All Forum Posts by: Millie D.

I have a potential tenant--excellent all around except she has a judgment on the background screening. It shows the date and a "release" date. Judgment is from 2008, release date 2010. Does that mean it has been paid off? The judgment is for a credit card debt.

This is the only blemish on her background check. All other factors are good--salary, job stability, references.

Thanks!

PS I believe Crescent is an Atlanta mortgage company.

Fannie Mae will finance up to 10 properties to the same owner. The requirements become a bit more stringent after the fourth property. For example there are greater reserves required, no cash-outs (only "limited" cash outs). So as long as your friend has less that 10 financed properties, they could go through Fannie as long as they meet the underwriting requirements. The hardest part of the FNMA 5-10 properties program is finding a broker/lender who will do those loans. Stonegate and Crescent Mortgage both used to do them.

Hi Michelle,

I have a very similar property to the one you are looking at. It's a triplex, 2 of the units are 1/1, the other is a 2/2. Total income is $1800. We pay for water in 2 of the units, total approx $65/mo. "Wall" heat as you call it--do you mean electric baseboard heat or similiar? That's what we have in the 1BRs. However, I am in Charlotte NC area, not CA.

I know whether or not I would make this type investment again. But before I answer, can you answer a few important questions?

• What is the age of the building and when does it appear to have been last updated?
• What will your monthly taxes be? 
• What term of loan are you thinking of? Have you begun the lending process? 

I am interested to hear from others, how many pets do you allow? Does it vary according to type (dog vs cat, dog and cat, ferret and snake, whatever...), weight etc? Does it depend on the size of the unit? If so, how many for a studio vs how many for a 3 br? 

What guides you in your philosophy and rules about your pet limits/policy? 

Do you require vet papers?

I guess the question may be more of, what is your pet policy? But only looking for answers from those who do allow pets, not from those who don't. Thank you and looking forward to reading your responses!

@Paul Ewing

What I find most annoying isn't the wholesaler, it's whoever was dishonest about buying it as an owner occupant. If they bought it from a government agency, they had to sign an affidavit that they would live in it for a year...An affidavit! How can people boldface lie on an affidavit? And at the same time undermine some family's chance to own a home at an affordable price? To me, this is where "investors" really get--and deserve--a bad name. When making money overrides ethics. I would be tempted to go straight to HUD. Or call the owner directly and remind them that there is a $10,000 fine for lying on that affidavit (depends on the wording of the affidavit), not to mention probation or jail; tell them you'll be happy to call HUD or FNMA or whoever originally sold it and let them know what's going on. You played by the rules and saw that property snatched out from under you by a dishonest person. That's what's wrong here.

I agree with @Jesse T., what first jumps out from those numbers are:

• the insurance, which seems too high 
• utilities--why would the landlord pay utilities on a SFH? or is this a duplex?
• closing costs--$3K is a lot (too much) on such a small financed amount

That being said, what really jumps out is the rent! Subtracting for utilities and adjusting the insurance number, you're getting nearly $1300 a month on a house worth 79K completely rehabbed? Where is this? If I ran into such a deal in the area I'm in, I'd jump on it!

I would add as a word of caution, that 203K loans are not cheap. If you had planned on making a profit by doing renovation work yourself, 203K won't work. 203K requires you to pay thousands of dollars in professional services that you might otherwise not use. You are required to hire a 203K approved contractor, approved 203k consultant, etc. The additional cost is at minimum several thousand dollars. For example, if you approach any bank that offers the 203K product, they will tell you upfront that their is an additional set of fees, which they ballpark at $5k. And that is not including the additional cost of the 203K general contractor--more $thousands.

And it goes without saying, if time is of the essence, a 203K poses a very serious risk to losing a contract.

I believe there is a diary on BP by someone who tried to use a 203K to purchase a property. They nearly lost the contract and ended up using private money to close.

Then again, if you do not have the down payment and cannot get a private money loan to get it, then your choices may be limited and 203k is your only option if the home requires work that prevents you from getting a traditional mortgage.

Good luck in your endeavor.

Hi there,

We have several properties, some that have been financed at different points in time, some free and clear. I'm looking for a spreadsheet that project the equity, debt, and net worth growth over time. It would take into account each property's current and future value. Future value calculated based on a variable input, so I could select an aggressive or conservative rate of appreciation. In addition it would need the ability to input each property's financing--starting year, principle, interest, term. 

I'm working on creating this spreadsheet and it is a bear. I have a feeling I'm not creating it in the most efficient way. Then it occurred to me that probably this type of spreadsheet or tool already exists and who better to ask than the BP clan? 

SO, does anyone know if such a spreadsheet exists and where I might get my hands on one?

Thanks!

This is why rigorous screening is so important. Just based on experience, I would guess that if you do a rigorous application check you will find plenty of facts that confirm your gut feeling. However if you check all four applicants and all four have stellar rental references, excellent pay history, always leave the place clean, and pass all your other requirements, etc, then your gut feeling may be wrong. I'd be thorough and probing and ask open ended questions when speaking with other landlords. When all applicants seem equal, it would be good to have a point ranking system and deadline to apply so that you are not trapped taking the first applicant. If you have a ranking system, then you have a better gauge for tenant selection. But again, if you are rigorous in screening, and they come out shining, why not rent to them.