All Forum Posts by: Kevin S.

@Jared Baker you're going to get people from both sides of the fence on this one, some people love SFH and some love multifamily. I personally started with a duplex because it allowed me to house-hack, and also because in my area they actually cash flow better. I wouldn't be concerned about "double appliances" to be honest, most will come with appliances and if something breaks down, you can always find fairly good condition used ones on places like craigslist inexpensively, and I make sure in my lease to state that things like washer/dryer/refrigerator are tenants responsibility to have repaired. Plus, your CapX for both is lower overall because they share a roof.

Do you know if your realtor is an investor? That would also tend to color how much I took their opinion on this matter into consideration. Good luck with your search!

@Cassi Justiz as you well know since you live here in Oklahoma, July is usually HOT which can put a damper on interest. You might consider giving them the option to renew with a month-to-month contract, but at a higher rate than what they are currently paying. Sometimes these "one month extentions" can turn into several months if things go wrong with their home purchase, so that's something else to consider.

@Kassandra Ortega Glad I could help, good luck with your purchase!

@Alexander Quan 1) the penalty for committing mortgage fraud (which is what that would be) is, from a quick google search "Under U.S. federal and state laws, mortgage fraud can result in up to 30 years in federal prison, and up to $1 million in fines"

2) you posted about possibly committing said fraud on BP with an account that shows your full name

3) Most (if not all) owner-occupy mortgages have clear language that you must occupy them, so you can't just let it sit there empty for 45 days (this is an assumption, will depend on what your mortgage language says).

Overall sounds like a shady way to go about starting off your investing career. If I were you I would find another avenue to fund it and preserve your reputation as an honest investor.

@Wayne Smith like others have said, definitely need to account for CapX and R&M, but I noticed you are also not accounting for Vacancy. I know your tenant has been there for 14 years, but you still want to set aside a portion of your profits for the day when she vacates. I do 10% CapX, 5% R&M and 8% Vacancy (to give you about one month of rent per year 1/12=8.33%). If you add an additionall 23% of expenses to your report, you're still netting $198.40/month in cash flow, and you'll have recouped your initial investment of $3,090 in 15.6 months, so I'd say it's a good pick. Congrats!

@Matthew Irish-Jones as far as I can tell, the Inbox search function only searches in the titles of messages, it won't search for sender name or in the content of the messages.

@Kassandra Ortega I just used the calculator on Calculator Soup (though not the one you linked too, that's an interest calculator) using $160k 4.125% and 360 months and get $775.44/month. My guess would be that the lender is including insurance (PMI, MIP, etc.) and/or taxes in their calculation. Why not just ask for clarification on how they are calculating it and what's included?

@James Baker I agree with @John Underwood, however I also understand the concern that maybe the previous landlord didn't keep to the standards you want when placing the tenant. Why not give it a chance and when their lease is up for renewal inform them that you would like them to re-apply with you, do the usual background checks, etc. and make sure they meet your rental criteria. That way you (hopefully) don't have to find new renters but also have the security of knowing they met your criteria. Another option would be to just put them on a month-to-month lease starting in July, that way if there are ever issues you just have to give them 30 days notice (or whatever your local/state laws require) before they must leave.

@Mindy Jensen I use 5% R&M, 10% CapX, and 8% Vacancy. I also started out with $1500 set aside to cover any repairs/expenses that occurred before I'd saved up my in those categories, so far repairs have been much lower than 5%, mostly due to my home warranty, which is basically just a $75 fee whenever I have them repair something (which isn't often).

@Christopher T. Murray my first question would be, are they under month-to-month leases or annual leases? Because if they're under annual leases you must honor the lease until the end, i.e. you can't increase rent until they renew their lease. If they're month-to-month then you just need to give them 30 days (or whatever your state/local laws require) notice of the rent increase, however seeing as the current owner has not increased rent and you're the "new guy" coming in, don't be surprised if the increases are met with anger/hostility. If it were me I would send them a letter explaining that they are currently paying under-market value and maybe provide some examples of places going for the same/more. If increasing it $100/month truly is in line with the market then you have a fair chance of them staying, but nothing's certain. I'd make sure you have a cushion of cash in case one (or both) decide to leave and you have to spend a month or more finding new tenants. Good luck!