All Forum Posts by: Lynnette E.

You need money to pay for the mortgage when the renter does not pay or the unit is vacant.  You need money to fix whatever needs to be fixed as soon as the renter calls.  You need money for things like taxes and insurance and deposits for trash and water services.  And for clean up after tenant turn over. 

What you are considering increases the likeliness you will end up with your house going into foreclosure and you will loose it.

Have a substantial emergency account.

What you are proposing is exactly how I invest, buying the property for cash and renting it out.  I tend to buy fixer uppers to get that instant sweat increase in value as well.

Its low risk and weathers the times and markets falls. I plan to take the rent and reinvest it in future purchases, but for now am spending money I have from selling my home when I moved. Only money I plan on taking out is to pay my kids for their demo work. I have two 15 year olds who love demo work. And their money is going right into a ROTH IRA. Hoping they have the hours to max it out each year.

Hello,

I bought property off auction.com in the past few months.  Redemption is state specific.  Here in Tennessee it is not an issue, there is none.  Owners give up that right when they get a mortgage.

Their title insurance seems to be hit and miss, depending on exactly what company is doing it.  You can choose your own and pay for it.  That is what I recommend.  With theirs they take all issues and instead of figuring them out and clearing them they just put them under the exceptions and you are stuck with the issue e.g. title is not ensured against the bankruptcy that was filed by the owner or for the construction lien filed against the property.  Use your title company and they should clear everything.

Whether you get a quit claim or deed is based on if you choose to get title insurance--its your choice.

Their title is mostly cleared, some owners-the banks- do not clear the utility bills that are attached to the houses...and generally not recorded against the title.

I have a similar situation to yours, cash from the sell of a property to invest or use.

I am not married, so its only my decision, but for me, being retired, I want low risk and no worries.  So if a rental is vacant, I do not want to be struggling to pay a mortgage or utilities or insurance or taxes.  I do not want to stress out over getting a new purchase ready for renters fast or the turn over between renters if I have a trip or something else planned.  I want to enjoy my retirement.

My goal is to invest the money and get a better return than putting it in a cd.  (Yes I have money in stocks, muni funds, etc., but real estate is a long term - lower risk investment for me.  I already have enough higher risk investments.)

I am buying fixer upper houses to get the initial increase in value with cash, then will rent them out as they are fixed.  I will not take out money or re-fi as I want less stress.  The properties are all paid for as I go.

So, maybe I won't be able to buy as many properties as fast, but the profit from the rent will be saved for the next house to buy.  So I have a pathway to buying more houses too.  

My goal is to have 4-5 houses bought by the end of 2019.  I currently have 2 paid for and being fixed up, one is in escrow and am looking for another.  I would readily live in any of the properties I bought or are in escrow...well, that is after they are fixed up.

Overall, the net income from having paid off houses is much more, you do not have to pay a mortgage.  

Now, part of this is ego, and pride, and status, so goals can be very different.  Part of it is money.   But would you rather say you have 100 doors, making $100 a door a month, giving you $10,000 net a month  or would you rather say you have 10 doors giving you $10,000 net a month?  Me, I'd rather have the ten.  That is 10 stoves, 10 roofs, etc, rather than 100 to replace.  Many people need to say 100 doors.  It is part of who they are.

And I know this is not the BP way of looking at growth, but it works for me.

I'd hesitate to rent to an absent parent with a 17 year old in charge of the younger kid/s.  You ever hear of the 'party house'?  Your rental could become that house with holes in the walls and totally trashed.  And liability for the party guest kid with alcohol poisoning.  Does the dad return each evening, or is he a long haul driver?

And with an absent father, no mother, and a 17 year old kid in charge, don't expect any cleaning of the home will ever happen.  Mice and roaches galore!

How will you communicate with the dad?  With a kid as translator?  Bad situation for the kid.  

Why are kids going with dad and not mom?  Will dad have a girl friend too?  Other adult?  Does dad have known limits on how many nights he can have guests live with him?

Is dad legally in the country?  If he is deported are you going to evict the soon to be 18 year old with no income and sibling?  Will you state let you do that in a reasonable amount of time?

honesty, great time management, compassion

I do not know about Texas, but in some states you need to send a form from your realtor to their realtor demanding performance on the contract then if they do not preform you can cancel the contract for nonperformance and have a clear path to sell the house with out her being able to make a claim against the title.  Might be important in case she tries to withhold the deposit by threatening that the contract was not cancelled correctly. 

In CA they are very lucky that the government did not sieve the property for excess drugs.  They easily could have!  Must be is a very liberal county.  Owner should not complain considering the other options the police had.

I don't know you, your personality, how you like to work, e.g. alone, with groups, teams, etc. so what I think may not apply to you, but since no one else has answered I will.

I am VERY hesitant to join into a long term financial commitment with someone I do not know very well.  Once you jointly own a home neither you nor she can just sell it or decide anything about the home by yourselves.  

What if she wants to refi and pull the money out for another deal and you want to pay down debt for another purpose.  

What if she files for bankruptcy and now your home that you do not want to sell and can not afford to buy her out is going to be sold?  

Will one of you want to be cautious and replace a failing roof before it leaks while another will want to patch it over and over and take a risk of it leaking?

It takes a lot to be successful with a partner. Look at how many marriages fail. And with your proposed partnership, she wants your access to long term, lower interest loans than her available HML, and you want her knowledge, not a good basis for along term relationship. Your money will eventually run out and you will not need her knowledge as you gain your own, a break up is coming eventually.

Personally I do better with being in charge, managing my property myself and hiring out the work I do not do myself.  The carpenter I use would love to trade his work for a piece of the action, but I am not willing to give my money up long term to him when I can hire someone and keep the profits.

I look at what you have proposed as giving up your money long term for a 'lesson'.

I would recommend not making a partnership, but to learn from the rehab process then buy the house yourself or walk away with the knowledge and leave the house.

Wow, you lucked out!