All Forum Posts by: Jeremy D.

Actually this is good timing to reflect on the year since i'm just wrapping up 2013 tax prep. The self managed properties were at 38% operating expenses. That includes some big repairs due to a tenant who I had to evict and she trashed the house. Excluding this I was at about 35% for the self managed group.

The non self managed group was at about 49% also including some big repair items.

Your 31% might be light, but it seems reasonable. My property taxes total about 12% of revenue- I'm sure this could vary significantly by where your property is located.

I'm in the same situation as you, I have 34 units, self manage some of them, and run about 40-45% operating expenses. It definitely varies by locality. 31% self managed seems reasonable.

I started using propertyware a while ago- I signed up for their free trial on line, now pay $75/mo for the service. At no point was there a required training that i had to pay for. Maybe just skip going through the rep and sign up for the free trial through their website, then give you CC information and start paying $75/mo after your trial runs out.

I watch my regional MLS, www.auction.com and www.hudhomestore.com . Which websites do you watch to find new properties?

Hello,

I'm thinking about bidding on an auction.com property. The transaction details on the auction.com page for the property says:

"Buyer may receive a Special Warranty Deed or equivalent if Buyer is able to purchase title insurance without delaying the closing (title fees typically cost between $500 and $1500 and are based on the purchase price of the property). If buyer does not purchase title insurance, buyer will receive a Quitclaim Deed or equivalent, with no express or implied warranties of title."

Has anyone purchased a property through auction.com with this clause before? I'll pay for title insurance at close, but if a title issue is found I want to negotiate with the seller. Does the above disclosure mean that they will not guarantee a good title if I go ahead and pay for title insurance and the title company finds an issue?

Well the LOC will be used for the entire portfolio's cash reserves (not just one property), so the entire portfolio's positive cash flow will pay down the LOC to replenish the reserve after using it for a downpayment.

Thanks for discussing this, i appreciate the feedback!

@Bill Gulley so let's say you had a $100k house sold with seller financing. 10% down, 15 yr note at 7%, 7 yr balloon. Are you saying some sellers would also charge origination and processing fees as "closing costs"?

I'll use the LOC to fund downpayments on new purchases. Then focus all monthly positive cash flow on paying off the LOC (replenishing the reserve).

The zero balance LOC will be the only debt on this property so it's 100% equity.

The risk of my lender calling the LOC is pretty low due to our relationship and the other products I have with them.

Seems like the LOC is the way to go..

How do you qualify buyers when you offer a seller carry back note as part of the sale? Do you have credit score, income, asset, etc. requirements?

Hi everyone,

I'm in the process of refinancing a mortgage and would like to hear your opinions on these two options.

For illustration purposes let's say the mortgage balance is $30k and I'm going to refinance it into either a LOC at 6.25% or a 15 yr note at 5.5%. I am leaning towards the LOC because I can set that up as a sweep connected to my checking account. I like to keep about $30k in the checking as a reserve. If I refi as a LOC then I'll pay off the $30k immediately and keep $0 in my checking account...but use the LOC as a reserve by utilizing the sweep. The alternative is to refi into a 15 yr note and still maintain $30k in cash reserves. But I see that reserve balance as costing me 5.5% per year which is the rate on the note.

So I guess in summary there are two options:

Option 1

Maintain a $0 cash reserve and have $30k available in an LOC for reserves at 6.25% when i need to draw on it.

Option 2

Maintain a $30k cash reserve and be paying on a $30k 15 yr mortgage at 5.5%.

Option 1 will cost $0 in interest in year 1 and option 2 will cost about $1,600 in interest

Thoughts?