All Forum Posts by: Jeff Ronningen

@Andy Nguyen. If you had $300K cash, would you invest it in an out of state SFR for $600K which doesn't cash flow?

@Greg Dickerson. I think you meant “aren’t cheap” about outer banks NC

@Terrance Miller. Welcome to BP and REI. Start radically reducing spending and save, save, save. Clean up any credit issues. Talk to lenders and see what you need to do to qualify to purchase an owner-occupied multifamily with up to 4 units and low (5% or less) down payment. Work backwards from the end goal, fill in the steps, and work the plan.

Thank you for your service and thank you for the work you do to help people in need. Your profession is rewarded by seeing the lives you've changed, not so much by your W2. But REI can allow to keep doing the work you do AND work toward financial independence. Wishing you success.

@Nathan Norway. Good post. Not sure what amortization term you used, it should be 25 years or less. Not sure if you factored principle reduction from loan payment. Utilities are a huge factor. If tenants pay heat and/or water it’s swings the numbers. My portfolio is more in the 1.3-1.4% range, all multifamilies except one, most with boilers for heat and window AC units. It’s becoming more common in this area to have a utility surcharge.

@Ola Dantis. It makes sense. I think young people are more likely to take risks, either because they’re naive or they figure they have time to bounce back if things crash and burn.

@Anita Parsa. Sellers sell for all kinds of reasons, some of which may make sense to you and some not. You shouldn’t base your decision on whether seller’s motivation passes your smell test.

I suspect there’s something else at play. You’re worried the seller knows something you don’t, and they might get over on you. Yes, they do. Yes, you’ll find out something bad after you buy. Do your due diligence, make sure your numbers are sound. Then make the jump.

@Joe Splitrock. You raise a good point. Many times I see a multi family listing which advertises “room to raise rents” or “rents below market” as if this makes the property more attractive. Of course they want a sales price based on market rents. Have cake, eat too.

@Tyler Rowland. If I allow a tenant to rent at $100 below market rent I’m essentially giving away $100 from my family, from my household, to a stranger. Nothing wrong with that if you consciously decide to provide charity, just putting it in perspective. Perhaps the person who asked you the question would be willing to give the $100 instead, after all it’s really not much different. Would that person feel guilty if they didn’t give the tenant $100/month to effectively reduce their rent? In fact perhaps you could offer this person a proposition, you will refrain from the $100 rent increase if this person will subsidize a tenant by $100/month. Wouldn’t it be wonderful if this person, by calling out perceived injustice, can benefit not one renter but two?

Oh but of course we know the likely answer. For the lowly landlord is to be looked down upon and reviled for daring to derive income in exchange for providing safe shelter. After all, is shelter that important? It ranks behind food and clothing, it’s merely number 3.

And what of the doctor, he or she of the large home and expensive car? Does not the landlord provide a service similar in importance? And how often do we hear the doctor spoken about with terms of contempt and judgement? Or is that treatment reserved solely for the greedy, heartless landlord?

Friends, do not allow such foolishness to go unchallenged. Stand up and defend our profession!

@Payton Reid. Dave Ramsey would be proud. The answer is.......it depends.

@Colin Courtney. I went to the bank where I have my personal and business checking accounts. It's easier to move funds around and make payments. It's also a form of "bundling", the more business you do with one provider the more favorable the terms should be. Other lenders may provide you financial incentives to open checking or other accounts with your HELOC, so if your current bank doesn't have a good HELOC offer they may lose more than just your HELOC business. Tell this to the bank manager or relationship manager, they'll be motivated to work the system for you. At least start with them and you'll have a good offer to compare against alternatives. In my case the lender did a drive by appraisal so the effort you invest to fix things up to get the biggest loan may not be fruitful.