All Forum Posts by: Leo Poon

 If the seller does not have a lawyer when closing. That could be a lawsuit awaiting to happen. If the seller has a lawyer when closing, then the lawyer will probably point that out to the seller you might refinance in a couple months.

 It sounds like you are letting the seller believe he will hold the note and enjoy the  10% interest for 10 years so he wouldn’t have to pay capital gain tax upfront. But in reality, he will figure you misled him when you refinance and pay him in full and he is then force to pay the capital gain tax. If you do this long enough, I am sure one of the sellers will file a lawsuit which come back to haunt you. And it never looks good for an investor against some elderly on court.

 It depends if the house price will appreciate in the near future. For instance, NYC multi family will definitely not cash flow positive with 10% down unless you bought it dirt cheap which rarely happens. But the house price can appreciate a lot more than the cash flow. A flipper friend of mine bought a 3 family near long island city for 800k in 2015, it is now worth 2 million. Thats 1.2 million equity appreciated in 4 years, and most likely will increase further due to Amazon HQ2. So unless your into similar situation, it is better to cash flow positive on day 1 if house price has little appreciation in the future.

 To be honest, 15k won’t be enough for a coffee shop. The rent and deposit will already cost that much depending where you located. You still haven’t calculated the cost of renovations. Equipments beside espresso machine, furnitures, insurance, utilities, product cost, labor cost, taxes. Most businesses don’t even make money in the first few years. So I don’t suggest going into business because you like coffee. It will most likely turn out to be a hobby that costs money than a business that makes money. 

@Michaela G. Maybe install some security cameras and public lighting for the outside area, this will probably discourage him peeing or beating people in public while he is under the term lease. 

 I read a post on BP before about someone filed a judgment on the non-paying tenant, and after 10 years or so. This non-paying tenant inherited a house and sold it. Then the title company discovered there's a judgement on this person and proceed with paying back the judgement, the principal with interest was about $56k. Moral of the story, you never know. At least it has a better chance than winning a lottery. 

 If saving for a down payment is a problem, you want to know what are your expenses. Try your very best to cut unnecessary costs and increase your income. Whether doing part time or doing more shift, just gotta do what it takes if your serious. 

Even if you would find any seller financing/master lease/or hard money lender, they would all require you to have reserve to be able to run the property at minimum of 6 months. Alternatively, you can borrow from friends and family, but you need to be sure that you can pay them back if things go south. It could be in monthly installment. 

We are still in historical low interest rate. Just look up the interest rate chart and you will see. Higher interest rate means less buyers with commited funding, so less competition and more bargaining chip with seller if your one of the only few that can close on properties. Numbers and statistics don’t lie. If you buy low enough, it will offset the risk tremendously.

@Tashia K campbell Have you talked to Non-Qualify Mortgage Lender, a lot of them are asset-based lender that will care less your personal income and focus more on the property itself. Rates will be higher than a conventional loan but it is still reasonable. If you can come up with 20% down, you should qualify for the loan with an asset-based lender. 

If you are looking for a partner, I would recommend posting your operating term, what are the splits, and the plan for managing the property.

 I don’t think it can be changed. It is how capitalism work. The rich getting richer thing. On the other hand, one can change themselves. While making 100k plus annually and have hard time raising 1k is an indicator of poor personal finance. Some questions to ask ourselves are:

1) Are you having ego/dignity problem which you always compare yourself with your peers. You must buy the fancy stuff while cheaper options are available? Want vs need.

2) Are you too lazy to save money for investment or emergency reserve? Ask yourself how often you dine out instead of bringing your own lunch? How often do you use taxi and uber?

3) Are you planning on your next vacation trip so you can put some glorified selfies on FB or Instagram? 

The lists can go on forever, but the point is we are where we are because of our past decisions. We put this on ourselves by spending relentlessly over our budget. Majority of financial freedom will not be achieved without sacrificing the quality of life.