All Forum Posts by: John Alosio

@Jason Ruello

This certainly worked out in my situation. There are too many variables for me to say you should definitely do the same. I had some questionable systems in the house and I was glad to have it.

After a seller accepts your offer, that's when negotiations begin. If they are unwilling to budge at all, then a warranty is just another tool in your belt to try to eek out a little more. 

Either way, I'd tell your realtor up-front that you'd like to purchase a home warranty through closing. That way you get the introductory discount. Then during negotiations try to work it into the seller concessions so they cover the cost. It should be something like $600-$900 for the first year depending on the level of coverage you choose. Even though i paid for it on my second property, it felt like a drop of water in a sea of numbers on a closing document. Maybe that's a bad way to look at it from an investor standpoint. But as I said, it worked for me.

Good luck

Welcome to BP @Jason Ruello

To answer your question on Home Warranties, they can be very useful in the correct circumstance. if you have a lot of older systems in the house, definitely consider it a ticking time bomb.

i believe most companies have a special offer for lower cost for the first year if the contract begins as part of a real estate transaction. Though anyone may choose to start up a policy at any time. You'll just get a better deal if going through a realtor.

How it works:

-Start a policy with a set $ amount per service request

-When a covered item/system fails, contact the warranty company. You pay them the service fee and they will connect you with a local specialist that will fix whatever is broken (as long as its covered under the contract)

-If the repair involves work not covered by your policy, then you will have to pay out of pocket directly to the contractor for extra.

For me, as a first time home buyer of a duplex house hack, the seller offered a free home warranty as an incentive when purchasing the home. I was thrilled to have everything covered incase of a catastrophe. I learned very quickly the limitations of my warranty contract. Each contract is different. So be sure to do your du diligence and read it over fully so you understand what is/is not covered. In my case, they covered the cost of certain equipment/systems if they fail. however the existing equipment is all that is covered - instillation &"modifications" and Upgrades were out of pocket. There was ALWAYS extras...

Just don't count on them to respond quickly to an emergency. Furnace goes out Mid winter? Don't call the warranty guys. it'll take forever(in my experience). As a landlord, I'd much rather get it fixed ASAP rather than save a couple bucks waiting for my warranty company who may have to charge more anyway when they figure out the problem.

My takeaway: It was a good thing to have as a first time homeowner in a new area. When I had limited home repair knowledge and no connections for local contractors. So it was a nice transition from renter to Owner. I collected some contacts, asked a lot of questions, watched a lot of youtube. Now I'm ready to dump the Home Warranty and spread my wings.

Hope this helps!

I once tried asking my magic 8-ball how my local housing market would look next week. My 8-ball exploded.

Thankyou.
@Kenneth Garrett

Are you saying that i need to have an LLC in order to get a business credit card?

Both of my rental properties are financed in my personal name.

I assume that means I need to start up an LLC then quitclaim into said LLC before I can begin building my business credit?

Thanks again for your time.

Hello all.

I was recently denied for a business credit card because my business has no credit history. I have been in business as a sole proprietor for 3 years. I was under the impression that they would take my personal credit score into account (760). Am I missing something? Is this a common situation? 

Thanks!

Hello BP,

I have an odd question I wanted to see if anyone has experienced. I tried searching through the forums, but found no info on my specific situation.

I have a Live-in duplex house-hack that I purchased in March 2020. The intent is a live-in flip.

My tenant in the other half may be interested in purchasing from me through a lease-option. 

I intend to make it to the 2-year mark to avoid capitol gains.

So my question is: Can i enter into a lease option while still living in the house myself?

Do i maintain "ownership" during the lease option to satisfy the capitol gains exemption.

Say I initiated the lease option at year 1. continued living there for the next year unit i reached my 2 years, move out and rent my old unit. Who collects the rent for the 2nd unit? How could i structure this to make sense?

Thanks in advance for your time.

@Zack Karp duly noted.

@Jean Rodriguez

FHA loans allow you to put 3.5% down payment on an Owner occupied property. You Must live there for 1 year minimum. This is the best strategy for low money down. Unless you are a vet, then look into VA loans.

It is true that PMI/MIP (mortgage insurance) is a huge burden looking at numbers before you get started. Thinking about shoveling a wad of cash down the drain every month seems counter productive to a prospective investor. But the reality is, A lender is agreeing to hand over hundreds of thousands of dollars. and all they ask is 10-20% down payment to assure that you are worthy of their generous offer. if you are unable to cover that much cash, you're in luck! The government offers a program to assist the average American to move up in the world. Buy your own house. Its an exciting goal. But as an investor, this is the first step in the process to creating your portfolio.

if this is the only option you have to get started, jump on it. pay the dues. 
Its way easier to make those extra payments with somebody else's money(rent).

PMI sticks with your mortgage for the entire life of the loan - Until you reach 20% equity & Refinance.

For my first house, i only paid PMI for 2 years. i bought with FHA 3.5% down. House hacked, added value (repairs Renovations) over the course of 2 years, refinanced out into a traditional mortgage. my house reappraised with 30% equity. Goodby PMI. Hello Sweet equity.

Happy Hacking!

Thank you all for the advice. I've been listening to the BP podcast religiously for the past few months and I'm kicking myself for glossing over the segments about complexes. I figured I'm not there yet, no need to waste my brain space on this information. I recall only bits and pieces of relevant info.
Well I'm there now. I can do this. I can try at least. Probably do it poorly. But it's worth a shot.
thanks again for your support :)

Hello BP community I am in a situation that I am looking for some advice on. A little background to start: I bought my first investment property 3 years ago. I currently hold 2 cash flowing duplexes. I am looking to scale the business in some way leveraging OPM. So I began my search for Private Money. In hopes of getting a hard money lender, or some private equity investors to trust me with a few dollars.. I recently approached an experienced RE investor (friend of a friend) asking for some guidance. He has been quite helpful with some minor issues. A few brief conversations, mostly giving some choice words of encouragement. Which surprisingly made a world of difference coming from someone who has been investing for as long as I’ve been alive. I brought up the idea of working together in some fashion. And I got a long period of silence. He replied “Find me an apartment complex” I’ve been set to a task that is largely beyond my realm of understanding. Having dealt with small dice so far; 2-family homes seem vastly different from a 40-plex. I know that MLS is easy for anyone to browse smaller residential. I understand the concept of how to pursue Off-market deals: Driving for dollars, yellow letters etc. But how does that translate into Large scale multis? Is loop.net similar to the MLS where deals are hard to come by? Is there such a thing as driving for dollars in the apartment complex world? Do I start calling a random building’s property management, asking to talk to the owner? I’m asking the wonderful folk on BP because my “mentor” is very tight lipped. He didn’t give me any details on what he’s looking for. It feels like a test. “Show me that you are worth my time/money.” Now I’m frozen. I’ve got this opportunity in front of me and I don’t know what to do with it. Any advice would be much appreciated. Thank you all in advance!