All Forum Posts by: Kevin S.

@Matthew Powell A couple people have mentioned the ability to take a distribution (though you have to pay taxes and the 10% penalty) HOWEVER you must check your 401k Plan's rules (typically you can request either an abbreviated version or the full Plan Document from your HR department) to see if it allows this. Usually the only type of distribution you would qualify for (since you're under age 59.5) would be a hardship distribution for a homebuyer, however I believe you can't own any other houses/properties at the time of the withdrawal and it must be owner-occupied. Additionally some plans don't allow for hardship distributions (or even loans for that matter) and if your company's plan is set up like that then you're out of luck.

@Ben Ertl

Just out of curiosity, any particular reason you're opting for full 20% down rather than doing an owner-occupied FHA @ 3.5% down? Is it just to avoid PMI? $79k @ 3.5% would be a down payment of just $2,765 which would leave you ~ $13k for other REI projects (or to cover more costly renovations).

@Johnathan Robinson

1) The interest rate you're using is low, I just got pre-approval for a residential and unless you're paying points you're looking at minimum of 4.625% for a 30-year (and from what I hear they're headed up). If you're doing commercial you're looking at 5%+

2) CapEx at 6% seems low, typically when doing revenue/expense analysis 10% is what people use (though if the property really is in great condition your 6% may be justified)

3) Most on BP will recommend you budget in some amount of Management Fees because if you plan on doing buy and hold, eventually you may get to the point where you want to outsource the management. You still want the property to be able to cash-flow decent after paying management fees. I've been using 10% in my analytics.

@Rodney Reeves If you're looking for an easy spreadsheet to track your income/expenses in I like this one:

http://www.fastbusinessplans.com/business-templates/rental-income-expenses-spreadsheet.html

Thanks for the input @Callum K. I'll probably end up talking to both PM's and RE agents as I try to find my first property

Chris, I haven’t used First United for a duplex, but do have experience working with them on traditional mortgages and to be honest I’m not surprised they got their info wrong, their knowledge and customer service isn’t the best (and their website isn’t user friendly at all) I would definitely talk to other banks.

Thanks @Dennis Bethel!

Thanks for the suggestion @Dennis Bethel, but I'm not sure I'm ready to take on commercial property yet. I figured I'd give house-hacking a residential duplex/triplex a try first to get my feet on the ground before tackling something bigger (though definitely want to go for bigger properties eventually, economies of scale make it more profitable I'd think)

@Dustin Davis hmmm, I haven't driven around that area but wasn't aware there were a lot of multi units there. Guess I shouldn't be surprised since it's just north of TU.

Good point @Tracy Streich, definitely something I hadn't thought about before.