All Forum Posts by: John R.

@Lisa Casey, @Kyle H.

Kyle's idea of AirBNB-ing your place is pretty cool.  I know there are several running races in the park, plus it is just a very pretty area.  Might be a great way for you guys to enjoy your place more freely and I know my friends and I have talked about wanting a place in the country, but not really wanting the upkeep and sunk cost..so perhaps there are others who would also be interested in a close-to-town weekend getaway rental.  Several friends of mine do very well with their AirBNB set ups here in Louisville.  Good luck.

Lisa, In spite of your bad experience this time, there are many decent people who rent.  With all you have learned and the info you have at your fingertips here on BP, I'm sure you could figure out how to carefully select your next tenant.  It would be a shame to let all your hard earned 'education' go to waste! But it's also understandable if you didn't want to rent out a place that has significant sentimental value for you.  

If you do rent it out in the future, it would be fun for all of us to hear the good story about how much better that round goes.

Best wishes-John

Welcome!

@Clarisa De Luna Welcome! There is so much information here in the forums, in the blog posts, the downloadable content, and the podcast. You might also check out the local REIA club...that is an opportunity to network. I just did a nice refinance of a property with a lender I met there. Good luck.

John

What a mess!  I would suggest you and/or your husband should always have someone with you when you go over there now (48 hours notice!).  Not only for legal reasons but also for your safety.  And you really should get some help from someone who really knows the law on these issues of payment, notice to quit, your capacity to inspect the property for what remains of the term.  Do they not want you there because the relationship has soured, or could they be up to something else?  Who knows at this point, but I think you are well outside the bounds of DIY legal at this point.  Pay now or pay later...unfortunately it may be both.

@Michael Mateja It was great talking with you earlier in the week.  Good luck as you get rolling and please keep us posted about your progress!

Jim Meffert at Greg Jones has done a bunch for me around Louisville.  He has a construction/flipping background, is very thorough without being alarmist, and makes a nice report with photos documenting his findings.  I've not worked with the others on the list.  Hope that helps.

@Emmy K.  Congratulations!  A 12 plex in 40206!! That is fantastic.  

Talked with a seasoned owner this weekend, and he was telling me he is meticulous about checking/adding smoke detectors when he gets a new place.  Insurance company will have asked about this, but it is worth putting on your checklist to be sure they are all up to date and in required areas.

Brad,

I agree with Michael...you should account for vacancy/turnover costs in your calculation. There will likely be more turnover in a multifamily than you have had in your SFR's. And I would also suggest you run the numbers accounting for use of property management and hiring everything out...maybe you will do it all yourself now. But what if you grow your portfolio and need PM help, you move away, etc. At least you will have an idea of how that will affect your yield and ability to service the debt. And when you sell the property, other buyers will include that in their calculations of your property's value to them.

Also, you might/should be able to get longer term financing on a 4 plex. If the numbers look compelling I would do it on a 5 year note if that is all I could get, but it sure would be nice to secure some long term $ while rates are so low. Find an online mortgage calculator and run your mortgage numbers using your 5 year balance and play around with projected higher interest rates when you have to refinance. A few points higher will change your cash flow situation! Furthermore, I would be cautious with 100% financing, especially if you are in an area with historically flat/low appreciation. You want this investment to make your life better and move you along the road to financial freedom, not the converse. You should run the numbers with a variety of scenarios- consider your cash reserves, job situation, risk tolerance, 5 year goals, worst case scenario, all that. Lots of people finance cars of greater value than your LOC note, and that non deductible interest on a wasting asset! So I think that the 100% financing question needs to be framed by your situation as a whole.

Don't forget that having children will change your cash flow and 'free time'!  Congratulations on the pending adoption.  I hope that goes smoothly for you.

All the best,

John

@Hampton Scurlock and @Steve Frick welcome to BP.  You guys might try to make it to the meet up this Wednesday.  I'm sorry I can't be there to meet you and the others this time, but hopefully I can catch the next one.