All Forum Posts by: John Alosio

@Tim Kaminski

I am planning on partitioning off a large pass-through room to make into a legitimate bedroom. I called the town to ask if any permits/inspections were required. They gave me the few standards that must be met & gave the thumbs up but suggested i call this local sewage guy to verify that the septic system could accommodate the extra bedroom.
I called the guy, he seemed very hesitant but eventually gave me the green light. now I'm wondering if i should report it to the county to update the house's records. would this increase my prop taxes?
But anyway. call the town. couldn't hurt if you just say you were thinking about it.. see what they say.

You will most certainly have to claim rental income. Just keep track of ever penny that you spend on the house once you put it into service as a rental (i.e. who pays water, sewer?). I would recommend seeing an accountant for further guidance.

How much equity do you have in the old property? If you have over 20% it may be advantageous to open up a HELOC Just to have a safety net in case of major repairs. just to hold you over until you can build up a decent cash reserve. Just food for thought since you mentioned you're concern about future expenses.

TIP: open the HELOC now while it is still your primary residence. It Will be much more difficult to find a lender to do a HELOC as an investment property.

cheers

Greetings BP

I'm am looking to get a HELOC on my investment property for the purpose of growing my portfolio.

I recently discovered the concept of 1st position HELOC which would replace my conventional mortgage with this variable rate line of credit. Interest only payments during the draw period (10 years)

I'm wondering if there are any advantages to trade my primary mortgage (fixed 3.5%) in exchange for a variable rate of a 1st position LOC (which I understand would be around 7% right now). Would the interest-only payments justify doubling my interest rate?

In my position, wouldn't it make sense for me to just stick with conventional mortgage and add the 2nd position HELOC? Or am I missing an key bit of information?

Thanks in advance!

I was Not required to wait. The property was a "live-in-value-add". Night and weekends of sweat equity took about 2 years to complete.

I refinanced with the hopes of getting up to (or close to) 20% equity so i could do away with the PMI.

To my surprise the appraisal came back with 30%! So i ended up pulling some equity out of the refi. which went to the down payment of the new property. Sort of a slow live-in-BRRRR i guess.

@Eric Brantley
Can is ask, Why would you want to get a conventional loan if you are going to occupy? You could get another FHA as long as you can prove it is an upgrade.

I bought a owner occupied duplex FHA(3.5%). Refi'd after 2 years into a conventional(appraised with 30%equity). Then pursued another owner occupied duplex FHA(3.5%). During the process of purchasing that second duplex, the lender wanted a written letter to explain my intent for this new property to explain how it would be an improvement to my living situation I.E. closer to work. Larger SQ FT. More bedrooms. Garage. Better parking. I assume they would not allow me to get the FHA unless i can prove to them i have every intent to occupy.

Thanks all for the replies. I'm sole proprietor with 2 duplexes, one unit occupied as my primary residence.
I think@Bob H. hit the nail on the head. I need to start actively documenting in real time. I was just wondering if there was a easy way to do so within one of these store credit card systems. If not then I'll have to put on my big boy pants and look into QuickBooks.

I guess it's true what they say. I need to start setting systems in place to scale instead of just stumbling for equilibrium every step.

:)

Hello BP community,

I am seeking some advice when it comes to accounting of my DIY shopping habits.

Over the past few years I have been shopping at Home Depot with my personal credit card(2X cash back on all purchases). I have found Home depot to have the better (still basic) form of accounting for materials purchased.

However I've recently grown and need some advice on (proactively) segregating expenses between properties.

My main concern is finding a way to properly separate each purchase into a bucket via a spreadsheet. right now, nearing the end of the year, i see a huge list of purchases and i'm dreading picking them apart trying to allocate each item to a specific property / purpose. It's worse because i'm a owner occupant on one unit, so there's a ton of grey area.

I know that Lowes and home depot offer "pro" credit cards with built-in discounts.

Do these Big Box CCs offer a breakdown of end-of-year spending statement? 

Which has worked best for you? 

Which offers the most in the way of rewards?

Thanks in advance!

@Nicholas Bolcon

Success!

Glad to hear it worked out well. I hope the future of your duplex goes as smooth.

@Nicholas Bolcon

Just an idea i'm tossing out, see if it sticks.. Have you considered starting lease option to buy? This may work out for both parties.

I'm a rookie investor with a few deals under me. But i have been looking into the concept of lease options as another tool in my tool belt.

My understanding so far, this may work to your advantage in  your situation. I suppose first step would be verifying that it actually exists. This can be done with scanning the area underground to locate.
Then you could ask if the seller would enter into a lease option. 

Once confirmed that it exists, this may be what the deal could look like:

-You draft out a contract with an agreed upon sale price & terms.

-Make the contract contingent upon the removing the oil tank. (say give them 6-months to remove)

-You pay an upfront lease option fee which would cover the cost of removal.

-IF the tank is a leaker, it would be on the deed holder to remediate. At the 6-month point, you may just opt-out of the deal.

-IF it is not a leaker, then proceed to your purchase at whatever terms you are currently discussing.

Depending on how willing the seller is to work with you, this may work out in your favor to have the insurance of having them remove (and provide the official documentation).

If they don't want to be bothered, then walk away.

In my opinion/experience, i would walk away from an underground tank. I made the mistake recently of looking past it and hoping for the best. I got LUCKY. yanked the tank and NO LEAKS.

I personally don't want that stress again. It was not worth it. Maybe this approach could work for you?

Anyone have thoughts on this plan? could it work?

either way good luck!

My first duplex I used an FHA without any issues for lack of experience. quite an easy process.
. However 2 years later I was going through a different lender for my second FHA duplex. They gave me hella problems. They even insisted that I take an online course for first time landlords.
Hello... I've been a land Lord for 2 years!
They didn't care. I still had to pay out of pocket for the course. I'm convinced the underwriter was just misdirecting some anger towards me.
anyway ask your lender. And hope that your underwriter doesn't have a stick up their you know what.