All Forum Posts by: Jon Reed

ROI Plan? this is a new term for me... what do you think needs to be in an ROI Plan? What data points are your lenders expecting?

If you are planning on house hacking then there isn't much you can house-hack with a new constructions. Stick it out and find that deal that works. I would not purchase a negative cash flowing property unless there is a 100% guarantee that the property will appreciate enough to make it worth losing money every month (and there are no guarantee's in real estate).

Your lender suggested purchase the property as your 'primary residence' and then never live in the property and just lease it out? Maybe he is referring to using an FHA loan to purchase the property but that is only if you are going to live there... you can then move and use it as a rental but you can't purchase an investment property with an FHA loan (i am pretty sure... i am sure someone will fact check me on that).

I would always purchase a property in the name of an LLC for the liability protection then just find a local bank who is willing to give you a loan for it.

If something sound fishy... then it probably is. Make sure your lender is doing things/making suggestions that are 100% legal.

I hope you have three leases (one per tenant). Then, just let the current tenant out of the lease (i would keep the deposit if they failed to stay the full term) and then sign a new lease with the new tenant and perform all income/background checks as-if they were applying for the unit.

That depends on how much you have in cash reserves. If you only have $9,000 in cash then you should not pay off the AC. If you have $40,000 in cash then I would pay off the AC.
However, I personally do not enjoy having debt and there are people who will make the mathematically correct argument that you should not pay it off no matter what as long as you are getting >6% return on that $9,000 somewhere else. But... I sleep better at night when I have less debt.

I would point you to a lawyer in your local area. They will give you the best advice which will be specific to your situation and area.

Well first... I would not use a flat-fee agent if you are wanting to get max dollar for the home. Those agents will not pay the 3% to the buyer so many buyer agents will not show the house or if they do they will demand in the offer to be paid their 3% commission ontop of the 'flat rate' you listing agent is charging. If you want to really save money then just list it FSBO and state you will pay a buyers agent 3%.

Next, I would sell it in this current market. You will get a nice chunk of cash which will be tax free since it came from your personal residence. Then I would use that cash as a down payment on a property with a much better up-side, maybe a duplex. Ideally I would take that cash and start up the BRRRR engine which will help you turn your small chunk of cash into 1-3 additional rental properties per year (depending on how quickly you can renovate them).

You can call a scrap yard or tow company to move it... or post it for free on Facebook/Craiglist and require them to move it. 

Illegal... no idea... bad idea? YES! Why on earth do you want to get that involved in a tenants personal business? You can have a 25 year old tenant who has no health insurance and never gets sick... you could have a 25 year old tenant with health insurance who always gets sick.

You could also have a tenant who has health insurance but a $9,000 deductible which will still ruin them financially. 

Moral of the story, requiring health insurance is a dumb idea and a great way to lose good tenants.

Starting out the amount a deal cash-flows is not going to be the deciding factor for an investor. You will be hard pressed to find an investor (who you do not already personally know) who is willing to be your 100% financial backer when you don't have any experience or skin in the game. If I was the investor then I would want to see at least 25-50% of the cash investing coming from you. This way I know that if you get upset or don't like doing this that you wont just walk away and leave me hanging with a D class property. 

My suggestions would be to find a person that knows and trust you personally already who would be willing to support you financial as you take this first step. Or you should get a part time job with a property management company or real estate company in the area to get experience before trying to find someone to lend you six figures to invest.