All Forum Posts by: Daniel Sprague

I wouldn't let it scare you off, but I have watched some very unfortunate situations unfold being a mortgage consultant over the years when it comes to bad foundations and bad home inspectors.  2 opinions is a must, and  make sure the sellers know how much it worries you.

The key is you hold all the cards.  It is very possible that the foundation issues aren't a huge deal, but no matter what you need to make it a big deal.

welcome.  

Hi Joe,

I have lake property in MN, and some knowledge.  Feel free to message me with specific questions.  I may be able to offer insight on area, what I think you can get for rent, etc.

Thanks and good luck

Luc,

Agreed.  I have seperate credit cards at normal rates for each of my LLCs.  These are for smaller items that need to be taken care of quickly, for instance a new stack washer/dryer.

The new cards are generally only looked at as an option for projects that are more than a few thousand dollards.

Thanks for the input.

-Daniel

Hey BP,

Just wanted to share how i changed junk mail into a financing option for projects.

I started using interest free credit cards back when i was 23 when i didn't have enough money to finance needed upgrades.  To be specific, my first rental was bought with original wood siding (terrible condition), and I had no money left after my down payment.

I saw new siding as the biggest hinderance to higher rents, so i took that piece of junk mail advertising 18 months interest free financing that i had been throwing away since i turned 18, and applied for the card. The job was $13,000, the contractor accepted credit cards point of sale, so there were no fees (trully no interest), and i paid it off over 15 months with cash flow from the property (the property cash flows about $1,000/month after PITI).

This is pretty elementary, but i think the biggest positive to this stategy is it gets needed renovations done now.  If left to saving $13,000, cash flow would have been spent elsewhere, and i would be paying a monthly "hidden interest" based on the type of tenants, and lower rents recieved b/c of worse curb appeal.  It is very possible that the home would still be covered by rotten wood siding.

Now that i am more seasoned i dont necassarily have a need to continue to finance projects in this manner, but i still do.  I see it as a great form of OPM as it is unsecured, and you can pay $50 or $500 based on if you had a good or bad month as long as you pay the entire balance off by the end of your interst free period.

Obviously i am leaving out the risks involved with this type of financing, but i wanted to open up a discussion to see if other people are doing this, and if there is anything i am missing.

Thanks,

Agreed with everything Chris M said. 

If you can owner occupy the next one you should be set going either FHA or VA... the opposite of what you did for your first.

Hey Graham,

I am down in Mankato, but feel free to message me with questions.

Welcome

Personally i would suggest and LLC for each property you acquire. This isn't a huge deal if you dont have ton of equity in any of them (100% financing etc), but if you do have equity you are going to want protection for each property seperatly.

The other way to think about this is doing things the right way from the beginning.  It may not seem like a big deal to have 2 different llcs for 2 different 100k properties that have little to no equity, but if you dont do it right when you are small, you wont do it right when you are big.

Mortgage Consultant

Welcome Daniel.  If you have specific questions about MN feel free to reach out.