All Forum Posts by: Joseph Harr

@Frank Hotard How much will it rent for when you leave? It's a small place so I'd guess it won't rent for enough to cover your expenses anyway so I'd probably sell, especially if the loss is small, it unless it's in a great neighborhood that you think will do well over time. 

@Scott Trench

I think there are a couple reasons assumable loans aren't more popular.

For one, my lender told me banks won't do loan assumptions even if the loans are assumable, but I think they were just blowing smoke so I would get a new loan with them.

I ended up going under contract for a VA loan assumption where the seller doesn't need me to substitute my VA entitlement with his own. They tell me he's 95 years old so I figure he's not buying another primary residence for himself.

To cover the seller's equity I have to put down $75k which will be a 33% down payment on this property. I figure it's worth it for the 2.3% rate. The bank is dragging its feet too so we'll see if it actually works out. All for a fixer upper, that I'll have to move into, that will eventually cash flow a whopping $200 per month for probably a 2% CoC when I move out.

By the time I build my cash back up, all the covid era low rate assumable mortgages will have even more equity and take even more cash.

I can't even find properties that would break even at this point. I would need to find an even better deal than before to beat the risk free 5% from the HYSA. I'll keep looking though.

Say I have $35,000 in a HYSA that generates $150 per month in interest. If I invest that money into a rental property that breaks even, wouldn't I actually be cashflow negative $150 per month now that I'm not getting that interest from the HYSA anymore? At that point I'd just be banking on the loan paydown and hoping for appreciation. 

@Josh Carpenter

I've used August Smart locks on mine. A few issues every now and then but works fine 99.9% of the time. Airbnb integration works well. Gets get a code and instructions as soon as they book. Lithium batteries last a long time. I also have a lockbox with a key as a backup.

Do you have any advice for finding properties that would be good candidates for live in flips? For a lot of fixer upper homes, my offer, using an renovation loan, often loses out to lower offer cash buyers. I think a lot of sellers with crummy houses don't want to mess around with the process of a renovation loan and would rather do an easy cash sale to another investor. My lender has told me that fixer upper homes usually can't be financed with conventional (non reno) loans. 

Some options I've considered are finding houses with convertible space to add square footage but I worry that the cities will just not permit those conversions. The city employees are not helpful when I reach out to them to inquire about this possibility. 

The other strategy I've considered, but have no idea if it's feasible, is getting some sort of hard money loan for a live in flip just to get the place and then refinancing it with an owner occupant loan once it's fixed up and I move in. I don't know if any hard money lenders would be up for that sort of thing though. 

Yes when I bought the houses they already had the flooring and the appliances. All of that looked fine. One house is high end and one is just a mid range flip kind of place. I can tell the flooring was cheap in the one house because it's already cracking in several areas. For the dining furniture in the nicer house, I shelled out and got what seemed to be good stuff but my guests keep breaking the cross bars between the chair legs, staining the cushions, scratching the tabletop, and then just the bolts come loose over time. For the cheaper house, I got the dining chairs from the Habitat for Humanity Restore and they are much better: no cushions, no crossbars to break, etc. For my next place I want some furniture like that but all the places I have looked so far have the fancy ones with bolts and cushions and crossbars. 

I do pretty well with my STR. Jury is still out on the MTR which I converted from an STR. I can't cashflow LTRs because I can't find them cheap enough with today's mortgage rates, so I'm looking for my next STR now. I think ideally I'd want to get a place that isn't a high priced cheap flip. That way I can just put in more durable things and not pay a premium for a flipper's granite, cheap paint, and cheap floors. I like STR but the maintenance gets expensive and frustrating to manage or do myself.

Thank you everyone for the recommendations. 

If you were starting a new STR or MTR, what are some things you can do to cut down on future maintenance? I'm looking for durable furniture, linens, construction materials, things like that.

I have and STR and an MTR and the maintenance things just keep piling up: LVP cracking, paint chipping/peeling/bubbling, walls constantly getting marked up, dining chair bolts coming loose, stains on every piece of cloth and furniture.

Everyone else has mentioned the noise but I'd also be worried about water leaking from the top unit into the bottom unit. If there's a leak, it could affect both tenants instead of just one.