All Forum Posts by: Erik Schubert

I want to make another move, but I'm nervous about mortgaging myself too much, then come the day I want a house of my own, I can't get one. I have one 30 yr mortgage on my plate right now.

I can live in my rental for a few more years, but I'm getting tired of being in an apartment, and being around my tenants.

What should my next move/plan? How have others stepped into this? I don't believe I really care how I get financed, as long as I can get as low of a down payment as possible (at least on an investment) and a decent rate.

My mortgage broker made it seem like he could get me into a single family house, with a loan similar to a 203K, but with out the feds involved. I wouldn't mind that route, fix it up and sell in a year or two, but I feel a multi is a wiser investment for me right now.

I can say the following for CT-

Moving walls would require a permit and inspection. 

If there are any MEP services in the wall and the building is more than 2 residences, it would also require an appropriately licensed contractor. 

Carpentry can be performed by an unlicensed person.

Some people are freaked out by pulling permits and inspections. And many have good reason as not all inspectors are "nice and friendly"

Keep in mind

        An inspector is there to make sure all work meets minimum code requirements. This isn't a bad thing. 

        A good inspector will only focus on the task the permit was pulled for and nothing else.

        If no permit is pulled, and if something were to happen down that required an insurance claim, the insurance company will be quick to deny claims and you can get stuck on your own. If something happens elsewhere, seemingly irrelevant to your renovation, you still altered a "system" in the building. If they find this out they can battle claims. 

Even if the inspector is a "bleep", it's much better to pay a little extra for the project now, then to be stuck with a major crisis down the road. 

My personal opinion is to just play by the rules. Especially in an investment/rental property where other peoples well being are on the line. 

The town should be there to help, not hinder. I also feel building a relationship with your local code enforment teams will only help down the road. Espicially if you plan on owning/renovating more properties. 

@Peter MacKercher 

I tend to agree that I should drop a line before new years. I do however need to figure out if and how I can come up with some money before I push too hard.

I did not get any numbers.

I'm not too concerned with what it will rent for and actually I am confident that the property will bring $2200/month, with the potential for more depending on updates.  I pay fairly close attention to the area as I currently have a 3 family only a few blocks away. 

On my follow up call I will push harder for some numbers.

@John Mitchell 

Analysis Paralysis was one of my favorite podcast to listen to so far.

I second everything you stated above.

Here's to people like you, encouraging people like me.

Thanks for the advice @Owen Dashner @Peter MacKercher 

I spoke with the owner, it was hard to get any words in. @Peter MacKercher  , you nailed it when you stated "Remember, the seller is probably even more nervous than you are, so don't sweat it too much."

No numbers were given, only the history of the house and why it stands as is now.

However, most of the questions you listed, were answered with out any input from me.

The house has been in the family for a very long time. It became obvious that they are reluctant to sell it due to emotional attachments.

It was rented successfully for years when the family was there, occupying at least one floor. As soon as the last family member left, it all went down hill.

So it was left that neither of us are in a hurry, even though I really am if the price is right. I watched my father loose a great deal because "no one was in a hurry". Its a different story when someone walks in with a cash offer. 

She will talk to the other owner and let me know what they think for a price.  I offered to talk about anything from a straight purchase, to management of the property and open to any other discussion.

So I'm thinking I follow up shortly after the new year as the discussions with the other owner will not happen until then.

It seems they have some figuring out to do with the family right now.

As I'm writing, I realize I was actually a little discouraged to be dealing with so much emotion. Probably one of the benefits of working through an agent.

I received a lead on a 3 family residence. It is for sale but not on the market.

The owner and I are slated to talk, in about a half hour form now. 7:45 eastern time.

I do not have any experience approaching this type of situation. What kind of questions should I be asking?

I am specifically looking for advise on what to talk about with the owner. This is the first communication.

The facts

I've walked the grounds. All seems ok. Not bad or great, just ok.

The owner is an absentee landlord

They were not successful in having the property managed by others

All the tenants were evicted or moved out three months ago.

@Andrea Jones

 I do not have any hard evidence, but I would think the only way for liquids to get to the sub floor when using vinal planks is if they made it to a corner or an area where then floor meets the walls. 

Vinal planks overlap each other with a fairly strong adhesive creating what I imagine to be a water tight seal. But they are a floating floor so the edges are not sealed from the sub floor. 

I will agree to vinal planks, I've done 5 rooms with Alure brand. It goes down fast with typical hand tools and is very durable.

I paid under $2.00 a square foot from Home Depot. 

Mike,

I get the impression that a strong flip in our area should be geared towards a first time buyer/small family situation. Would you agree? 

Contragulations on your success. 

Alberto,

I got into my first endeavor with a FHA 203k loan. It gave me an extremely low down payment, 3% or so, and my interest rate is just under 4%. I also got 30k to rennovate the house which needed a good facelift.

A downfall to a low down payment is paying MIP on a monthly basis, in my case a couple hundred bucks. But my numbers were good, and they still are good. Actually they are great and will only get better. Another downfall is many FHA loans require you to to "make the property your primary residence" for a period of time.

I personally am a big believer in using as little of your money as possible when investing, especially for a long term investment property that you will pay on, more appropriately your tenants will pay, for 15-30 years.

I can't offer any advice on the 2nd property. I'm just about to start that endeavor myself. But I can say one year was not enough for me, and I think it will be 2-3 years before I close on my 2nd property.