All Forum Posts by: Dayne Delano

Hoping to get some refinance insight on a single family property currently owner occupied but will be a rental down the road. I’ve heard issues with lenders and renting properties with owner financed mortgages, like due in full & mortgage fraud. (Id like to do it right, and stay on the safe side, if possible)

At some point in the future, we will rent the home. My question is, is there a way to refinance a loan that is good to go when we decide to rent it out?

Thinking of taking advantage of these good rates with the intent of renting the property down the road.

Thank you for your time.

@Marian Smith

Thanks for your take Marian.

I’m willing to accept the deterioration over time, I have no doubt it will be in much worse condition over a long rental tenure. Being a newer home (2008) and a Tile roof. I believe it is built for the long run, along with perhaps some pragmatic and cognizant changes to the home “over-time” like lifeproof/waterproof flooring throughout, and a low maintenance perhaps water free front and rear landscape. Things conducive for a more wear resistant, less trouble down-the-road, rental atmosphere.

@Dan Heuschele

Just a hypothetical 50% rule breakdown (please help me if something looks out of wack, i’m both a newbie and using a rental cash flow calculator, I’m sure somethings off)

Monthly estimated Rent Fee: $2400

Mortgage Principal/interest: $888.29

Monthly taxes: $592.71 (high because of Mello Roos bond, I could possibly refinance and bring this cost way down paying it off using equity in home)

Monthly insurance: $77.33 (would assume would rise substantially with landlord policy)

Initial monthly cashflow: $841.67

Maintenance costs: $200

Vacancy cost: $65

Property management: $104

H.O.A. : 118

Final monthly cashflow: $360 (not my math lol)

Just a really rough figure to see how it looks to you guys.

And a few questions, typically does the electric bill & utilities get paid through the landlord or directly to companies?

Thank you.

@Dan Heuschele

Thank you for your input.

@Kenneth Donaghy

Hi Kenneth,

Thanks for your input. Water/Trash is separate. There is also separate mello roos bonds here and it CAN be paid off. We just chose not to for the time being. I believe mello roos is around 28,000. We’ve been here since it was built by Centex in 2008. We’ve had alot of interest on our property in terms of listing it. Its a popular street and when one house goes up for sale, we get alot of knocks from the listing realtor. But I am totally in it for the long game, not so much this house, but just looking at all the options and making the best pragmatic course of action. You guys are a huge help.

There was a poster above who mentioned if I converted it to a Rental I would have a ~40k tax bill or something along those lines. If i’m in it for the long term, I would be willing to if it was the best course of action. Your thoughts?

Thank you.

@Dan Heuschele

Thanks for your input. HOA sends us annual budgets but im not sure how easy it is to fudge city GAAP numbers. Perhaps an accountant could see if they are in good financial shape?

-Our payment is 1600 @ 4.25% tax & ins (perhaps time for refi?)

-rent is getting around 22-2600 a month from local comps

Currently i don’t know the formula for 50% rule, I’ll do some digging.

Thank you.

@Dan Heuschele

Thank you for taking the time. We are doing our diligence and hoping to make the best decision. Fact is, if we hadn’t outgrown it, we would stay. I would be happy to rent it cash flow neutral and hang on to it for 30+ years building equity.

Heres a few facts about the home.

-brand new elementary school built across the street.

-HOA fees $118 but include in home high speed internet, And clubhouse access with 4 pools and indoor spa, full huge weight/workout room, basketball court, tennis courts etc.

-creek across the street and jogging trails everywhere.

-4 bedroom/ 3 bath 2300 sq feet.

I’m not sure if these are things conducive for renters or a big sales price. But definitely an asset I would have a hard time just selling out of. Your thoughts?

Would love to hear more advice, takes, trials, tribulations, etc.

@Bill Brandt

Thank you for taking the time. I’d like to learn more about california on terms of landlord friendly or not. Thanks for your input.

@Katie Lepore

Thank you for taking the time.

We've outgrown our family home, but instead of just selling it, we wanted to keep it & rent it long term. $200k + equity in California home. Hoping to transfer to LLC? Good idea? Thanks!