All Forum Posts by: Mark Payne

Another Expat here, Hong Kong. I own two SFR's in Memphis. One was our family home and we just recently closed on another this past June. I was turned on to BP by a coworker who also owns US investment property.

401k loan is another option. The interest rates are typically low and you pay the interest to yourself. In my experience the loan terms are usually 5 years max. So you if you could find an investment (Midwest maybe?) that you could pay cash for using the loan, you'd have it paid off in 5 years. Just in time to sit back and collect the cash flow without having to worry about debt service. Everybody has different goals, but by the time I'm 59 I'd like to have plenty of cash flow and little debt, even if the ROI is lower. The equity would be passed on to my kids.

I am not a retirement planning expert, it's just an option that may or may not work for you.

Flagstar Bank in Michigan.  In June I closed on a $28k 30 year loan.  

That information helps.  A wife with a car, little money in the bank and looming shipping costs for the second car.  My opinion only, but I would certainly look at paying the difference and getting rid of the car (payment).  If there is any way you could do it with cash (loan from a relative maybe) that would be my first choice.  I would also try to sell privately, maybe to another person on base.  The dealer will take you to the cleaners, especially if they know your situation.  If you get a better price selling it yourself you're even better off. We had a signature loan through Armed Forces Bank at one time and it didn't negatively affect our good credit.  As long as the loan is in good standing it should be fine on your report.  However, if opportunity presents itself your debt to income ratio will be much better with the small signature loan than it will with the car payment.  You could then take the $300+/month your saving and knock out that loan in short order.  

Unrelated to your question....Try to use your VA Loan entitlement to house hack. It's such a great tool for building wealth while you serve. I wish my wife (Navy) and I had, but we didn't.

Go into debt to get out of debt?  With the right numbers it could work.  But you have too many variables right now to make the "right" decision.  I used to live in Alaska, without a car for the first 3 months too.  Was a bit of a pain in the a** getting to work and such.   So if you sell it and get a loan do you have somebody willing to help you get around?  Maybe you have better public transportation than I did.  If your next duty station doesn't allow for a car, then the decision is made right?  You need to come up with $5k and sell the thing.  If your next duty station requires a car, will your $5k loan keep you from saving enough between now and then to buy another one for cash?  Taking a small hit to get rid of the car may be the best thing, but I wouldn't be in a hurry just yet.  Find out where life is taking you before you decide what you need to bring.  Thanks for your service!

I have had mixed results, all with American Home Shield.  The warranty was in place on our home when we bought it.  Our house was built in 1993 and has has it's original HVAC system (3 condensers and 3 evaporator/furnace/air handlers).  The home also has a pool with it's original equipment (2 pumps and a filter).  We also have a roof that's nearing the end of it's useful life (not covered by the warranty).  We took an overseas assignment and began renting the house, so the system updates were put on hold and the warranty was renewed.  Using the warranty I've had the following replaced/repaired without issue:

1 of our 2 water heaters replaced

A Dishwasher Replaced

An in-wall water leak repaired

Pool filter (sand) refurbished

Cracked Water Pipes (Pool) Replaced

Evaporator Coil Replaced

2 Furnaces Repaired (Make sure your filters are clean or they'll reject the claim for lack of routine maintenance).

Where they really suck for us is Air Conditioning equipment.  They obviously do not want to replace a condenser so every time we get a call on one (at least twice a year), they just clean it and top off the coolant.  They limit the coolant covered by the warranty and rip you off on the extra.  So much so that we've stopped calling them for HVAC maintenance.  We usually get the system repaired for less than half of the co-pay and coolant charge combined.  If our guy ever says a unit is toast, we'll then call AHS and push them to replace it.  Also, they own Greenway Home Services.  So, for general home repairs that's who we get, at least in Memphis.  They suck.  Our experience with every other contractor that works with them has been great.  But Greenway sucks.  Did I mention that Greenway sucks?

I really haven't done the math but I think we're hovering just below the break even point with the premiums.  It's pretty much a policy we keep in place in case of multiple failures of expensive systems.  We have upgrade plans in place, and when we're done, we'll cancel the policy.  I can't really recommend a warranty, but I can say it's served it's purpose for the most part.

Hi All,

I'll try to keep this short. I live in Hong Kong but purchased a SFR in Memphis, TN from the property manager who also rents out our family home near Memphis. Most of the concerns one might have investing from the other side of the world weren't present because the property manager is also a family friend. I also purchased this house with a partner. We would like to buy more together but wanted to test the partnership waters with a smaller investment. Costs not included below are the organization costs of our LLC. I'm trying to be conservative with Vacancy, CapEx and Mx. Let me know if you folks think I wasn't conservative enough. Really trying not to be long winded here so if your interested in more details just ask, I'm happy to answer.

Cheers,

Mark

House Info:

"C" Neighborhood

3 bed 1.5 bath w/ separate laundry room.

Brick Veneer, Metal Roof in excellent condition.

Money:

$38k Purchase Price

$10k Down Payment

$4,681 Closing/Acquisition Costs

$28k Financed @ 5.16%, 30 years.

Rent $691 (Section 8)

Monthly Expenses: 12.5% Vacancy, 10% CapEx, 10% Maintenance, 8% Management, 11% Taxes, 9% Insurance, P&I 22%.

Monthly Cash Flow: $118

Projected CoC ROI 9.66%

I live in Hong Kong and just closed on a SFR in Memphis a few months ago. Your Hawaiian deal sounds similar to mine in that I was working with people I knew and trusted. Where's your US "Home?" Do you know anybody there anymore who is involved in RE in any way? We moved from the Memphis area to Hong Kong two years ago but non RE relationships blossomed into investment opportunities that will likely continue to bear fruit in the future. The Japan meetups sound like a great opportunity, I just thought I'd throw another idea out there. Good luck!

Cheers,

Mark

Long shot but thought I'd throw it out there. If you have an American Express you can redeem your points for Home Depot gift cards. We put everything on ours and over the years we've cashed in enough points for about 10k in HD cards....just put a new dishwasher in our only rental a few months back in fact. Also, as previously mentioned you can't beat the HD 0% interest offers, especially the 24 month option that comes in the mail every so often. Good luck!

I've repaired termite damaged hardwoods before. It was our first home and we gutted it to the studs and did all the work ourselves. I'm pretty handy and I replaced about 150 linear feet of 1.75 inch planks. Because that width is not common I had to rip, bevel and groove each board. That's in addition to cutting out all the damaged wood. It was an immense amount of work (at least for an amateur like me) and it required precision to make it look seamless. Maybe my math is off but $500 more for a floor that will last another 50+ years to seems like a fair price and a good investment. As for Allure....we used it in a bathroom on the subfloor (over a water proof membrane) and a laundry room that was concrete slab. It looked and functioned awesome in both rooms. The bathroom was a light colored bamboo and it received many compliments. Most thought it was engineered flooring on first look. Don't know if the economics would work but you could put Allure directly over the hardwood if it's cheaper than refinishing and the floor is structurally sound. I wouldn't, but you could.