All Forum Posts by: J W.

My first thought on this is yes, you will want to have representation of some type, especially if you are not an agent yourself and cannot get on site to verify the property. It sounds like you have undercut the sellers expected sales return from $180k to $150k. We don't know the sellers frame of mind, but as far as the agent, perhaps they will give a break on the percentage leaving some more money on the table for the seller since you have gone directly to them. Cash flowing at $750 each is huge. Is this based off of some other sales price other than $60,000 each? I suspect there is a different mortgage or sales price involved to produce that profit.  

I have discovered that this depends on a large number of factors. Most importantly, your lender and their policies. I am treated differently depending on which lending institution I am in at the moment. I also found that these rules change over time. The longer you have been a landlord and have obtained rents, the more willing a lending institution can be to count your rents as part of your income to determine lending limits. At one of the Credit Unions I use I thought I had hit their limit, then 6 months later I found they were open to doing 3 more mortgages. Of course private lending will be wide open to whatever they will do.

It is difficult to escape HOAs around here. Every home I have purchased within the past 15 years has had one. Around here they are typically $120-$400 per year. My most expensive one is $45 per month on a townhome which includes outdoor maintenance and trash services. I generally try to avoid locations where the HOA is high. I hate the idea of crazy HOA fees during a vacancy or eating a large chunk of the monthly rent.

Option 2 has no renovations detected and was by far the most turn key location for any used home I have looked at this year. With the Cash ROI % being essentially the same I have been pondering the advantages of new but boring vs 15 years of unknown but undetected wear and more posh. My spouse feels that I am leaning too heavily toward the older home and being distracted by vaulted ceilings and double sided fireplaces and vinyl fenced yard and upgraded kitchen furnishings where she is looking primarily at new with no undetected wear and having a full home warranty.

I'm currently looking at 2 buy and hold rental investments for single family rental and have come to a point where I need to choose. Option 1 is a new construction about 1500 sq ft and is common cookie cutter construction with a park and community pool a few homes away. No upgrades to anything on the interior but no prior owner. Option 2 is 15 years old 1700 sq ft and is beautiful high end construction. Interior is nicer than my own home with every aspect of the interior having better craftsmanship and quality. No community pool but a park within a block and a lower annual HOA. I've run the numbers and they cash flow at exactly the same ROI.

The new construction has about 15% more in up front and yearly costs but makes up for it with higher rents in it's part of town. 

Does anyone have some ideas on what to consider as far as making this choice? 

Some of the worst advice I received when I was an 18 year old intern at a real estate agency was to stay away from real estate for a while until I had some more seasoning and age and had been a homeowner myself for a while. Unfortunately I took that experienced agent's words to heart and now regret having listened. Don't let your age hold you back. Tenants should be in awe of an 18 year old who can pull off ownership of rental units. Compare positions with your tenants. Which one of you is succeeding in your dream of real estate ownership? The only thing they will know for certain is that you are fairly new to the race. Win anyway.

OK, thanks. I will be visiting with them again on Monday to see what they can do.

I've used ICCU on a few SFRs in the Valley. I'm holding all of them for now. Have you run into a limit to the number of mortgages ICCU will do, @Lee G. ? I have really liked working with them. 

A moment of calm. Today CBH cleared weeds from all 5 lots and trenched in sprinkler pipes. They are getting started just 2 weeks after the final deadline from where they were supposed to be completely finished. 

This contractor, CBH, did every house in the entire subdivision. They are the largest builder in the Treasure Valley where I live and they have 68 subdivisions currently under construction across 12 cities. I currently have two of their SFHs in two different cities. 

Latest update: we got a call from their Sales Manager today who says the 5 homes will have yards by the end of this week.  We shall see.

Thanks for all of the suggestions. I really needed some outside perspective. I was mad at the builder who has been jerking us around for months, and I was mad at the tenant who sent me the obnoxious email despite my keeping them in the loop regarding the builder and the yard install status. There are 5 consecutive lots from different owners all having the same issue.

I think I have found a yard cleanup contractor who can get the work done.

Yes, I would agree that the amount withheld from the builder was not enough. I said so at the time of the signing (it wasn't until the actual closing that I got to see the amount being withheld. We were not told 1.5%, I just figured out the math later. It doesn't nearly cover the costs involved.), but continued with it as I presumed (poorly based on experience) that the builder would follow through. I had independent contractors scheduled for interior tile upgrades and I didn't want to delay the contractors and the tenant move in date based on the hold back amount. Sadly I now know better for the next go round.