All Forum Posts by: Forrest B.

Does anyone have experience with mobile homes in the Tampa area? I'd be interested in hearing your opinion, and/or setting up an offline discussion.

Jared,

Welcome aboard! It seems like you have a good possibility. I'd look to answer the following questions:

1. Rent estimate $870--is that based on current rent, or what you think you can get by renting to new people?

2. Would you be able to pick it up for $45K. That's an assumption I picked up from reading your post, but I'd look to solidify that. If so, would he be willing to finance it for you?

3. Tenants. Are they good tenants? How long will they stay in the house? Have they been trashing the place or helping to keep it up? When does the lease expire? You might not need to touch the kitchen for a while if they intend to stay, or you might find out that you have a whole slew of stuff to fix.

4. Vacancy. One of the highest cost factors. Say you increase rents by $50 per month, because it's under rented. If your current rent is $820 (vice the $870 you think you can get), then one month's vacancy will wipe out over a year's worth of the rent increase. If you can keep them longer, you may very well find that it's worth keeping them in the house & avoiding vacancy.

Depending on the answers, this may be a great deal, or it may be a LOT of work, for limited upside. For example, if they're great tenants who don't need any improvements, and you can get seller financing, you might pull the trigger, rent for cash flow & equity buildup & hold. If he wants more, & they don't plan to stay longer, then you may need to figure out some more variables (improvement costs, rental & sales comps, etc.).

Hope this helps!

Forrest

what would happen if you bought 'subject to'? Just assuming the loan and putting a nominal (if any) amount of money down?

Apology--250k for a single person, 500k for a married couple...not sure of your marital status.

Have you thought of buying a duplex and renting out half? You can sell it later on (after two years) and not pay any capital gains tax for the half you lived in (up to 250k), as a primary residence tax exclusion. Also, many people find that their tenants end up paying most of their mortgage.

Forrest

Wes,

Not sure where this property is, but having just bought a house in Tampa, and noticing when you posted this, it might be worth reevaluating. Will PM to discuss in more depth.

Forrest

Does anyone have a reputable roofing contractor to recommend in Tampa? I've got a house in Westchase that needs a roof replacement.

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Peter,

I'm in the Navy as well, though I've been stationed on the East Coast most of my career. I've heard and known a lot of people go underwater on their houses in San Diego. I don't know the current market, but unless it's profitable on a cash flow basis, you probably don't want it.

Even if you can't get into base housing, it might be better to just rent and save your money, then focus on buying into your local New York market. You can go a lot further in Central New York with your resources than in San Diego.

Forrest

Troy,

I'm in the military as well, and have a rental (bought as primary about 12 years ago) in Norfolk. Since we bought as our primary residence, the income doesn't meet the 2% rule, nor the 50% rule.

In fact, I refinanced the principal mortgage to a 20 year just to realize extra equity in the case I sell it in 3-5 years--cash flow isn't the priority for me here. If I don't sell, it'll get paid off faster. The tradeoff is ~$250 per month, which I could attribute to 'forced savings,' similar to what you're discussing with the $100 per month out of pocket.

So ask yourself, "what if?" What if that loan balance was amortized over 30 years? The difference between that 30-year PITI and your proposed PITI would be your 'forced savings.' The 50% rule would look a lot different because your loan is amortized over 20 more years.

With that said, your 'forced savings' isn't the only key factor here. That should only serve to help you frame your comfort level...if you'd rather put $100, $200, or $500 away towards this portfolio instead of an IRA or TSP, that makes sense.

However, you definitely need to do the research & make sure your numbers are solid, and that you've got cash reserves (or access to a line of credit) to tap into. Know the properties up front, major repairs/replacements that need to be made, warranties on recent repairs/replacements, expenses, leases (are they all ending within a month or two of each other--what happens if you have two or three vacancies at a time).

With seller financing, you should be able to negotiate your first year (or two) of payments based upon rental income after expenses. If the properties are solid, the seller should be willing to give this to you, knowing their rents & expenses are in line. If not, I'd be very skeptical & see what potential problems you're about to take over (deferred maintenance, lease expiration, evictions, etc.). Don't underestimate your expenses just because you're okay with putting some money out of pocket on the PITI side.

Assuming the deal works, after you've established a record of payments, you should be able to refinance at least some (if not all) of the properties to get your PITI down.

Hope this helps.
Forrest

I just saw a post by @joy gendusa, mentioning a local Tampa company named "Market Tampa." There isn't a lot of information on their website, but I wanted to see if anyone on BP has had experience with them. Good, bad, ugly or indifferent--I'd like to hear it.

Forrest