All Forum Posts by: Glen Wiley

Sounds like you are in a great position financially, congrats on choosing real estate!

A few things I'd keep in mind:

1. The power of leverage is the largest part of wealth building in real estate. You earn appreciation based on the market value of the property, not your equity. At 75% LTV you are making 4x as much as you would by owning the property without a mortgage.

2. Interest rates for primary residence are typically about 1 percentage point lower than conforming investor loans so if you can buy a new primary residence and rent you current one out you will save a lot of money on interest payments.

3. Re-read #1 - consider a cash out refinance on that primary then use that cash to buy more real estate.

Many of our properties are now in "infinite return" on our investment because we refinanced to pull our original investment out so we are making cash flow and appreciation but actually have $0 invested in the houses.

I did the 1-2 houses per year for quite a few years, sold some to reallocate investments at times and found that was about the maximum pace I could handle while working my W2. I encourage you to work on that plan - it will deliver results long term that you will be very happy with.

Operating without insurance is a pretty big risk, not something I would do, especially if I am going to have a bunch of people on the property.

Either find a different insurer or ditch the jacuzzi.

One of the biggest factors in an eviction timeline that I have seen is the landlord not being on top of each step and taking action as each date hits. 

Quote from @Cindy Joseph:

Quote from @Glen Wiley:

If you have an insurance claim with renters in the property and a homeowner policy I would expect the claim to be denied.

The benefit of landlord insurance is that it will actually cover you, if you try to rent a house out with a typical homeowner policy you are simply not covered (even though you are paying premiums).

Insurance is not where you want to go lowest bidder or look to cut corners - it is there to save your behind in the event of a major incident.

Thank you! Would I need regular home owners insurance and land lords insurance for the rental side of the duplex, or just land lords insurance? 

You will want homeowners for your side, landlords insurance for the other.

One advantage of landlords insurance is that the rates tend to be lower than homeowners rates because you do not insure the contents of the home. The renters get insurance to cover their belongings.

Interesting opportunity. Don't let the problems stop you - find a way to make it work.

You never know where things like this can lead, an openness to trying things like this and not being ruled by fear is key to long term success.

I would not refund. The fact that you were able to recover and rebook isn't relevant.

I haven't seen this lately but be careful and read the terms - there are often terms in the mortgage that preclude using the second home as an income property or limit the number of days you can be paid rent on it. Violating the terms of a mortgage is mortgage fraud and can be a real pain if it becomes an issue.

Newer homes are not always the "safest" - you'd be surprised at some of the high cost repairs that even new homes run into.

I don't have an age limit on homes I would operate - many of mine were built in the 1950s and are great structures! They have had windows replaced, electric upgrades and other nifty fixes done by previous owners.

The older homes often have much nicer yards and are often really strongly built.

I have a house with a window in the shower, we have vinyl blinds over it and the tenants are fine with it. Cost: $30.

If you have an insurance claim with renters in the property and a homeowner policy I would expect the claim to be denied.

The benefit of landlord insurance is that it will actually cover you, if you try to rent a house out with a typical homeowner policy you are simply not covered (even though you are paying premiums).

Insurance is not where you want to go lowest bidder or look to cut corners - it is there to save your behind in the event of a major incident.