All Forum Posts by: Matt Liu

But if I really wanted to have "boarders" and give them their own kitchen/bathroom, separate entrances, etc. can I legally restrict them from using my floor of the house? Would it be via a "house rules" agreement or can I just say in the lease what area they have access to.

So just to recap, I want to actually avoid doing ammortization, and should prefer INTEREST ONLY for about 5 years, and at which point, there should be some equity to refi and pay off the family loan.

That is a GOOD lesson for me. I realize now that an ammortizing loan at a high rate is very expensive! When it's a high rate (as in private money) you want to do just interest only 'till you're able to refi out and use conventional (cheap) rates instead.

Let's say you buy a single family as an owner-occupant, with the goal of having a couple renters to defray the monthly bills. But let's say the town does not easily allow conversion from singles to multis anymore. Can you install a kitchen and bathroom in the renters' part of the house, and even have a separate locked entrance to their area, perhaps just the whole upstairs for example?
Can you even have in the lease or "house rules agreement" that they cannot come into your part of the house? Or do i not have the power to designate which area a "housemate tenant" can and can not go?

You make a good point. Okay, I'm sold on the 3-5 year family loan, and will try to pay it all off before using the cashflow :)
I'm thinking I may I borrow 20k and in 5 years pay back say 25k. That means I will also have to tuck away 5k every year, which is almost all my cashflow! Oh well.

Roy, very good question. The property I am buying is in a flat market. So the only way I can refi later to totally cash out my family, would be after a good 10-15 years of mild appreciation and ammortization of the bank loan.

Well if I took all of the net cashflow over the next five years - yes, I would be able to pay the loan off. But I was counting on that cashflow for other things.That's why I'm wondering if it's normal to set up the private loan for 30 years or 15 years amortizing, so that I gradually pay it off, and still have monthly income the whole time :)

The family member is flexible. I just am worried that I won't be able to come up with the money to return the principal in 5 or 10 years even. So I'm wondering if ammortizing it is a good way to go for me to slowly pay it off.

When borrowing a smaller amount from family, say 25k, for a downpayment, is it at all common to do a 30-year ammortizing loan? If so, what rate? Is 7.5% 30 year ammortizing reasonable? I want it to be attractive to them and at the same time affordable for me.

I'm wondering, let's say you buy a house with an owner-occupant loan. Then 1-year later, you move to a new house and rent out the first one. Do you have to change the first house to a non-owner-occupant type of loan?

A deal came my way that is a mixed property - 4 residential units plus 1 used furniture store on the ground level. I know how to evaluate residential units, but for the furniture store, my concern is that if they ever leave, I will not know how to fill the unit again. How might I do due diligence on the financial stability and long-term tenancy-potential of this furniture business? Anything I should watch out for?
Thanks!