All Forum Posts by: Account Closed

Trade the options market. High volatility is a good thing $$$

You can get as creative with your contract as you want. Put the terms that you want in it and have a local attorney review it.

Have you considered allowing the tenant to build a storage shed for this use? Maybe have have the stipulation that the improvement stays with the property? An improvement to the property and higher rent could sound enticing.

Lots of light! I think it's probably one of the most important/ overlooked items in a rental. This is especially important in a basement that already is limited on lighting. I use as many recessed wafer type LEDs as I can and install a dimmer so they can turn it down if its too bright for them. Make sure the dimmer is compatible with the lights or it may go wonky. Super easy to install yourself, and not too expensive.

What type of tenant do you want? Think about the tenant the wants to live in a dark below ground unit. If you forgo the light, that's the type of tenant you'll get. That said, I lived in a semi basement unit for a couple of years. But, I wouldn't have moved in if it didn't have good lighting to make up for it. Landlord installed lots of recessed LEDs.

Also, do some research on light color spectrum (generally 2700-5000k) for different types of rooms (kitchen vs. bedroom, etc). You'd be surprised at the difference it makes. Ok, I'll step off my lighting soapbox now...

I've never been to Hawaii before. This sounds like a good excuse. See y'all there!

I know a few investors in that area. Some have issues, others don't. Tenant screening is the key as always. Construction shouldn't be an issue. Cash flows can be higher in the area due to purchase price being lower. But, it sounds like you already realize it's not a B class area. Just keep that in mind when deciding if you want to live there. Let me know if I can help.

Thanks for sharing this. Very helpful tip.

As investors, when assessing new markets to invest in, we often hear we should look to population migration patterns as a metric. These numbers can show a pattern in a certain year or number of years. However, is this really a reliable indicator of continued migration to or from that market?

Compare this pattern of thinking to the stock market: "The market is going up, so its only going to continue going up, right?" How do we know when that market is saturated and can no longer sustain growth? Surely, at some point the market will come back to equilibrium.

Will people migrate back to locations that saw a net migration outflow? Prices and rents in areas that have seen an outflow likely have gone down. In an economic downturn people turn to spending less. Should we potentially be looking into these markets as well?

@Devang Patel

Hey Devang, do a search on this. I believe there have been a few posts about this subject. There was a post yesterday on land trusts in some states, unfortunately NJ doesn't allow them. 

I'm not an attorney and this is not advice, consult your own. However, you have to look at the situation from the mortgage company or the servicer's perspective. Why would they want to create bad debt (calling your note) when they are still receiving payments even if it's not from the original borrower (you), but rather your new entity. The argument could be made that if the current interest rates are higher than the rate on your note that it would be beneficial for them to call it and make another loan on the property at a higher rate. But this is a hassle. Another thing to look into is that interest rates don't just go up over night. If these companies have been accepting payments from someone other than the original borrower (you) vs. your entity for an extended period of time, some form of a statute of limitations might exist preventing them from calling the note. I'm not sure on this part, maybe someone will correct me. The fact of the matter, however, is that banks are not in the business of owning properties, and don't want to. You'll have to decide what's more important, having asset protection or having 100% assurance that your note won't get called.

Short answer: consult your attorney.

@Georgia H.

That's a while for it to be on the market. Have you gone to look at it yet? Are you looking to flip or wholesale?

@Anthony Johnson

Tony, if you had to do it over again would you have just bought them under an LLC? Would you recommend this for a beginning investor?

Anyone know if there are restrictions on buying under LLCs when using FHA, VA? I have VA eligibility and wonder how they would feel about this.