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All Forum Posts by: Kevin Phu

Kevin Phu has started 61 posts and replied 472 times.

Post: Renter Screening - Pre Form

Kevin PhuPosted
  • Rental Property Investor
  • San Diego, CA
  • Posts 507
  • Votes 170
Originally posted by @Kevin H.:

Good Morning Everyone,

I am about to close on my first SFH in Roxborough Philadelphia this September. I am excited and nervous at the same time. I have been scouring the boards trying to learn as much as possible, when it comes to being a Landlord. My biggest fear is I get a nightmare tenant and I want to make sure I do everything possible to try and weed out the bad ones. I got this idea from another poster and thought it was a great idea. They stated that before they show a tenant a property and have them fill out an application. They make them take a Pre-Screening Survey. All done through Google Forms, which is free. I have put my own survey together and want to know if I am violating any FHA laws or illegal requests. If a tenant fills this out and meets my initial requirements. Mainly having a credit score over 600, 3x monthly income, no felonies, no evictions etc. I am then willing to setup a appointment to show them the property and move forward with the screening process. I would appreciate everyone's feedback on it. Letting me know if I need to make changes to my survey, if I am breaking any laws or if this is a smart way to pre-screen tenants through the screening process. Below is the link to my survery:

https://docs.google.com/forms/d/e/1FAIpQLSd3d4rV-g...

Looking forward to some feedback,

Kevin 

 Looks simple and to the point! I'll probably be using this as a template for me in the near future.

How did you come up with the income ranges? Why not ask for their actual monthly income?

Post: How can you find out if your tenant has vacated the property?

Kevin PhuPosted
  • Rental Property Investor
  • San Diego, CA
  • Posts 507
  • Votes 170

24 hour notice to enter for an inspection. Once you're in, I'm sure you'll be able to tell if they have vacated or not. 

There are some things to check that come to my mind that would tell you if they've been there or not. Keep in mind, I was in the Navy and did a lot of inspections of junior Sailors so I learned a few tricks here and there.

-As soon as you walk in, shut off all the lights within front doors reach and lay a flashlight on the ground. If there's an even coat of dust then someone hasn't walked through in a while.

-Check the dish drying rack/dishwasher. Are things dry? If there is any tupperware in there, pick it up and turn it right side up. Water always collects in the fold where the cover goes over. If there's water, someone washed it recently. 

-Still on the dish drying rack. Look where the utensils are put into. Is the bottom wet or dry? Same as above.

-Apply the flashlight technique from the first thing to the bathroom/shower. 

-Check any oil splatter on the stove. If it's still soft and oily, probably means it's pretty recent. 

This may seem like a lot but honestly it takes no more than 15 minutes and could give you a good idea. 

Post: Renting to parents?

Kevin PhuPosted
  • Rental Property Investor
  • San Diego, CA
  • Posts 507
  • Votes 170

I am closing on a property next month that is 4br/2ba and I was talking to my sister about my plan. I am going to live in the master and rent out the other bedrooms to cover the mortgage. She jokingly threw out the idea that she should move in and my response was she could as long as she paid what I was expecting in rent. Her response to that was, "Wow...would you charge mom and dad rent?" My response was "1, I couldn't with a good conscience charge them rent after all they've done for us. 2, If I didn't charge them rent, I'd be putting myself in a very tough financial position which would be very stupid and irresponsible. So to answer your question, I wouldn't move them in period." 

Now if I had a large RE portfolio where I could put my parents in a home for a very small cost, sure, I'd absolutely do it. Where I am now though, I can't. 

I draw the line at making a profit off of my parents or having to treat them as "tenants".

Post: Cabinet advice for my rental!

Kevin PhuPosted
  • Rental Property Investor
  • San Diego, CA
  • Posts 507
  • Votes 170

What's the condition of the cabinets? You'd be surprised by what a little sanding and fresh coat of paint will do to old cabinets. It would probably cost you a few hundreds max. 

Post: Need Family Loan Advice

Kevin PhuPosted
  • Rental Property Investor
  • San Diego, CA
  • Posts 507
  • Votes 170
Originally posted by @Don Konipol:

@Kevin Phu, LOI is usually figured as an annual basis. Quite rankly earning a 30% return over 10 years stinks.

Private money is currently earning 8-14% SECURED by 1st liens on real property.  If this is a family deal and he wants to help you out anything is possible.  In my experience borrowing and family do not mix.  No matter what happens, the relationships, and that includes other family members, is never the same.  No matter what.  And not for the better.  

If you have no or limited experience in whatever aspect of real estate you are thinking of going into, the reality is that losing money is a real possibility.  I know o many family members no longer on speaking terms because of "misunderstandings" about family loans.  When a family member lends you money they become concerned with minute aspects of your personal life- from the car you drive to the amount you spend on vacations.  If you choose to go this route be aware that it will change the family dynamics, and almost never for the better.

I appreciate your insight and the points you make are very valid. Maybe I should've given a little more context to this situation which I think would address most of the concerns you brought up.

My uncle owns a restaurant wholesale supply business that provides supplies (dry and wet) to a lot of restaurants in NY. That is where his money and wealth come from. He does not invest in things such as stocks or real estate (at the moment, maybe I can bring into the world of REI ;) ).

