All Forum Posts by: James H.

So what was the right answer?

I used to be completely opposed to the idea of owning half a duplex. Now, I would consider it if money was right. As far as the common wall, this is a, well, common living arrangement. Insurance? No doubt there is a solution given how many duplexes exist with different owners per side. Maintenance and appearance of the neighbor's unit? Really no different than an SFH with a zero lot line and still not much different from any urban neighbor with poor upkeep. I don't own one now and it is not my preferred choice, but I would certainly consider it. I would probably only consider a good cash flowing deal in a mid to upscale area where there were many owner occupants.

Funny, every pre-paid visa card have ever received as a gift allowed me to withdraw cash....

Not arguing that it is the best way - just a way. I have no idea what the seller is trying to do. Maybe he/she can chime in?

I seems like you could handle that through the title company.

Maybe a pre-paid visa debit card? Or several of them?

USAA updates their rates daily and posts on their website.

Here is a link if it is allowed:

This all depends on how much income you make and how much cash you have in reserves.

I would never take out debt against real estate for anything besides real estate. My guess is that your car loan is probably at a super low interest rate and if that is what you want to drive, and if it would sell for a loss anyways, just leave it alone. However, if the car note effects your DTI ratio so that you can't get an additional mortgage, then you need to consider doing something about it. A 39K car loan would blow my DTI out of the water, because I don't have enough income to support it. You might.

I would never take out debt on my home to pay off a credit card either. Rather, I would just work hard to pay it off as quick as possible.

Also, consider that if you take out a home equity loan, you can't use borrowed funds for a down payment on a new house. That means that cash from the home equity loan will have to "season" in your bank account for at least 6 months before the bank lets you use it for DP and/or closing costs.

Also, back to the DTI ratio, that home equity loan will count against your DTI ratio. So make sure you have your ratios figured out. Different banks have different overlays and most are more strict than the government minimums, although not all. Bottom line: have your financing plan figured out from beginning to end, including how each decision effects the entire process.

The little house in the small town doesn't appear to do much for you at $25 a month. I would consider selling it to use that money on a new property that has at least $100/month cash flow (based on 50% rule analysis). You could also use the extra money to pay off your credit card and then use the leftover money to reinvest. Selling that house would also free you of a mortgage so you could get more mortgages.

My gut tells me that if you are having a hard time paying back the 4K line of credit and the 9K credit card, your income might have a fair amount of strain on it and you are not quite flush enough to get into a new deal comfortably. That might be why you are afraid to make a move.

If possible, I would skip the temporary service and have a new service installed as the very first item and then just use temporary leads from that until I was ready to start roughing in the rest of the electric. There might be some minor things that need to be done to prepare for the new service for which a small generator would likely be cheaper than a temporary service (and useful elsewhere).

The 50 percent "rule" has been the single most useful advice for me.

@Jon Klaus

That is what I was thinking. When I evaluate a low income SFH, I find the 50 percent rule works pretty good at identifying deals worth pursuing or not. I suppose in the long, long run, the garage apartment would fall into the 50 percent category, but considering new, high quality and closely monitored construction, I don't expect hardly any maintenance for nearly 10 years. It will be self managed unless I were to move and rent the entire property. That means tenant selection will also be carefully executed - especially since the tenant would be my neighbor.

How are you accounting for the reduction in expenses on your loft project?

Thanks for the heads up Roy.

Let me clarify that I am not seeking construction advice. I am looking for input on the financial aspects.

Thanks