All Forum Posts by: Matt Vogt

Is there something awkward about the house's layout/design/materials used in the rehab? If comps are selling for what you're asking, maybe they really aren't comps. Are you objectively looking at your property versus what is currently for sale/recently sold? What is the general demographic of your city, is this a small niche at 500-600K, or is there a large pool of potential buyers? 

Does it have laminate flooring rather than hardwood, a granite-tiled counter rather than solid slab, a fiberglass tub rather than tiled.... etc.

Here in Denver, a 500-600K property is a touch above average, but back home in Rochester NY that would be WAY above the average, and would thus limit your selling pool. 

Refinance costs would also be a factor to consider. I assume that origination costs would remain the same regardless of an ARM or conventional 30 year fixed. So to your point, if you did an ARM and re-fi'd a few years later, your refi costs would likely offset any interest savings.

Generally, without comparing specific costs/rates, I believe you're much safer doing a fixed rate loan and only originating one loan than you would be with the ARM/refi method.

It's going to depend on your credit score(s), debt to income ratio, and what loans are available to you. I would meet with a few bankers, discuss the situation, and see their suggestions. Depending on how much you currently owe vs what they are worth, your credit, cash availability, and debt-income ratio, you will have varying options. 

The 3 F's - Family, Friends, and fools... and investors. Find some investors and pitch the idea.

Depending on the year/model, a CBR can be worth a few thousand dollars, even in the condition you described. Sounds like a reasonable process to get rid of it, hopefully the guy just disappears and leaves you with the bike after filing for the new title... then you can throw it on Craigslist and get some money for damages out of it.

Best of luck

Anything is possible, however it's not likely for rates to continue decreasing, especially not in the long run

The pro of an ARM right now is that you can save a few dollars on interest, however the negative is that you'll be far more exposed to rate changes in the future. I would think that an ARM has no place in an investors toolkit at this point in time. They are useful when rates are high and you're expecting to re-fi or sell before the term is up. If you're planning on selling in 2 years, maybe a 3 year ARM would be a reasonable thing.. anything besides that probably should be on a fixed rate mortgage to keep a currently profitable investment from becoming a headache of a property that's hemorrhaging money due to climbing interest rates.

If the partner is a good friend of yours, the answer is simple... pay a reasonable amount for her services, take it as a lesson, and clearly define these things in the next deal. You're still making money, but in my eyes (and many others), it's not necessarily a fair deal on your side due to the higher financial contributions/stake in the game. 

As for paying your family interest, you absolutely should do that even though they didn't ask for it. It's the right thing to do, and they came through for you when you needed them to... pay them rent on their money and keep the avenue open for future projects. 

Deals can be a one-off, or you can have continued relations with those you do business with. Take this as a lesson learned and move forward, with your friend making out slightly better than you. 

The alternative option is to fight it and ruin a good friendship. I somewhat question your 'friends' view on the situation though, on the flip side, I would be eating my wifes' design fees and would pay for them out of my share of the profits... again to preserve the friendship/relationship. As he's unwilling to do so, I question his friendship/loyalty. 

Best of luck.

So the ROTH IRA should probably be used as a last resort. You can pull out any principle you've invested (after 5 years I believe) without penalty, but this should be a worst-case scenario IMO.

How much is the property you're looking to buy? Maybe get a line of credit from the 1st property and use that plus your current line to buy the next. Then open another Line on the new house to use for an emergency fund. I would think that you're best to conserve your cash, as there will always be cash needs.

The bottom line though, it depends on how much debt you're OK having, what rates you are getting (both on your cash, and your borrowed funds), and what you're looking to do in the next few years.

Pictures are worth 1,000 words...

What you need to do is look to see what your ideal tenant is, and what they are looking for. What rent are you looking to charge, and what amenities do you need to get that rent/tenant? Flooring (newer carpet/tile/laminate) are good choices, fresh paint on the walls, and decent counter tops are probably a good start. Also, are the bathrooms decent? Get the units done to get tenants in to stop your cash hemorrhaging, make them decent but not over the top... you can always add upgrades later upon turnover.

I lived in a situation like this where it was VERY similar to my college living experience with a few differences. College, I was better friends with the people I lived with, the post-college experience was more random, and my group was all kids aged 18-26. Obviously this situation isn't ideal for most people... it worked out for me because rent was CHEAP (~350-400/mo with utilities), and location was perfect (1 mile from work). I saved a lot of money over the year I lived there, as did one of my roommates. The issue is that most people aren't doing that to save money... they are doing it because they don't have other options. I lived with a few kids who were barely scraping by, were total pigs, and were basically totally irresponsible for themselves and especially the house. 

I moved out 6 months before the remainder of the group, and no longer maintained it (as it was no longer my responsibility), and when the lease was up the place was totally trashed. We're talking a 4' high lawn, trash everywhere, nothing washed, mold in the bathrooms, kitchen repulsive etc. Basically just a disaster.

We split extra expenses evenly, even the $400/mo x3 months of water due to one persons bathroom leaking and them not realizing it (IDIOTS). I saw the bill and instantly replaced the internals to fix the problem and stopped the waste.

You'll make more, but the headache is going to be far greater than renting the whole unit. There was also a heck of a lot of turnover. I lived with 9 different people in shifts of 4/5 over the course of 1 year... one room turning over each time. It was total chaos, and I wouldn't ever rent something that way, unless you had a bunch of friends living together (college type situation).

Good luck.