All Forum Posts by: Account Closed

Maybe you can share with us your goals and we can help you figure out your next step.

Check out this duplex in Seaford, De

214 E King St, Seaford, 19973 on realtor.com 

Just for exercise purpose run the numbers. Find for rent adds. See if that property may bring you positive cash flow.

 Hi there, we live in Philadelphia, have 3 kids, live on one income of my husband. We managed to save for down payment and bought 2 duplexes in 2016 and this year.

The market here is pretty expensive especially for multyfalimy. You would never buy 4br. SF for K189 here, maybe only in high risk areas. 

Maybe when we are more experienced we will by something in cheaper area, just for the cash flow. We manage ourselves, so the quality of tenants does matter a lot.

I would advise to buy duplex at first, this way you are spreading vacancy risk between  2 units. For example now we have a vacancy and the other unit still brings money. With SF we would have to pay all mortgage out of pocket. 

Svetlana

I have read on Investopedia website that you can put 10% down and then take a piggy back loan for another 10% and put it towards downpayment. This way you will not have PMI just additional payment for that 10% loan, but you will pay it of quicker I think than PMI , just need to calculate if that monthly payment is working for you.

Could you, please tell us more about the HELOC product that you got. Is it fixed or variable? Is it interest only? Everywhere I checked it was around 4% on K57. How your you able to get that low rate. Who is the originator of your HELOC?

West Chester PA doesn't really have much choice of multyfalimy and the prices are high. 

 We bought 2 duplexes in NE Philadelphia recently , we also are beginners. We like that area because that's where we live and it's a lower risk area .The competition for multyfalimy is CRAZY though. One piece of advice when you considering putting an offer on multyfalimy property check it's zoning status first. One of our duplexes was built as multifamily, but registered as RSA-3 , which is single family .We are now unable to get 2 rental licenses and have to go through a very costly rezoning process . Some people learn on their own mistakes, so we suggest you learn on ours:-)

Svetlana

 Just curious, which zipcode is that triplex located?

Thank you 

Svetlana

Do you think you bought it under market value ? You can figure that out by checking out recently sold similar houses in the same area. If you did, you might have even more equity there then the amount you put down. You can get a HELOC in amount 70-80% of that equity, which you can use as a down payment for whatever you want to buy. It is usually around 3.5 - 4% interest only, but maybe you'll find even better. Just make sure the numbers will work for you and you will still have enough cash flow for mortgage and maintenance .

Svetlana

 Thank you ,Thomas. That was exactly my thought at the beginning , but then I was aware the husband-tenant had some kind of health issues ,he was on dialysis and spent some time at the hospitals .

I guess they figure since we have thier last month rent they just going to stop paying and move out. I don't think I can't charge them $2000  early termination fee, because they simply don't have it and It doesn't feel write.

Come to think of it, I felt sorry for them when my realtor (that i hired to find tenants) told me of thier story of having a bad credit due to forclosure. At list, I thought they are being honest. Their income was closed to 3 months rent so I thought I'll give them a second chance.  My realtor also told me she had a good feeling about them, on the other hand I had a gut feeling that that wasn't going to workout somehow. But being a new landlord with no experience what so ever I decided to go with her gut instead. 

Next time we will try to make a better choice, after all losing rent and paying mortgage out of pocket is not exactly fun.