All Forum Posts by: Jim Stardust

Wait, rent is $1250 and PITI is $1085? How will you account for repairs, vacancies, utilities (if you pay any), legal stuff, etc.? I hope you realize you'll likely be underwater for a long while, right? Not a very good investment, IMO, what made you decide to start with this place?

Anyway, a $1 mil umbrella should be fine. Definitely a separate account to hold deposit and track income/expenses, I don't think it has to be a "business" account as long as it's a separate account from your regular checking/saving.

You say you have good tenants, so there should be some level of trust to allow them to do so. Look at the alternatives suggested by the other posters, all come with some cost to you. They obviously know the area and will have a vested interest in keeping the place in tip top shape so they can get out as agreed upon.

Why not have them sign an addendum to the lease stating that they must find a tenant by a specified period of time, give them some guidelines as far as credit score/income level criteria(and you even throw a comment casually that you'd love to have as good quality tenants as they are) and they will know what would fit the bill. In that addendum, you say they're off the hook if the new tenants meet your qualification and sign a lease by X date. Good luck!

I think you'd be better off with approaching them one tenant at a time, you can send a letter introducing yourself and how you will be raising the rent modestly to account for new operations costs, etc. It sounds like your best bet is to approach the professional first though he would likely be most able to afford a rent increase, the two family units may move out all-together if one of them is forced to move and then you have an extra unit to rent. You may need to offer some incentive to whoever move if you really must move there, it does sound like you have very good tenants.

Look at the record and see if anyone has been a bit flaky with their payment or having other issues. The last thing you need to do is have them form an opinion of you as the new "jerk" landlord that wants to milk them for more money and move in next door.

At 20 years and a year away from graduation, I think you'll have some credit. Have you checked your credit file (free at annualcreditreport.com) or your credit score (also can get free through Credit Karma)?

Are you working now? Do you have any steady income? If not, why not? You can work and go to college at the same time. I may be jaded but I think college education is the biggest waste of money with few exceptions (engineering, medical, law) and I have a post graduate degree. If you're here, it means you're interested in becoming a real-estate investor. To get there, there are some great programs for first time buyers. You stated in your introductory post that you may be teaching, if you're going to be a teacher, there are some great programs, search for HUD GNND program.

Lastly, and to answer your question directly, I think you should be able to obtain a loan if your parents agree to be co-signers. After a year or so, if you have a steady job or if you turn the place into an investment property, you can refinance it into your name.

Depends if you care more about cash flow or building equity and paying it off faster, most everyone here believes in the 30-yr mtg for rentals.

Care to qualify that statement about monster demand for SFH in your area? What evidence do you have and why do you think it's the case?

I don't see an issue of letting the tenants know you're the owner, unless you rent to some psychos or something, you should be fine. In fact, the advantages of them knowing you're the owner far outweigh the risks. If you have issues with privacy and don't want someone showing up at your front door in the middle of the night, you explicitly make it clear to them that is absolutely not acceptable.

I agree with Ann, take a look at your State's regs, most of them have to have something in place by end of June, 2011.

However, there's an exemption if you're trying to finance your personal residence.

As far as the MLS, it doesn't hurt to add it because it will attract a new set of buyers. If it was me, I would have tried to list the property privately or through Craigslist first and offer "owner-financing" and avoid having to pay the realtor's fee. If you decide to take 5 - 10% downpayment for instance, a big portion of that downpayment is going to go straight to the realtor and defeats one of the primary reasons to do owner-financing.

This all depends on the short sale contract is drawn up, is the seller going to be on the hook for the difference to the bank, how much is the property underwater? Does the seller have a lawyer or is he just working with a Realtor or the bank directly? The reason I'm asking is because a lawyer won't allow him to be on the hook for much, he'll advise him to proceed with the foreclosure so they can get the bank to blink. Find out the details and then make an offer that makes sense for you but also has the highest chance of getting accepted by the buyer (and the bank). Your Realtor knows the seller, right, take advantage of that instead of submitting a blind offer.

The national debt is just part of the big picture. The Fed, money supply, commodity prices, employment situation, and global events all contribute to inflationary (or lack of) pressures. I just don't see how we're going to see any inflation when employment is at 10% and there are no wage inflation to be expected for a long long time. Oil and other commodities (Gold included) have been going up because the Fed has been pumping money and buying up paper, the money had to go somewhere, and it went into the equity and commodity market, and drove the dollar lower. But look what happened in the last few weeks as big money is setting up for the end of QEII. Oil is falling, commodities have plateaued or started to fall, the dollar is strengthening, and treasuries continue to rise. Where's inflation going to come from? Wages are stagnant and will remain so for a long time. GDP is stagnant. Dollar-denominated commodities are not going nowhere as global uncertainties continue to seek haven into our dollar and treasuries.

I actually do have some faith in our political system, it's true politicians are avoiding making the tough decisions leading into the 2012 elections, but they all recognize we have some major problems so after 2012, whoever is President, there will be some agreement on a debt-reduction plan that should put us on a better track forward. There's a completely different mentality now and they all know it. I don't buy the gloom and doom scenarios, I don't think we'll ever see high (let alone hyper) inflation in our lifetime.