All Forum Posts by: Matt Nico

Anthony, I dont think that buying a single family or mulifamily house has anything to do with DTI. They will still calculate it in. In this case your DSCR is $1,200/$370 = 3.24 which is much higher than what you need. I'm assuming your $370 does not include Taxes or insurance so factor that in.

Also lenders do not "project" your DTI. They calculate it as what is is, and then deduct the mortgage will be if you buy the new property from what your DTI is now. They will not ever include that rent in there at first until you have a 2 year history.

 Hey Anthony,

I have similar problems as you. My wife and I owned 3 rentals all cash flowing very well, but some lenders dont like to count the rent but always count the mortgage, especially if the home does not have 2 years of rental history.

I would look for a lender that does a Debt service coverage ratio loan. To my understanding, as long as your rental is above 1.25 or so, they should approve you. The other route you could take is to find seller financing. Even if the SF deal is short term, you can buy it and then refi out of the seller financed deal. I am in the process of that exact situation.

Hope this helps,

Matt

Thank you for all the comments everyone. 

So this whole situation is over now and I will explain what happened:

Long story short, the contractor began pulling permits without a signed contract. I had them stop mid process. It was $700 for the GC permit and $600 for plumbing and electrical separate. So $1,900 total. 

I ended up paying them $350 for the hours of work they put in to the project, and that was the end of it. They did communicate with the county and I confirmed this with the notes in the permit, so they were doing work. I felt a small settlement of $350 was fair as this contractor has done 2 jobs for me in the past at a low rate. 

Thanks,

Matt

 Hi Meredith,

I have been using cozy for a while now and I have never actually posted a place for rent on it. I actually just use FB marketplace like you suggested you should do.

Your post looks good with 1 exception. I would remove the "100 year old" part. I'd just go with something like "Newly renovated Home". Saying a house is 100 years old sounds kind of creepy. Just my 2 cents.

Good luck with your rental.

Happy Housing,

Matt

Kyle,

I live in Florida, and all of my tenants are on month to month leases. I would recommend calling a lawyer and having them create one for you or at least critique one that you make. If you just steal a copy of someone else's you wont understand a lot of things in it. There is a lot of jargon and re-wording of things that my lawyer put in to add additional protection.

Hope this helps,

Matt

Best thing I know now than when I was beginning is to be "firm but fair" with my tenants. In the beginning I treated them like my friends. Rents would be late, I didnt enforce late fees, people made excuses, and my house would get messy fast.

Now I am much for firm and I tell everyone who moves into one of my houses the rules in plain english. I also explain what will happen if they dont follow the rules.

 Hey Sharon,

I used to use venmo when I had 1-2 properties. After I got 3+ I switched it to be on a site called Cozy. It collects rent for you and its pretty convenient. I have Cozy linked up to a business bank account and then quickbooks online hooked up to that. I would say if you are living in the garage apartment, I would self manage. Paying a property manager to manage that seems a bit overkill. Plus doing it yourself will give you a good introductory feel to what property management is like. It could help you in the future if you have more rentals.

Hope this helps,

Matt

 Josue,

No actual work was done on the property. I was told verbally that permitting fees would be $600-$700. As in plumbing, framing, and electric are all under 1 main permit, which I pay the contractor to pull for me. But before we signed anything (which we never have), the GC took the plans and description of work and submitted the permit. Then they subbed out the work and paid the plumber the $600 fee they charge to pull permits. So what I thought would be $700 for permitting turned into $1,900. So I told them to stop immediately.

Hey everyone,

I'll be brief. I recently had a General contractor come see a project of mine for work. Scope included building a couple walls, some light plumbing work, and a high voltage electrical wire for a dryer. We discussed the initial process of getting the permits, which I was told verbally it would be a fee of "$600-$700" for permitting + the county fee. I already had all the paperwork and plans drawn up.... The GC just had to submit them.

A couple days go by and I ask for the contract to sign so we can start the work. I was told that the permits were already submitted to the county, and the CG had already paid the plumbing contractor. I finally get the contract, which says $1,900 for permits. $700 for the GC permit, and $600 each for plumbing and electrical. I'm then told that the work the electric and plumbing contractors will do will be "Between $1,100 - $1,500".

I tell the GC this work should not have happened without signing the contract and to stop everything immediately. The CG is now requesting I pay the $700 for their fee for submitting permits and to pay back the Plumber who also filed a permit.

There is no signed contract between us, but the contractors did submit the permits.

Do I pay this or not?

Thanks in advance for input.

-Matt

 Hi Alice!!!

Thank you for that information. I'm actually surprised its that high in the 70% for occupancy. You must be doing something right. Are you just the property manager for these places or an owner as well?

I agree for sure. I think if the Covid situation continues we could be in for a buyers market. I doubt prices for homes will dip that much, but anything is better than nothing.

Thanks for replying,

Matt