All Forum Posts by: Larry S.

Hi @Claire T.. It looks like you haven't factored in the HOA. I know you listed it in the 25% of expenses, but you said the HOA is $280 per month, so $280/600 = 46%. Or $280 x 12 = $3,360, which is most of the projected NOI. To me, I don't see how this property works when the HOA is almost half of the rent. Just my two cents

When I saw this thread's headline my first thought was "how long until @Joe Villeneuve minds him of the tenant's job?" Glad I wasn't disappointed.

@Jorge Diaz Fellow northern NJ guy here.  Please, please, please! Don't give the Rich Dad Poor Dad guys another penny.  Shoot me a PM and I'll send you a loan amortization spreadsheet so you can play around with the numbers yourself.  

There are plenty of threads debating whether or not to pay off a mortgage faster than necessary. I find them interesting to read different people's thoughts on the concept. Here's an example of one such thread: https://www.biggerpockets.com/forums/52/topics/568...

The decision to me isn't completely black or white.  Personally, I'd look at the interest rate on the mortgage(s) as the rate of return on my money and then ask myself if I think that rate is a rate of return that I am ok with earning. For example, if you have a mortgage with a 5.0% interest rate, is that enough for you to pay extra principal each month? To me, I think there are other opportunities to invest that money at a higher rate of return, whether that's in another RE deal, the stock market, etc.  

Then there are other non-financial metrics to consider.  As @Marc Winter mentioned, some people love the idea of living in a home without a mortgage. There's no way for me, or anyone else, to value that for you. Where are you in your investing cycle? Are you trying to accumulate more real estate? If so, once you pay the extra principal, it's gone (until you refi, open a HELOC, etc) and can't be used for another RE deal. Or do you have enough assets, and at this point you are focused on mortgage paydown.

Hope that helps

@Jonathan Breton In your scenario, we are going with the idea that we've decided to make an extra payment on a mortgage (not deciding if this is a good idea or not). If that's the case, pay off the one with the higher interest rate.  Your return on the money is simply the interest rate.  If you want the best rate of return on your money (given the criteria you listed, not considering other investment options) you want to pay extra money on the mortgage with the higher interest rate, and not think about if it's on your primary or a rental.

This is assuming that the debt is fixed rate, conventional financing. If you have an ARM, you have to consider possible future rate increases. If there is commercial debt, there are often more stringent requirements (having to provide annual financials, etc.) that may influence your decision as well.

Hi @Zariyan S.. I, along with many people here on BP, would say that your student loans have such a low interest rate, that it doesn't make sense to pay them off any faster than necessary.  You should be able to get a better return with almost any other investment, rather than paying them off earlier. 

Also, if you have a house worth $350k that you own free and clear, you can open up a HELOC. This way, you can borrow against your house, and end up with 20% down for a rental property, without coming up with any cash out of hand.

Hope that helps

@Shawn Mcenteer would you mind sending me the name of the credit union you used as well? I'm currently looking around myself

Thanks @Dan Krupa and @Matt Pritchard. I sent you both PMs

Thanks @Michelle Lutz They were really nice on the phone and were more than happy to take a look at the inspection report that I have.  That's pretty much exactly what I was looking for. 

Yes, a contractor who works with foundations would be fine with me as well. As long as the person is knowledgeable about foundations and they are in the Kansas City area that would work for me

I just received an inspection report for a home I have under contract in Kansas City and there were some potential problems identified with the foundation.  I spoke with a friend who is a structural engineer and he said it looks like it could be pretty bad, so he suggested having someone take a look in person. So, does anyone have a recommendation for an engineer in the KC area that would be able to take a look at the foundation for me? I'm not looking for a long or detailed report, but someone willing to spend an hour or so taking a look for me.