All Forum Posts by: Joel Allen

@Nick C. gave some good advice about lenders that offer some version of purchasing the property cash and selling it back to you for financing and collecting a fee for doing so.

Look into AnnieMac Home Mortgage.  They have a ‘Cash2Keys’ program that serves this purpose and may suit your needs well…and they lend in Mississippi.

The link to the program info on their website is:

https://www.annie-mac.com/page...

@Kyle Crane

It sounds like you're agreeable to moving to another primary residence. So before jumping into a HELOC, I'd recommend determining if you have remaining VA loan entitlement. If so, you may be able to purchase another home (to serve as a new primary residence) using that remaining entitlement, and convert your existing home into a rental (as long as you've lived there for at least a year). That would enable you to keep the low interest rate (2.55%) on your current home, and utilize the VA loan again with no/low down payment for a new primary residence.

Your VA Loan Certificate of Eligibility (COE) is the definitive way to determine if you have remaining VA loan entitlement. You can either have a lender pull your COE, or you can retrieve it yourself from the VA eBenefits portal.

@Matt Sora

A loan with a balloon payment is one that requires a larger-than-normal final payment in order to pay the remaining balance in a lump sum.

There are a variety of ways these loans can be structured (e.g. interest-only, 5- or 7-year balloon, etc).  The borrower makes smaller monthly payments, but as a result the payments are not sufficient to pay off the entirety of the loan, so a balloon payment at the end is required.

In some cases the borrower elects to refinance or sell the asset prior to the balloon payment coming due in order to avoid/satisfy the large sum payment.

@Luke Hoffman

A few more to consider:

1. Marketing SOP - Where/when will you list the property for rent? Have a standard write-up/description of the property you can dust off each time. 

2. Periodic Inspection SOP - How often will you do periodic walk-throughs of the property with the tenant (quarterly? semi-annual?).  What checklist will you use for that periodic inspection?

3.  Late Payment / Eviction SOP - How will you handle late payment (or non-payment), and how will you handle eviction?  Make sure your SOP is in line with applicable laws for your state/city.

@David Acree

This isn’t a term I’ve seen often, but based on the context it appears to be “per annum”, which is Latin for ‘per year’.

So, the listing is telling you the potential rent amount is $50K or more each year.

@Jude Cineas

It’s good that you’re thinking and planning ahead.  A couple things you can be doing now:

1.  Develop a relationship with an investor-friendly real estate agent and start narrowing down the particular area(s) of the city you want to focus your search on.

2.  Start working with a recommended lender so you can get a sense of what you may qualify for.  You can have the lender pull your credit (or you can see your own credit report at annualcreditreport.com) to determine if there are ways to improve your credit score within the next year.

3.  Many investors prefer side-to-side duplexes (vs. top-bottom duplexes) to minimize problems with noise, etc.

@Josh Pope

There are a number of other variables that need to be factored into the equation.  A few right off the top:

- How much deferred maintenance/repairs are needed on the property?

- What type of area is the property located…e.g. is it B-class or D-class?

- Will you be hiring a property manager?  If so, plan on approx. 10% of the monthly rent going to the PM.

- Are there HOA fees that need to be factored in? Those won't be included in the mortgage payment.

@David Lu

It sounds like the company wants to rent your property as a short-term rental arbitrage.  It’s a strategy that has become more prevalent the past few years.  If you do an online search of ‘rental arbitrage’ you can find many articles discussing the pros and cons.

Before you decide to pursue the opportunity, ask the company for a list of the property owners they currently rent from, and call those property owners to gauge their experience with this particular company.

@Travis Mullenix

www.city-data.com provides a good initial/big-picture look at the demographics of a city, broken down by a variety of factors…income, education, overall crime stats, etc.

To dive deeper into the crime data, the police department for many cities maintain a website with call response metrics, crime maps, etc.  For example, here in San Antonio, the SAPD offers:

https://www.sanantonio.gov/SAP...

@Jonathan Oh

I’ve been fortunate to not have any evictions so far, although it’s a reality of being a landlord that I’m sure I’ll have to tackle at some point.

Due to the location and marketing of the homes, I typically have military families as renters.  That also provides me a couple avenues of recourse (communication with the chain of command, etc) to rectify the situation before we get to the point of eviction.