All Forum Posts by: Daniel Kramer

My sister asked me to review her lease. She lives in Boston and this is an older 5-unit with hardwood floors. There is a note that requires her to cover approximately 80% of the hardwood floors. I understand the desire for that as a landlord, but is that really enforceable? I mean if she signs it, then I would guess it is. I'm tempted to advise her to give the landlord a call and say everything is great, can't wait, but can we strike this clause from the lease. 

Investment Info:

Single-family residence buy & hold investment in Perrysburg.

Purchase price: $81,000

SFR in Perrysburg, OH
-Purchased: 81k
-Renovated: 55k
-Appraised: 180k
-Cashed-Out: 135k (75% LTV)
-Rental Rate: $1,495

Purchased this as a foreclosure at a courthouse auction. We obtained title on 2/20/2020. Renovation was about 6 months & 55k, which included a new furnace, all new windows, flooring, kitchen, two bathrooms, tree removal and landscaping. This was our "furloughed during COVID" project, so we did a lot ourselves.

What made you interested in investing in this type of deal?

The neighborhood is very high demand and we got a great purchase price. I liked the multiple exit strategies of a single family residence.

How did you find this deal and how did you negotiate it?

Foreclosure - courthouse auction.

How did you finance this deal?

Private lender for most of the purchase price, HELOC on my primary residence for the renovation & kept cash reserves on hand for going over budget.

How did you add value to the deal?

New furnace, windows, flooring, modified the floorplan for a more open kitchen and a master suite. Full kitchen & two bathrooms. Added a shower to make it two full bathrooms.

What was the outcome?

Refinanced 135k (75% LTV, 180k appraisal). Private lender and HELOC will get all paid back, left a few thousand in the deal after closing & holding costs. Tenants in place @ $1,495.

Thanks for the thorough update, @Andrew Fidler!

I've owned my primary residence house for about 4 years. My wife and I are considering a move in the near future. We already have two rentals, and we want to make our current home our 3rd rental.

With interest rates so low, I also considered refinancing our current home first. I know it's obviously mortgage fraud to buy a house as a primary residence but then not actually live in it. But would it also be mortgage fraud to refinance now at a primary residence rate and then move shortly after?

Thanks!

@Jason Mayers

I just searched this exact question and this was the thread that showed up. I am in the middle of a renovation, not sure when the most advantagous time is to refinance. I understand the rent for the sake of qualifying income for DTI. If that is not a problem, does the rent help to justify a higher appraisal via an income method of appraisal? I've seen appraisals of single family home where both a comp method and income method are used in combination.

Follow up question - do they accept that rent as income on day 1 of the lease or does it need to exist for a couple months before they accept it as a realistic rental rate?

Thanks,

Dan

@Cheryl Mack can you send me a link to the PIN zoom meetings as well? I've always had a tough time getting Tuesday evenings blocked off but now I have nothing to interfere.

Hello again @Stephen Brown!

@Nathan G.

Thanks for the kind reply. I believe you are correct, "odd jobs" that are less than a certain amount of normal pay are still permitted.

I have a full-time W2 job, 1 rental & in the middle of one renovation (brrrr). My company basically furloughed the entire organization for two weeks. It actually isn't a bad deal, we get to collect unemployment to keep paying the bills, we keep our benefits, and we have a job waiting for us on Monday 4/27. 

My question - does my real estate activity prevent me from being eligible for unemployment? I am collecting rent on my single rental and I am going full speed on my renovation with this new free time. You're supposed to not be working to collect unemployment... does that count as working? I'm not really making any money, actually spending it. 

Thanks!

Dan 

@Jourdan Johnson I'm not intimately familiar with Swanton in particular, but Toledo area. Swanton is a little more rural than my liking, there are definitely some cheap houses out there, but limited buyers/tenants.