All Forum Posts by: Jim D.

Rent the apartment at market rate as if you were any other tenant. And then you still pay your 25% share of ownership costs, and take 25% of the profits. It's the only way to do it that treats everyone fairly.

I think I represent the opposite end of the spectrum--my wife was all-in as soon as we started talking about it. She went through moving several times as we house hacked together to help build the portfolio. She has some uncles who got very wealthy through REI, so it didn't take much convincing. Another benefit is that when we buy a property, we put the loan and title either in my name or hers (never shared). This way we can each get 10 conventional loans, rather than 10 total.

Sorry, couldn't resist. That SUCKS you have to get a permit to trim a freaking tree there!

You have to choose from a list of approved Baptists? Man, Florida is more religious than I thought. Maybe try the local Branch Davidians instead.

Yea that's a tough one to bring up in casual conversation. How about, "So I was scrubbing the floor under my stove the other day and found $100!"

Take tons of photos at every step. As for whether or not to involve insurance, it all depends on how bad the damage is. You'll be paying the first $500 or $1000 anyway (whatever your deductible is), so you'll only need insurance if there's significant damage. Gotta love those "acts of god"... and on a Sunday!

I had a similar situation where it was just bad luck and the poor tenants had to go through one thing after another. Flooded basement, AC went out on 100 degree week when their baby was born, dishwasher issues... I agree with the posters above that a $50 gesture will go a long way to let them know you're looking out for them. Good investment if you want to keep them.

Originally posted by @Jon Lee:

@Jim D....Amen brutha (and I'm not religious)!!!!  Treat the private money lenders capital like it's your own (even better).  Pay often and early!  

All the private money in the world is out there for you to acquire as much real estate and you want!  Feel free to start working with portfolio lenders for your buy & hold properties (if the numbers make sense) to get use to financing your properties....over time the switch over to private money will be easy with your experience and a proven track record.

You know, that gives me a little different perspective on this. I guess I already have been investing other people's money, just in the form of conventional mortgages. Realizing that does make it less intimidating.

If it's a $125,000 purchase and you're using an FHA 3.5% down loan, the down payment would be $43,75, and interest rate around 4% or so. I think you'd be much better off saving up that small down payment first, and avoid the higher interest rate with the state assistance program.

I started renting to responsible students a few years ago, and I'll never switch back to anything else. They create far less wear and tear than kids or pets will. Mine never have trouble paying the rent, as $550 is much easier for a person than if they're providing for a whole family and shouldering $1500 on their own. I think you can make this work well by doing three things:

1. It seems odd to include electric/gas/wifi/cable... I would definitely put those into the tenants responsibility. (A lot of young people don't even use cable anymore, they just use the internet.) We'll say that saves you $150/month.

2. If your city rental rules allow for 4 unrelated renters in a house, you'll almost definitely make more with students by using the large room as a shared room. Check the local rent comps, but you might get around $350 per person for the shared room, giving you an extra $150.

3. If you refinance the house on a new 30-year note, it will reduce your monthly payment by about $100 (assuming you still get a 5% rate).

I just ballparked those numbers, but if those three things work out in that range, that would give you cashflow of close to $600 per month before repair and capex costs (I'd put aside around $300 per month for those). 

It won't be a huge monthly cash flow generator, but if you want to hold on to the property for long term appreciation and mortgage pay down, I think you can make this a pretty good rental hold.