All Forum Posts by: Nicholas Zumwalt

@Robert J. I live in cottage Grove and am just starting my adventure in the Real Estate Investing. I am more intrigued in regards to Buy and Hold but would love to meet up one day. 

@Jason J.

Tell her that you have to do a smoke alarm test every 6 months, as well as, a water check. This assures that you get into every room of the house (or should, our local code is smoke alarms in every room and every floor) and then checking for leaks gets you into all wet rooms.

This shows her that you want to keep up on the maintenance of the house and her safety is on your mind without putting her on the defensive about you not trusting her.

I personally would not look at selling this property until I have identified the next property/properties; just so I would not lose the $360 cashflow. Since it sounds like you are in the military, have you thought of refinancing to reuse your VA Home Loan? Or you could even use an FHA loan even though you would have to worry about PMI at that point.

The VA Home Loan option appears to be a double edged sword, but from my limited knowledge and experience, it can be a valuable asset for a beginning Investor such as myself.

The issues that I do see is that, since you don't need even 3.5% for a down payment, you have to negotiate a better deal to factor in the larger loan amount.

The other issue is that I have noticed is that, even though you don't necessarily have closing costs, you still have those costs wrapped up in the loan amount. For example, my current residence I purchased at $267,900 but had to finance just over $273,000 due to those costs, which immediately resulted in a higher mortgage (granted not by much)

Now the obvious Pro's are that you can get into a property with no, or low, money down but that does restrict you in the sense that you may not be able to get that $400,000 duplex, instead having to look at the $320,000 duplex around the corner that needs more work or worse tenants. Which is fine by me but not for everyone. 

The other Pro is that you can use your VA Home Loan more than once, as long as you have the equity in the first property to refinance it into a conventional loan. Now this is awesome because you can essentially "house hack" your way into investing with minimal money.

Not sure if most realize this either, you can even bounce between the VA Home Loan and the FHA Home Loan. This is nice because, if you don't have the 20% equity in your current residence to refinance out of the VA Home Loan, you can move into your next "home hack" with the 3.5% and still be able to "house hack" that following year. This strategy allows a potential investor to get into their first few properties with very minimal money.

The other thing to mention is the condition of property that these loans qualify for. These loans have to conform to Fannie May/ Freddie Mac requirements, but they are also a little more strict. Such as, subflooring can not be exposed and no chipped or peeling paint on the exterior. So while these can be used for light to moderate rehabs, they can't be used for that extreme flip with holes in the floor or missing sections of siding.

While I feel like I have a decent understanding of VA Home Loans, and personally feel that they are a great tool, I would like to know if there is anything I may have missed or don't understand completely.

Thank you for any and all feedback/advice in this regard.

@Tyler Battaglia

Always get a professional home inspection. A home inspection report is beneficial in the fact that it will help:

Identify building defects

Outdated code defects

Building materials

Age of appliances

This will help with any budgeting, as well as, what should be upgraded (old cast iron DWV system vs. ABS etc.)

In regards to partnership:

have it clearly written and agreed/signed upon by both parties the rules and responsibilities (including payouts), also make sure to discuss what happens in the event of default, deathor distress. Most people hate talking about that but it is a possibility.

@Alex Smith

Congratulations!!

you can take those classes or just watch YouTube. If a woman and her kids can build a house off of them, we can learn to do a few tasks ourselves. 

In regards to owning them free and clear, that all depends on your business model. There are some buy and hold Investors that don't keep property longer than 5 years. It may depends on what you want. 

In regards to flips, you don't have to do the work yourself. Find a good contractor and partner with them or just use them on your projects. You want to work ON your business, not IN your business.

Hope that helps. 

@Paul M. Bosse Good morning Paul, I don't have much input on this other than looking at the rules of the park. Some parks will have a clause in their paperwork that states you can not sub lease or rent out your residence. Other than that make sure that the homes have an anchoring system in the crawlspace (if required in your area) and they have the proper tags on all seperate section of the residence.

@Mike Larry At this point it sounds like your in a holding pattern unless you want to keep finding great deals and wholesaling them to get more capital. I would recommend putting some sweat equity into both properties and force some appreciation, then in 6-12 months you could either refinance the equity out of the new properties or do a HELOC and use that for another property or 2.

@Aaron Christen Good afternoon Aaron, So I was looking at your budgets and noticed that you have only 1% dedicated to your CapEx. I also noticed that this building was built in the 100's . I personally would dedicate roughly $50 per door or 5% (whichever is higher) to CapEx unless the building has gone through a complete remodel recently. Hope this helps a little. Nick