All Forum Posts by: Jonathan Cope

A similar situation happened to us last summer. A bank decided that funds from my spouse’s account were a gift to me with 36 hours to go before closing. Cue a giant eye roll. We had our attorney explain the situation to the seller’s attorney - ‘the bank of idiots has done xyz’ - with a proposal that the seller carry back the disallowed ‘gifted’ balance until the deal otherwise closed, at which point we would write the seller a check outside of the closing for the disallowed ‘gifted’ funds the seller carried back. In our case the ‘gifted balance’ was only a fraction of our down payment. The seller agreed, because they wanted to sell and did not care about the source of our funds, and the HUD was adjusted to reflect the seller carry back. And we closed.

Yes, make the fix to the garage. A quality garage speaks to the general quality of the house and will communicate the seriousness of your approach to business. Consider renting the garage separately to a contractor or as a local alternative to self-storage if it won’t command incremental rent from a tenant. In many urban locations the garage rental can approach that of a small apartment.

Nick Bleser Yes, we explain that automated payments need to be received by us by the due date. Allowing 7 days best ensures compliance. Additionally, we are usually a month ahead on our mortgage payments to de-risk the timing. The 7 day period now often results in our tenants preferring to pay via Venmo.

We’ve used Cozy for a while now to process payments. Most of our tenants have the payment processed 7 days before the due date to ensure we receive payment in a timely manner. Increasingly tenants prefer to pay by Venmo. We accept timely payments as tenants wish to make them.

The Chicago Fed offers an interesting mapping tool that may help some. The tool allows one to enter a city known to work for BRRRR, say Grey’s Harbor or Kansas City, and it will share with you comparable cities nationwide by relevant economic statistics (e.g., growth, income, population, housing cost, etc). Not all cities are included in the tool, but there are plenty to explore. Should be more accurate than your darts.

Congratulations On to the next one

Consider a cash out refi to a 30-yr fixed. If it appraises for 300,000 and LTV is 80 you have enough cash out equity to acquire another property approaching 300-350k. The fixed 30-yr (1 or 2) will help you lock in inexpensive long term funds, good leverage for your equity and no tax bill.

Joe Villeneuve A) Yep, it’s a bad deal. And the RDPD solution is unconventional. But I’d still find a way to keep it. Long term it’ll be nice to have. B) Yep, that kind of Captain. Has worked for me - though I’ve avoided these shoals to date. C) We can watch poker anytime while chatting about RE.

Can you use a modest amount of cash flow from a second rental to cover the spread, in the spirit of Rich Dad Poor Dad? Can you plan a re-financing that would re-amortize your loan schedule to improve cash flow? Can you generate unusual secondary rent from someone other than the existing tenant? Garage storage? Attic storage? Parking? Can you contest your RE taxes? Selling might be wise, but I don’t sell.

Hi Chad, Yes, we refinanced a unit to buy a new unit. Each property was a single family home. Both were financed ~75 LTV. We used 30 year financing to lock in long-term, low interest rate funds for both houses. Each loan was just less than jumbo. The refi rate was 50 basis points higher than the purchase rate. The original equity now supports $1.2mm of value (2 houses) up from $650k (1 house) in 2016.