All Forum Posts by: Michael Hill

Quote from @Timmi Ryerson:

Smart Property Systems. It is full service and priced for investors with only a few properties.

 Thanks! 

Quote from @Timmi Ryerson:

The biggest mistake I see new landlords make is trying to be a friend to their tenant.  You are not their friend.  You should always be polite but this is strictly a business relationship.  They pay you rent and you let them use your property to live in.  No rent out they go.  If I have an issue with late rent, on the 3rd day I send them (through my software that links to their account portal) a 3 day notice to pay or vacate.  If they still do not pay, I file the paperwork for eviction. 

In my lease agreement I explain that if I am required to file for eviction, all costs will be born by the tenant.  That includes the cost of service and filing fees etc.  If they pay rent but it happens again, I give them a 30 day notice to vacate.  In this case, I would include the 30 day notice to vacate with the eviction papers so if they pay rent, they have already been told to move out  Now do NOT back down.  Kick them out!!  and in the mean time, (hopefully you are using software that has easy to use webfyers) advertise for a new tenant.  

You can expect that they will leave the property in poor repair.  So be prepared to do the work by scheduling the people you will need early so you can make the "turn" quickly.  If you can get in to do a preliminary inspection of the condition of the property, do so and take photos.  If there is any destruction by an angry tenant on move out, you will have proof.

 Be sure to use tenant screening for the new applicants.  That should also be easily available in the software you use for managing your property.  Just start with people who show enough income to easily pay your rent every month. (usually about 1/3 of their monthly income)

 What software are you using? I'm definitely interested. 

My current primary residence was a foreclosure. I bought it because I needed somewhere inexpensive to stay during and after a divorce. My intention was to eventually fix it up, buy a second house, then rent this one out. Well it's time. I've already put an egress window in my basement (it's finished) so it can be used as a bedroom (there's a closet and full bath down there too). I've already replaced the flooring and toilet in the upstairs bathroom. I've already replaced the rotted privacy fencing. I still need paint, carpet new linoleum in the kitchen and tub/surround in the bathroom and it'll be ready to rent. I've got a HELOC on this house which helps tremendously. I've got cash reserves and I've begun looking for another house to buy as my primary. I must say I'm very excited but also a little bit nervous to take this next step. Thanks to BP for being a wealth of inspiration up to this point and in the future. I've already paid for a membership at ezlandlord forms and have those documents in order. I've also read the stickies about screening tenants and such. I believe I'm ready. So thank you!

I purchased my current house as a foreclosure directly from Fannie Mae.  It was listed on their site (homepath.com).  My intention was to house hack it for a few years, get past my divorce and buy a second house to live in more permanently and rent this house out as my first buy and hold investment.

I'm about a year or so away from being ready to make my next purchase and I've been looking on Fannie Mae's website at listings in my area.  What I've found are very few (that's not a surprise as inventory has been a bit scarce here, for foreclosures) and the one's that are listed appear to be move-in ready.  This has not been the norm for my area.

Any idea why that is ?  

To be fair, I haven't plugged in any other zip codes for comparison.  You can look at the few in my zip code to see what I mean, it's 46544.

What do you think ?

I wonder if this is why I'm having a hard time finding a foreclosure to purchase as my second house (to live in and house hack for a more permanent residence, allowing me to rent my current house out).

Ok,  that makes sense.  

Thanks for the clarification. 

Originally posted by @Jeremy Pace:

@Jerry GoingThe 50% rule  (or more realistically, the 50% guess) is a way to try and quickly estimate the potential cashflow of a property.

The 'other' 50% contains all of your other expected expenses in one big round blob. Taxes, insurance, maintenance, CapEx, utilities that you (the landlord) pay.

If taxes and insurance are escrowed in with the mortgage payment, then the 50% might be less, is that correct?

I'm in Mishawaka and might be interested. Shoot me a PM and let me know what you have in mind.  

Thanks Mark for the reply. 

My next goal is to focus on paying down my consumer debt to unlock money from my paychecks (which would be quite a bit).  

I'mm not certain about equity to unlock, and at this point with my DTI as high as it is, I'd be uncomfortable doing that at this point. Maybe once my debt is paid down it could be a consideration.

Any thoughts as to how I should plan the transition once I secure the second house?  That's my main confusion at tthis point. Although a flip could be a way to get a bit of cash to pay off my debt.  Also open to other ideas from others. 

One suggestion I'm wondering about (since I purchased my current house directly  from Fannie Mae,  but Fannie Mae had a listing agent) would be to see who the listing agent is and meet with them directly.  I'd be willing to bet they might give you a heads up just as or right before it hits the market.  

The listing agent in my area had several properties listed at the same time, with Fannie Mae as owner or seller.