Add this to the above scenerio and the person would have $6,000 income and $2,100 Debt. $2,100/$6,000 is a 35% DTI, quite a difference from the 29% if calculated this way, and this is with adding in one rental property. We have multiple rental properties and calculating it this way wreaked havoc on our DTI....even though we had purchased and refinanced properties that same year with the same tax returns.

We felt a little red faced getting turned down for a small used auto loan.  We owned about a dozen cash flowing properties at the time (both had jobs, near perfect credit, no credit card debt, literally only mortgages).   We kept trying to tell the branch associate they were calculating it wrong, but they were insistent that is how the calculate it for Auto Loans.  

Has anyone else had this happen, or can you confirm if this is how it must be calculated for auto loans?  

Thanks!

You are wise to try and get the buyers to stick around and convince them the tenant is buying somewhere else.  You might need to the buyer funds held in escrow if the tenant doesn't move out as well as the tenant to get them to move out "x" amount of months post closing. I would think this should still be plan "B" though.

You make assumptions that your tenant will be able to get his sublease tenants out.  They may have an agreement - even verbal (that your tenant wasn't authorized to make).  I would not worry about a pissed off tenant.  His sublease tenants may also be pissed off and refuse to leave - its not quick or easy to pick up and move shop.  No matter what happens with the deal, I would send them notice that they have broken the lease - and have your lawyer send it on their letterhead.  If their sublease tenants don't move, then you win.  They probably don't want to give up their cheap rent any more than he does.  

I have had a couple tenants who were going to buy the rental they live in for years now...always a couple months away from qualifying.  Don't assume your tenant will be able to qualify for the purchase and get the change of use with the City approved....

@Maria G.

C.

A. Sounds good on paper but will

Move out in a year and vacancy kills landlords.

@David Pai

Things are still selling. Did you get 80K off list or was the property overpriced? Doesn’t seem like it cash flows even with the 80K off. You might feel like you are getting a good deal 80K off, but if it’s overpriced to start with….

Get a 3rd and 4th quote. Just asking your neighbor and someone who doesn’t represent you isn’t enough. $70/Mo for 360 payments is over $25,000. Take the lowest rate if you proceed.

Agents aren’t even supposed to only present 1 option, should be 3 minimum so they aren’t liable of the lender doesn’t work out….

@Christopher Wall

Yes. I do this with a lot of great tenants. I like to look up the rent estimate on Zillow and assuming it is higher than current rent or the rent you want to raise it to, take a screen shot. Send it to the tenants and tell them you need to raise the rent, but because they have been great tenants you want to keep it below market value (what Zillow says is market).

I also bring up that if last year was a tax assessment year explain taxes also went up, or of this year is an assessment year you expect taxes to go up. They feel appreciated because you are trying to keep rent below market value but understand your expenses are going up.

Hi,

On self directed Iras I understand it is more about who you can invest with vs what you can invest in,

And my IRA can not self deal with myself or most of my immediate family members. I have done 1 self directed Ira note to a builder.

I was previously told by my self directed Ira rep that I could sell a lot to a builder and my IRA could give the builder a loan since my Ira is not directly dealing with myself, the builder is in between us. This is the customer service rep on the phone so I wanted to double check this, but that is what I was told.

With that background, my question is, can I sell my personal primary residence and have my Ira fund or partially fund the buyer at let’s say 4% fixed for a period of time? The price would be close to an appraised price. I realize appraisals based on sales from the last year are based on lower interest rates. My thought is I can still get the same value if buyers had access to similar financing. My Ira funds are sitting in cash earning nothing so earning 4% fixed for 5-10 years I am ok with. I would not invest it now as some are whispering a recession is coming. We built our home new 4 years ago so I am comfortable with it as an investment. We owe $280,000. New homes sales (a premium) have sold for the $700,000-$850,000 range, I’m assuming ours is worth $650,000.

If yes to the above, could i personally take a note for 1/2 and my Ira take a note for the other half (subject to down payment from buyer).

Is this allowed?

Thanks!