All Forum Posts by: Joe Kato

Didn't meet tax exempt time-frame on SFR sale... was 1 year too late in getting principle residence exclusion. It was small amount of gain.. but large amount considering the loan paydown..

As far as commercial, I am looking at $75K down, with 5.25%, adjusting every 5 years, but cashflow is $1500/mo with hefty reserves for maintenance and vacancy.

I have residential loans on two 3-family units. One at 3.6% and one at 4.25%, fixed 30yr. I have enough liquid assets where I could nearly pay off the 4.25% loan this year and gain $850 in monthly cashflow from ditching the mortgage, but then again I could use those liquid assets to buy another similar MFR property and get $900/mo cashflow from a lesser down payment but adding more risk with another property in town..

Trying to weigh buying another property in the area (too many eggs in same basket?), buying commercial with higher cashflow, paying off mortgage for easy cashflow without more work/property to manage, or investing in other investments with my capitol. Just hate seeing lots of cash sitting in a 0.8% interest savings account..

2014 update:

Well I sold the SFR, netted enough cash for another down payment. Looking at another 2-4 family multi or 6-fam commercial property. Any suggestions on obtaining a commercial loan or try to stay with residential loans while I can still qualify for them? I can get 4.25% fixed/30 for primary residence 2-4 family, or 5.25% commercial, 25yr amortization with rate adjusts every 5 years. I found a great cash-flowing 6 family, but worried about rate changes down the road and added legal work for a commercial property..

but i can't find a 2-4 family in the price i want right now like i did last year..

Here is estimated equity from yr 1 thru 30 with same $500 loss per month for 30 years, 3% appreciation of house..

Thanks for the replys. Not immediate family..

Zillow says the house is $300K. Could sell it right now for $250K. Note payoff is $140K.

Rent is $700. Could remodel the apartment and get $1100-1200 rent.. It is 2 blocks from the Ocean. Could fix up attic and make a balcony with water-views of the Atlantic.

Well I chatted with a family member that says the mortgage is too expensive to keep paying and they want to sell their 2 family. They rent out half of if and want to remain in the other half, although they would no longer have to make any rent/mortgage payments. They have a mortgage on it for half of market value, and would sell me the house for the payoff amount, then I have a house that I have to rent back to the seller for as long as they want (10-20 years) for free. The other half of the house brings in monthly rent, but a new mortgage with PITI would be $500 more that the one rent stream. Rent could stand to go up ~$200 if confronting the long term tenant, but how do I justify paying $300-500/mo for a house I cannot fully utilize for 10+ years? Is this worth it from REI perspective? Is it worth 10 years of maintenance/repairs to have the home equity that is expected by then?

Thanks Rob and Stephanie. I looked up Mrs. Murphy and in Conn. for example it only applies to 2 families, in RI its hard to distinguish what is possible from the statue.. http://webserver.rilin.state.ri.us/Statutes/title34/34-37/34-37-4.HTM

wish there was an easy button to transfer the pages and pages into a few bullet points.

Another doosey today... Get a call from someone that wants Section 8. Can I say I don't take section 8? (I haven't tried to get approved for sec.8) Is there restrictions against that? Also can I set a person limit on the apartment for how many residents there are?

Ductless mini splits are heat and A/C combined. So you might loose rental rate since tenant has to pay heat now, but the A/C installed also is a benny.

OK, how to reply to this??

Get email asking me to call them about apartment. I call them and while chatting, hear she is married to a guy who was in the paper last month for domestic violence. I said on the phone we do a background check and do not allow any tenants with a record in their past. I said I was not sure she would meet the application guidelines. and hangs up.

Get voice mail later in afternoon from someone at child and family services calling about someone who called earlier.. Did I do something wrong?