All Forum Posts by: Emily Hall

I finally got through to the loan servicer and they stated that the property would have to be used as a primary residence first, even though the seller had used it as a primary residence for over 1 year. So no go. And second, they couldn't speak specifically without authorization on that loan, but the rep said it was likely the PMI would stay on the loan. So double no go. Doh. It was worth a try.
Thanks for responding, @Kevin Romines.

Thanks for chiming in, @Tanner Connelly. With interest rates soaring, I would love to see more sellers with low interest rates offering loan assumptions! Seems like an amazing way to turn back the clock to better cash flow. This is my first assumption attempt but I will be watching for more for sure.

I'm making an offer on a property (today, on a Saturday) with an assumable FHA loan with a killer interest rate (sub 3%!). I'm "assuming" I can even assume the loan to use the property as a rental (the seller has lived there for more than 1 year, so that 1-year requirement has been met, I can argue). I believe the seller's escrow portion includes PMI.

If I put 20% or more down, can I get the PMI removed without losing the stellar interest rate--meaning, can I get the PMI removed without having to refinance out of this FHA loan? Defeating the whole purpose of assuming the loan...

The loan servicer's assumption department wasn't open today to answer my questions; I want to get my offer in over the weekend. I know I can offer today and then find out for sure during my due diligence period. But I was hoping someone here knows the general answer. Thanks!

Originally posted by @Stephen Akindona:

@Emily Hall, this should NOT be happening on all your properties. Unforeseen things can happen but what you're describing seems like a pattern. Something is not right, maybe the screening of the potential tenants is lacking but this is not typical! Let me know if I can help you in any way!

Thanks, Stephen. I will reach out privately, if you don't mind, to hear your local perspective. 

Three of of my first 4 tenants with Memphis Investment Properties/Reedy have left early/broken leases; one after 9 months and the other 2 after 14 months, breaking the new leases they had just re-signed.

The cost for tenant turnover just keeps going up. My houses were all fully rehabbed when I bought them. All are solid B neighborhoods.
- The "required" scope for the first house, May 2020, 3bed/2bath : $2438. 
- The scope for the second house, just in Dec. 2020, 3 bed/2bath: $3010
- The scope for the third house (tenants only lived there 14 months and it's only 981 s/r), 3 bed/1bath: Grand prize of $7368
Apparently a pipe burst, probably a month ago during the big storms. Just heard about it today even though I've asked repeatedly for an update since the tenant vacated in late January. I'll be submitting an insurance claim of course, but the scope costs besides the water damage still come to $2735. Plus $2500 insurance deductible. 

They have told me each time a tenant left that the entire interior needs to be repainted. That's a large chunk of the scope costs. 
Communication with Reedy is difficult. I have to ask and ask for information. My contact there is very polite and friendly, but things move very sloooowly. And time is money.

I am very much questioning whether turnkeys can cash flow. They may appreciate, but cash flow is negative when tenants stay an average of 12 months and a turn scope is several thousand dollars PLUS loss of rents PLUS leasing commissions to find a new tenant.

Originally posted by @Zayne Ruth:

@Emily Hall this is awesome information! I have always been curious about turnkey companies and have always thought they would be a great idea but people dont seem to use them as much as I would expect. Why is that?

@Zayne Ruth: My own observation is that BP is primarily for the DIY real estate investor. There's a sense of pride in doing everything yourself. And that's great, nothing wrong with that! But there are many different ways to make money in real estate. My style is not the DIY/rehab way. I still manage two properties myself but will stop eventually/get property management even for the local ones, and I plan to continue buying turnkey in other markets.

My strategy is to use real estate to achieve financial independence, to buy back my and my husband's time. Not create more jobs for us. Buying turnkey is the best way for me to do that. There's a fear factor at first (to buying nonlocally, no matter how you do it), but do your due diligence, ask tons of questions of the provider, shop around, ask for referrals from others who've done it. The fear subsides when the rent checks start rolling in. (But always keep a reserve, things can and will come up!)

Let's face it, being an active landlord really stinks at times! And I imagine managing your own rehab is no piece of cake. I say there's no shame in buying turnkey.

I can buy twice as many properties in say Memphis or Indianapolis as I can for the same money in the Layton area. Again, it all depends on your personal preferences and strategy. I would say don't try everything at first; find a niche and get good at that. Then when you have pools of money you can dabble in other areas of REI.

@Zayne Ruth My two cents...yes, it's really hard to find deals in Northern Utah that work. Always buy for cash flow, not appreciation. Appreciation is nice but it's "gravy." If it a deal doesn't cash flow from day one, don't do it.

I have a couple SFH rentals in Utah and am happy to have them and will hold them for appreciation (and cash out refinances)--but they had to cash flow first. I doubt I'll buy any more in Davis County or SL County any time soon. I buy out of state now in better rental markets.

BUT if you're dying to buy locally, I think the best idea is one already mentioned above: Find a modest SFH with a walk-out basement and turn it into two units. (Or an existing MIL apartment. And/or also house hack it!) I would do that if I were willing to get my hands dirty and deal personally with rehabs. But I'm not. ;) Make sure to ensure city zoning will permit it though, as part of your due diligence.

It may not be quite as lucrative as BRRRR, but I absolutely favor finding an established turnkey company (with in-house property management) and making it easy and less risky to buy OOS. I believe in leveraging other people's systems and skills, not reinventing the wheel myself!

Hi Keedrick,
I'm not a wholesaler (just a regular buyer), but I've closed multiple loans with Kristin Colter at Real Advantage Title in Layton. They are able to offer a small military discount on title fees (about $150?), and they've always provided me with great service! Hope that helps.

Cheers,

Emily

Another contractor that my neighbors rave about in Davis County is the Walsh Factor - Chris Walsh. Basements, woodworking, and other renovations/handyman services. Google him or find him on Facebook.

I was very nervous about becoming a landlord, like most, but was so determined to take that first step and buy my first rental property. And it's not been nearly as bad as I thought it would be! :) I'm very glad I took the leap! I've had good relationships with my tenants. (I even give them movie tickets at Christmas.)

Having a nicer property helped, and screening carefully for good tenants has helped me avoid other problems. Also, my state (Utah) has a Good Landlord Program with landlording classes offered by the Utah Apartment Association, including a booklet that is filled with info specific to my state. I would recommend looking for a similar program in your area. Good luck!

P.S. Try to find a mentor/experienced landlord in your city who would be willing to answer your questions from time to time (but be willing to do something in return for them, so it's not a one-sided relationship).