All Forum Posts by: Lance Robinson

@James Buchanan If you got $1700 for rent, you would still not make money. Between repairs and vacancy, you will be in the red, trust me.  You're not in a place to do this.

With $40K saved, I don't understand why you can't put 20% down towards another property. Another option would be to prepare your property better. Did you purchase it with an FHA or 5% conventional loan? What is the value of the house and what do you owe?

Maybe you can throw money at the house and then refinance to a new loan out of the PMI at a lower loan amount (not a home equity line). Then you may be in a spot where you owe maybe $1100/month on it and could rent it out to know you will be positive. Then you could save up and put 5% down on your next SFR which maybe $150 or $200K value but only $10K down. Then I would rinse and repeat on this one, throw all your money at killing that PMI, rinse and repeat. WIth a fully leveraged house and PMI, it's impossible to make money or even break even on a property unless you got a killer deal or it is a killer multi-family deal. In the next primary example, you are even better off if you can buy a multi family with a 3.5% FHA. Then you may be able to save to buy the next one, or just save enough and in a year move in to your next primary house. Then you will have a cash flowing MF and a cash flowing SFR. At this point you could throw many to get out of PMI on the MF and refinance out of it if you'd like as well.

I'm also helping you to manage your risk in case of a blip in the housing demand. Reach out if you want to chat more. Keep exploring, but do NOT over leverage yourself as a newbie. You will end up bankrupt.

@Yoni Weisbrod - The risk involved in having a mortgage (good or bad debt) is still debt and still risk.  If you want to play it safe, then pay cash for a property. You can usually get a better deal and have more built in equity, plus you don't have to rush to rent it out in a vacancy and wait for the right tenant at the right amount. Much less of a headache. Those are the intangible when you don't haave a mortgage on the line.

If you're saving up cash for a property, then put your money in a low-turnover mutual fund to keep taxes low, then when you have enough, pull it and buy a property.

You could also buy a property, and just throw all extra money at the house to pay it off, then borrow and do it again on your next one.  No matter what anybody tells you, it is risky having millions of dollars of mortgage debt.  I happen to have 7 figure mortgage debt that I am currently working to pay off. But I know my risk tolerance and have lots of diversification. That isn't for everybody though.

@Account Closed - Nationwide only loans up to 4 properties but they are always the cheapest so I use them for 4 of my properties.

Brady, you are broke. Get that debt paid off ASAP! Any money you save is the same as borrowing money to hold in an account that doesn't make any interest. That's not s good investment or idea at all. 

Hold $1K only for emergencies and get on a strict budget to get this debt paid off ASAP. Live below your means and the reward to paying it off is that you learn to live cheap and you will be able to buy that first property sooner! Good luck!

 I like the strategy and risk mitigation of paying it down sooner.

2 thoughts - 1) Do a 30 year loan and pay on it as if it was a 15 year loan, that way if you beat your projections you pay it off sooner. If you don't beat them, then you won't be in a cash flow bind.

2) What about making a bigger down payment?

Just from reading this, in the most polite way possible, I don't think Dean and Samantha are cut out to be landlords. I have anxiety just from reading their posts. Talk about escalating a situation that doesn't need to be escalated.  Don't make assumptions that someone is lying or hiding something just because they are quiet and anti-social.  Would you want your landlords treating you this way? I certainly wouldn't want to live in a unit with either of you being the landlord.

I own over 30 units now and I currently rent. I prefer renting. If I had a landlord that was pestering me and not leaving me alone, I might just call the cops to give them a taste of their own medicine and show them how it feels when they are starting to be too intrusive. I've had landlord's try to evict me before (within the last year actually) and I was able to talk with them through it because they were being ridiculous. I always pay rent on time, I make multiple 6-figures, but still some people just aren't cut out to be landlords.  It's a learning curve I know, and I didn't want this to be rude, I wanted you both to think about this from the tenants perspective, that's all, honestly.

To answer your initial question, I walk the common areas of my apartments whenever I want to without notice. You are completely in the right. Neither of you have done anything wrong or illegal. Best of luck to you!

 I used to work for a company that paid me on the 6th and 21st every month so I get it. I would talk to them about then there pay period is and either set their rent to that pay date, or to set their renta and late fee to that pay date and tell them you will wait until the 11th (let's say pay day is the 10th) and if you don't have it by then you will begin the eviction process. This could be good for both of you.  If they always pay on that day, I wouldn't kick them out personally.

 1. Nice name.

2. I have a buddy that invests heavily in LA and he saves up and puts a huge chunk down so it is cash flow positive enough to be "safe." He also goes 15 year loan and is working the pay off as fast as possible play. He owns a few buildings there. You are also at a higher end of the market cycle (just my opinion) so it may just not be the right time for your situation..

PS I used to own a 4plex in LA that I sold at the end of the last year.

@Chris Herrera I think this is a good deal for a house hack. "good deal" is a big word. It's hard to be positive on an FHA house hack, let's be real. With that said, this isn't bad, I would do it.

Build up good reserves and have a good emergency fund for yourself. There probably won't be value add like you think, but as rents increase and hopefully you can get out of your PMI later down the line, this will be a good little property for you long term.

I would run the numbers and strongly consider throwing money at the payment to get out of that PMI as quickly as possible if it makes sense. More piece of mind, less risk, more cashflow, etc.

Good luck!

Lance

 I would never. It's probably Memphis Invest. They are very upfront that you may pay above appraisal price.  If they are upfront about it, then that is a decision you have to make. If they are not and the appraisal comes in bad, then I would just walk away and look for the next one if they won't meet at the appraisal.

There are many philosophies on this, my opinion is that I don't overpay for properties period.