All Forum Posts by: Mike Johnson

Recently married couple, looking to buy a vacation home down the Jersey Shore that we would also offset the cost by renting out in the summer.  Unfortunately the barrier for entry into a lower-end home is about $1 million now, and property taxes are low (likely less than $5k).

I currently have a financed home with about ~250k in equity (2% interest rate), and we have about ~220k in cash.  Our combined salaries are $275k.  The only debt we have a 20 year loan I took out (16 years remaining) left for home renovation with about $35k remaining at 8%.  My wife has never owned a home.  

Ideally for the home we would put a down payment of $200k, and somehow use rental income to help offset the costs of the home as income.

The town we want to buy a home allows for weekly vacation rentals and has about a 100% rental rate in July and August (rents are usually booked out a year +).  The month of June is close to full occupation however rentals  are about 25% less from the July and August.   The months of May and September do rent out but unsure if they would be at 100% occupancy (so want to exclude them from any calculation).

Its hard to gauge what weekly rentals would be without a having a home but weekly estimate would be for the exact home but my estimates are:

$3k - Conservative, $5k - Moderate, $7k - liberal (July and August), the month of June is probably a 25% reduction.

I live in a 100 year old house and had some sagging floors due to the main beam in the house shifting over its life. Called in a basement company who specializes in this work and they draw up a proposal to install a parallel steel beam in the house, couple up 15 or so floor joists and add and install 3 adjustable jacks to support the new beam in the house. The new beam was actually going to be in the center of the house because the original support was a 1ft+ not in the center. I agree to the scope and proposal and the price of $5600.

So the crew comes out to work, and the lead said the plans do not make any sense. They basically scrap the original proposal and verbally said it was impossible to do because he would need to replace all the floor joists in the house and any lolly columns supporting the house would be useless. We agree to change the plans (to be honest they said i didnt have much of a choice) and the new plan was to add the 3 adjustable jacks to the original main beam in the house and add support by bolting in a few 2 x 6's onto the original beam so the jacks can be supported.

So the work is complete, id say the floors in the house improve 50%. The new scope of work doesnt have a new beam, or any floor joists and I feel was significantly less work than what was proposed and therfore less than $5,600. In my discussion post work the sales guy is trying to say it was less work however since they worked on the main beam it should be more money because of liabilty reasons but is not increasing his price. I want to get some thoughts on what I should do? I paid 50% already and am holding the other 50% currently.

I currently do not own a house, but I'm thinking about purchasing a 1 unit beach property and renting out the unit weekly during the summer months. I don't have 20% to put down, so an FHA first time home buyer loan would make sense. Would this be legal to do with type of loan?