All Forum Posts by: Nate Richards

@Cody Godfrey serve 30 days non-renewal notice immediately when the lease becomes month to month.

If he was already placed when you purchased he's 3-6 months into a lease anyway. It's not an eviction.

@Anthony Gayden, nope. If you reread my post I advise that her spouse not take the loan...

Unfortunately, people become burdened with debts from their loved one's dreams. Some willingly, others find out later. The student will make the choice. The OP will have to live with the decision.

MY advice was to use high cash flow RE to offset her looming debt load.

Others advocated a lifetime inaction. Of trading hours for dollars and still being broke and accruing a ballooning debt that cannot be repaid with their foreseeable income levels.

I don't recommend things I wouldn't personally do. Yes, been into and lived in both C & D class areas. (1) there is nothing inherently unsafe about living in C or D class. It requires common sense, like everything in life. Regarding personal safety, as a general rule people don't walk around with cash hanging out of their pockets even in good areas. That's just called common sense. Frankly, my vehicles and homes have been burglarized more in A+ and B+ class than they ever were in D class.  (2) Nobody should invest in an area they would not live.  Apparently your not paying attention to these forums on C & D class, as it becomes glaringly obvious what the issues are or are going to be without even finishing half the post. Give the OP a smidgen of credit. As previously stated, proper tenant screening and management (online bill pay) will resolve most if not all the issues you assume "requires nerves of steel" before they even start.

So to reiterate, your advice is to do nothing and pay $3500/mo plus living expenses on $30k PRETAX income. The math is genius, pure genius!  Again the risk and debt are both mitigated as she will be an occupant. Even at 25% occupancy its not a negative cash flow line item, as she will ALWAYS require housing. A government subsidized tenant in 1 or 2 units = win. 

If you're in a 12ft hole, is it any different than a 15ft or 24ft hole? Neither can be climbed out of without the aid of tools, and this is no different.

I'm looking (HARD) for an example where doing nothing and willingly losing $1000/month before you even get out of bed, house, feed, or clothe yourself is the "best course of action". Sadly I can find none.

So, your NEVER SUCCESSFUL strategy is to sit on the sideline and do nothing. Got it! To follow up with that winning piece of advice, don't make any investments since she has "NO experience". Since everybody knows, the best way to gain experience is by doing nothing. Noted!

Lets be realistic, owning 300K in debt without the means to repay it IS disaster. She's either already in it or very quickly about to be. If your advocating a break-even deal on a flipped duplex is going to solve or in any way positively impact her current or future cash flow issue, it wont. Full Stop.

The OP needs to cash flow and be proficient at screening and managing multiple units/properties. Anyone with the belief, confidence, and determination to be successful at managing real estate can do this with the assistance of the BP community. With her DTI she'll be qualified to acquire a single property (for the foreseeable future) from which she needs to make a significant dent in her monthly expenditures to enjoy the quality of life she desires. Simply by finding and posting on BP, she has shown the ability to manage adversity and dissect it into manageable pieces in order to overcome it. Same skill set needed to manage a high cash flowing 4 unit.

Yes the OP will undoubtedly make a few missteps along the way, but thanks to a low cost/low down payment FHA qualified loan, and a 25% reduction in risk (she will be occupying 1 unit) it will make her chances of complete failure minimal. Additionally, with the owner on site many condition issues (garbage and curb appeal) that lead to less savory tenants will be discouraged.

OP -  regardless of your decision, you have some work ahead of you. Make the smart choice, not the desired choice, and you wont regret the decision. If that's quitting and working 2-3 jobs for the next 30 years like most of these peeps are advocating fine. If it's believing in your ability to succeed and taking some risk that is fine too. The only right answer is the one you are happy with 2-5-10 years down the road.

@Elizabeth Susan Ademi, seems like a lot of “Negative Nancies” telling you to talk your wife out of pursuing her dream. In your situation I’d personally do the same as they advise,.... I’m debt averse.

However, a $300k loan is (guessing) about $2500/mo (for 20 years). It's NOT difficult to generate that amount of income thru REI and then when the loan payment is offset by rental income you will be grateful.

Look at C or D class 4 units. The price per unit will drop, (but higher total purchase). YES they are labor intensive (tenant turnover) but will cash flow well. Which is what you NEED! Your cash burn rate is high so you need cash flow.... Not a pretty twinplex with the "Home Depot special" rehab already done, but a "handyman special" in a rougher part of town. Step 2 is the twinplex and then the SFR at Step 3,...Step 5 if you're strategy is to max out your Traditional Loans.

Good luck!

I would invest in any area I'm familiar with. I also only invest in areas I would live in. Set your criteria using metrics you're comfortable with. 

See you tomorrow. 

@Trevor W., I know this is an older post, any update on HCMC? I am currently traveling in Vietnam and the potential for success as a vacation rental/AirBnB looks appealing, provided the ability to purchase and manage a luxury apartment remotely is available.

@Dakota Adney, my refi and rental placement overlapped. I had a tenant under contract, they needed 45days to notify current LL and move. During that time the unit was refinanced, which only took 2 weeks to process.

I started/initiated both processes on the same day.

@Jason Dalka, You pose a basic question.

I used to live in the area, and that's an "A" area for sure. May even pull 100k in a straight sale, TBH.

Personally, I rent it, $900-950 assuming it has AC, $800 w/o AC. Then (or simultaneously), I would refinance and buy 2 more for rental purposes. You should be able to get near the $900 rent with a $50k mtg. At +$400 per property net, you'd double the income you'd see from just the single home after taxes and insurance.

But the fact that your family member is going to be in a care facility and possibly supplimented by the state it may not be so simple. The lump sum money may negatively impact the amount the state will supplement for care until all of her cash has been spent. Thus pushing you toward the rental game.

You're now firmly into life planning/legacy (wealth transfer) situation that cannot be adequately answered in this forum. Best of luck.