All Forum Posts by: Harry M.

Hey Sara,

One possibility: check that your insurance or property tax hasn't been overpaid. I'm in the GMAC/Ocwen boat also, and here's what happened for me. We decided to change insurance companies this year due to rates going up. However, by the time we informed Ocwen the bill for the old insurance had already gone out for the year. Ocwen writes to us, and says "sorry we can't pay the new insurance because we've already paid the old insurance". So we contacted the old insurance and got a refund, and paid the new insurance directly. Then a month or two later, we received a refund from the new insurance for the full years premium. This caused some confusion! It turns out that Ocwen went ahead paid the new insurance after all (in addition to the old insurance). No real harm in the end, other than sitting here wondering what the heck they are doing, though obviously our mortgage payment will go up some time soon to get the escrow caught up. Well, I assume it will, but with Ocwen you never know...

-Harry

Congratulations! This is fantastic news, and very deserved! It is very cool seeing the book do well, knowing how freely Josh and J Scott have given of their time over the years.

Welcome to BP, Brian! Starting out with a duplex or quad is a great way to go. My first was a duplex also. Good luck with your plans!

Congrats, Mark! This is exciting to hear (especially for me - I'm saving for #4 right now, so hearing about the successes of folks one or two laps ahead is particularly motivating just because it's that much more tangible). I think 97.5K purchase/1200-1300 rent is a nice sweet spot, and it's similar to what I've been aiming for.

Good luck with the rehab and leasing!

Hey Michael, working on the credit cards will definitely help. The percentage which I keep hearing being mentioned as a key number is 30% of your available balance. The good news is it only takes a few months of lower balances before your credit ticks up. Most banks want your credit to be 720+ to get the best interest rates, which seems achievable starting from 660-670 if you get your credit utilization below 30%.

Good luck!

-Harry

I'm open minded about it. People do make mistakes when they are young and stupid, and it's a shame that they are basically branded for life over something that may have happened a long time ago.

My take on it is that I'm ok as long as the jail time was a long time ago (10 years plus) and there's no evidence of more recent problems.

Great suggestion, Kevin! We started doing this not long ago, and it is a nice money saver.

It's definitely do-able even with a demanding day job. For the most part, I'll squeeze in phone calls and such over lunch break or early before I leave for work. I agree with John about searching for a new property - that's definitely a bit harder. I have some flexibility at work, so I'd leave work at 4:00 to go view properties, and then come back at 6:30 or 7:00 and work a couple of hours in the evening to get caught up.

It does get easier once you can show two years of rental income on your tax returns. At that point, the additional mortgage payment (provided you have positive cash flow), essentially gets wiped out from your DTI ratio. For example, suppose that starting out a hypothetical investor has 6K/month from their W2 job, and has 1000/month in commitments. So their DTI looks like 1000/6000 = 16.7%. Lets say he buys a property, and after two years he is showing 200/month of positive cash flow. DTI is then calculated as 1000/6200 = 16.1%. In calculating DTI, they don't add the total amounts to both the numerator and denominator - if there is positive cash flow, then just the cash flow is added to the denominator, if negative, then only the shortfall is added to the numerator.

Hope this helps!

-Harry

Hey John,

The seller asking for curb offers only is standard if the property is tenant occupied. If one or both the units are vacant, then there's no reason they shouldn't let you inside. If the former, I wouldn't worry about it, but make sure that your offer either includes an inspection contingency or a general purpose option period during which you can back out for minimal cost should you find surprises.