All Forum Posts by: David Kramer

BP Community,

I recently got a SFR under contract that was built in 1900. Though extensively rehabbed, the age of the property has made insurance brokers I have spoken to a little wary. I was offered only Cash Value policies instead of Replacement Cost properties. Additionally, carrying a coverage of only the mortgage amount reduced my annual premium by quite a bit. More specifically, the mortgage is approximately $107,000, which is well below the cost to build a new property if I were to experience a total loss event. For investors with experience dealing with older properties, what insurance advice do you have to offer?

Hey BP Community, 

I am currently working through a property tax reassessment on one of my rental properties (property tax jumped on a SFR from $2800 last year to about $4000 this year). Who has had success in working with local governments on this, and what sort of techniques and tactics worked? Thank you for sharing your experiences!

@Jose Jimenez, generally speaking, the property needs to be relatively turn key to use the VA loan. A VA loan won't be approved for a gutted house that you'd then do some major rehab on.

@Jose Jimenez, the only "downside" that I see for VA is the VA funding fee that increases with the second use. The fee varies with percent downpayment used. However, I use quotation marks as the upsides (lower down payment, no PMI, usually better rates, and the ability to rapidly build wealth through house hacking a primary residence) more than make up for it! I house hacked a SFR with the VA loan in Pensacola, FL for over a year, and it was an awesome experience!

If the duplex is already sub-metered and the tenants pay their electricity bills directly, then it is a moot point. If they don't, it may be worth spending the money to have a second meter/service installed if possible. That would likely cost less than installing panels on the roof. And as @Sean McDonnell mentioned, I haven't seen any data on solar panels adding more to the equity of the property than what they cost to instal (only really a factor if you are looking to sell in the next 5 years anyways as the panels depreciate)

What do your loan rates / cash flow look like on the properties you own with loans? 

It also depends what your goal is! It doesn't hurt to have cash available to jump on a good deal when it presents itself. That may take a couple of months. If you are looking for cash flow now, then it may make more sense to pay down one of your properties. If you don't need the cash flow now and are more interested in long-term capital appreciation, then it may make more sense to hang onto the cash for a down payment on another property. 

Equally curious. I would be open to grabbing a beer and meeting up on their outdoor patio. 

@Michael Klaus - Welcome to BP! There are a few geographic specific forums that you can find if you just type Grand Rapids into the search bar. Setting up a keyword alert will also help you identify new forums created that are talking about Grand Rapids.

BP has a wealth of knowledge on most strategies and niches - so if you need help getting pointed in the right direction, let me know! 

Good Luck!

@Rachel Schwartz - Awesome! Deciding to take that action is half the battle. Looking forward to learning from your experiences! 

Welcome to BiggerPockets! If the numbers make sense on the house back I would start there! For starters, financing terms are more favorable on owner-occupied properties. Secondly, you kill two birds with one stone. You get experience getting your first investment under your belt and you get to significantly reduce (or eliminate) your housing expense allowing you to invest more money per month into future deals! Like you said, just because you start with a house hack doesn’t mean you won’t be able to do both!

I hope this helps!