Recently my older sister got a brilliant idea to buy a forever home and my uncle was going to lend her the 20% down payment. She's in the San Diego area so that's at least $80K. Now for the kicker, my sister is not financially responsible at all. I introduced her to my lender who is one of the go to lenders for a great friend of mine who is an agent in San Diego. Due to her income and debt, they wouldn't even qualify her for a loan. 

On the contrary, I've always been considered the smarter and more responsible one in the family despite being the youngest. My current life position speaks for it. I am 25 years old, 6 year Navy veteran, government job paying me almost 6 figures, about to close on my own house (will be house hacking), excellent credit score, and very low debt. Not to toot my  own horn but my entire family is aware of how well I have been doing with my life.

Now with all that background info, I am confident my uncle would provide me with an unsecured loan for a significant amount with a return that is pretty decent in my opinion. Your point that things could go south and then affect family relations is a very valid point but knowing my family and what they've all overcome together, we'll always figure out a way to work it out. A major worry of mine is presenting this plan to them and trying to explain my REI goals/plans to them in a way they will understand. Just to put things into perspective, my family never really understood what I did in the Navy for 6 years or understood why I always had to go out to sea with the same ship. Imagine trying to explain REI to them...*sigh*

Post: Need Family Loan Advice

Kevin PhuPosted
  • Rental Property Investor
  • San Diego, CA
  • Posts 507
  • Votes 170

I have a family member who is a pretty successful business owner and I know he has money just sitting in a bank. I want to ask him to loan me some money so that I can get into real estate deals. How should I go about it?

I was thinking about asking for 100K at 3% over 10 years. He would get back 115,872 at the end of the loan for a 15.8% ROI or with a 5 year balloon which would get him 111, 674 for a 11.6% ROI.

Would this be a good way to start the conversation? Should I ask for a lower amount like 50K, do a few deals with it to show him the results and gain more trust and confidence with him which could lead to a higher loan amount in the future?

What kind of legal issues do I need to be concerned about? The minimum IRS interest rate for a long term loan is 2.55% so that base is covered. 

Post: Best alternative way to close on this deal

Kevin PhuPosted
  • Rental Property Investor
  • San Diego, CA
  • Posts 507
  • Votes 170
Originally posted by @Rhea Wu:

Thanks Kevin.  What about seller financing- 80 Percent bank finance and 20 % seller?  I pay 20 percent back over the course of 2-5 years? Or other strategic way of closing the deal?

 I'm not too sure as I am not too experienced but you have to consider what the bank would think about your down payment being borrowed. Also, what's in it for the seller to let you borrow it? On top of that, you would have 0% in on the property. I don't think the bank or seller would be too comfortable with that because you have literally nothing to lose.

Another big question is, what is the ARV of the place? The repairs you listed are pretty big. Does a purchase price of 109k justify the necessary repairs?

Post: Moving Military Family - VA Loan, Licensing, BRRRR and Flipping

Kevin PhuPosted
  • Rental Property Investor
  • San Diego, CA
  • Posts 507
  • Votes 170
Originally posted by @Jerry Padilla:

@Kevin Phu

You do sign the intention to occupy form again for a VA refinance.

I read that when refinancing a VA loan using the IRRRL, the only occupancy requirement is that you certify that it is OR was previously your primary residence. I'm aware that their are different types of VA refinances so could the "intention to occupy" form be for the other ones?

Post: Best alternative way to close on this deal

Kevin PhuPosted
  • Rental Property Investor
  • San Diego, CA
  • Posts 507
  • Votes 170
I think it may be best to walk away. The price seems pretty locked in and the potential repairs costs could be high. I personally don't see any room for negotiation.

Post: How to make this seller financing work

Kevin PhuPosted
  • Rental Property Investor
  • San Diego, CA
  • Posts 507
  • Votes 170

OKAY! So, landed myself in an unplanned opportunity...potentially.

Run down, I have a counter offer from a motivated seller for 417K. I am under contract on a different property that I have chosen over this but have not informed the seller that I will be rejecting their counter. So then Robert Kiyosaki appeared on my shoulder and asked, "How can you get both properties?" 

Seller's Situation: The son is building an addition to his home to move his mother in. The home the mother currently lives in is a family home and was purchased in 1964. Appears to have no refinances on it so safe to assume she has 100% equity. The son seems pretty motivated to get his mom into his mom as she is very old (90 if I recall correctly) and doesn't seem to be hurting for money.

Seller financing seems to be the perfect strategy for this but I need some help. I'm a newb...

Pros for me: I get a rental property that is 100% move in ready. She cared for this place with absolute love and the condition is immaculate. 

Pros for seller: No dealing with banks. Steady income coming in. Will make significantly more than their asking price (425k) in the long run because of interest.

Haven't ran detail numbers yet but I will as soon as I hit post but here's what I'm thinking so far. 

Purchase: 350k

Down: 20k

Finance: 330K for 30 years at 6%

Seller would make 712k at the end of the loan. 67% more than their list price!

I can make it cash flow at this price. Would this be a fair offer and how should I go about presenting this? Another problem I see is that he has a listing agent so if he keeps him, he would still have to pay him  commission even if he were to seller finance right?