All Forum Posts by: David Murphy

The gov't was pushing "home ownership for everyone" since Clinton started doing it in the 90s. Bush continued it. When the gov't backs banks and requires them to do things that don't pencil out, it was really started and caused by the gov't. The taxpayers got hosed. Small banks were hosed. Dodd / Frank should be terminated.

I have been using the 4-Square method for analyzing rental properties for a couple of months.  

My question is at what point in time to you feel that you no longer need to stash 15% per month in savings for repairs for a property?  

• Do you save until you have xx% of the property value saved up? 
• Do you just save the 15% in an account indefinitely?  
• Do you want $x.xx saved per door in an account and when you hit that number you stop saving and move that money to additional income for yourself or use it to finance other deals?  

I'm trying to look past the first 3 - 4 years without getting too far ahead of myself. My personal goal is to have around 75 - 80 doors renting in my local market within the next 6 - 7 years while starting from Zero today.

Thanks for your opinions and personal experience on this topic.

David

@Bill Rich I've enjoyed reading this thread and wanted to ask a question.  After looking at various internet resources, I haven't seen an answer to these two particular question.  

1. When getting approved for a 203k loan, is there PMI paid on the entire balance of the loan amount (rehab + purchase price) like I assume it would be?
2. Do 203k loans require the buyer to actually pay the PMI until they have paid off 20% of the loan amount or can a buyer get out of paying PMI once their property appraisal shows they have 20% equity and a new loan is used (if needed)?

This is a great thread by the way. I feel many people have these questions regarding using your 401k, IRA, Roth IRA, etc for real estate investment but don't have a lot of good resources to go to in order to get their questions asked and answered.

Christopher Reynolds, I am currently looking at options to use an old 401k with an old company I USED to work for in order to purchase a property right now under a 203k loan if I can find a reputable company to offer it.  

My previous employer allowed for employees to borrow up to 50% of the 401k balance in the account at the time of your request.  The interest was paid back to yourself.

Since leaving that company as an employee, I have gone back in to my fidelity account to see if the loan option was still available and found that it is not.  It was only offered to those who are employees at the time of the loan.  

Due to my desire to learn more about my options for using 401k money to help me acquire a property, I have not moved the money from my prior employers 401k plan because it has been performing well.  I hope this doesn't hurt me in some way.  

Good Luck.

A property we are looking at for a rental is "rumored" to have had a tenant that was making meth in one of the units. We are going to do a preliminary walk through because this property checks a lot of boxes and has great potential if the meth rumor is false. We will do our inspections and check into the rumor by having testing completed, but I wanted some advice from the Bigger Pockets Brain Trust. Is this the type of thing that you run from or do you consider it as long as it is handled correctly? I imagine it will be manditory to disclose that there was meth in the past and it could complicate things down the road. Thoughts?