All Forum Posts by: Michael D.

J Scott, why can't he assign the contract?

Who is paying the utilities like water, garbage and sewer? Are you sure?

Management is an important expense, regardless of whether you're doing it yourself or not. I hope you're not.

How much have you budgeted for maintenance like the pest guy when there are roaches, refrigerator breaks, roofing cost?

The type of mortgage you get shouldn't affect the deal, but it does affect your cash flow and ability to weather rough spots. You should try for a longer amortization if you can.

Yep - the step-dad is the best thing you have going for you.

You need to figure out where you are adding any value. You don't have any money or experience, and it doesn't sound like you've found any awesome deals that nobody else knows about.

If you're looking for financing, the right way to approach it is to show the profitability of the deal. Put together a nice spreadsheet that breaks the whole thing down - then show it to your step-dad and ask if he wants a piece. If not, maybe (certainly) he knows something you don't. If so, you'll know you're on the right track.

Debbie Steinman,
You didn't say that he's asked for an application, so I don't see any reason why you should give him one. I would ignore it until he contacts you again. If he does ask for an application, you can invite him to come over to the unit to pick it up. Don't forget the application fee.

In the meanwhile, I hope you're doing everything you can to solicit applications from others.

My guess (as Bienes Raices alluded to) is that his application won't pass muster for some reason anyway - on the off-chance that he actually asks you for one, pays the fee, completes it in full, and gives it back to you in a timely fashion. In any event, you can always cite his prior record of trespassing on your property as the reason you don't want to rent to him.

As a back-of-the-envelope example, I calculate that if interested rates go up one point, your note drops in value to around $390,000. That's a $45,000 loss in note value from a single point change.

The 30 year term is a killer. I would much rather take a lower price - even $55k lower - than agree to that.

Why not just ask for a balloon in 5 years? That's plenty of time for him to get regular bank financing.

Once you have a property that is NETTING $600 per month ($1000+ actual gross rent) you won't have a problem selling it to an investor for $50-70k.

The houses where I want to live all have very low cap rates - and are therefore not very appealing from a BP-like investment perspective.

So I rent a house where I want to live while I buy real estate where I think the investments are good. Works for me.

I'm in.

I won't be the best expert, but I'm a great communicator and can contribute by editing.

Well, to sell it you're going to have to come out of pocket $35-40k. The rent covers the mortgage, but I'm guessing you lose $200/mo in repairs and vacancy - but you know best in that regard. And there's the aggravation of being a landlord to consider as well. I assume you manage it yourself.

Is it worth spending $35,000 to rid yourself of a $200/mo drain plus aggravation? For me it wouldn't be. I'd keep it. Plus you get the principal reduction as well - another few hundred in your [paper] pocket each month.