All Forum Posts by: Raphaela Todd

One red flag to me is that both of the tenants have more than one job each in order to pay their bills.    Is this property in a bad area?  If so, don't do it.   This can spell "Trouble" for you in countless ways.  My first concern is always the location. If I were you, I would take some time to drive around this area to see what's going on.

Hello Biggerpockets Family!

Today a friend of mine "Sweetie" asked if I might be interested in a possible deal.   Her elderly next-door neighbor of many years (they're great friends) ("Seller") has a Reverse Mortgage ("RM") on her home.   I don't have the firm numbers yet, but for my friend's recollection of conversations she had her elderly neighbor.   She got the RM for $300K right before the recession hit about 2006.   Sweetie thinks the house would probably go for about $189K today, but not sure.   House is in great condition, with taxes fully paid and no additional liens.

The Seller has already vacated the premises about a year ago as she needs to reside in a nursing home.  Because it's an RM, and she didn't know how long she would need to stay in a nursing home.  It turns out, she needs to remain there, so she will be contacting the bank soon about her leaving the home.    Aside from physical ailments, she is of sound mind.

Sweetie wanted to give me a "heads-up" on this property before the Seller told the bank that she moved out of the premises. 

I happen to know that a RM loan becomes due upon the homeowner dying or moving out of the premises.   

I asked Sweetie to first talk with the Seller to see if she's interested, and if so, to provide me with: the address; how much she borrowed; the current pay-off amount; any other liens; and any needed repairs.      She said she will do this by the week-end.

My question is this:  If the numbers work for a good deal, (using the BP Calculator of course!) as this is a RM, would I still contract with the Seller to make the purchase ... or contact the bank directly?  

Would really appreciate input from anyone who has done a deal involving a RM ... or knows more about it.  Thanks very much for your expertise!! 

@Brian Gibbons Thanks very much for the advice!!   I will do this, and let you know when I get my first deal.      Much appreciated.  :-)

Hi Robert:

Sorry for the slow response, I've been extremely busy!  Looking for investment property.  Seeking creative financing situation.

Appreciate your input, and have been enjoying your posts here, by the way.

:-)

As a landlord with some experience, I would have to strongly advise you against buying in a bad neighborhood.   You have to think in terms of the type of tenants you will get in an area you wouldn't dream walk around in at night.

Think of this:   If you buy in a bad area, you can guarantee that almost every credit check you do will come up bad.  So, you will have a really hard time finding tenants you can trust.   Also, let's say you  buy the property and just can't seem to find decent tenants who actually pay you on time, and take great pride in destroying everything in the unit.  Now, you want to try selling.  Good luck with that.   Most seasoned investors won't touch properties located in really bad areas.     I speak from experience, when I say this to you.   I unwittingly purchased a duplex in a "questionable" area of Texas (in another state from where I reside).   I owned the property for about 4 years, and in that time, went through 4 separate tenants.  I've had tenants who didn't pay for 2 months, and then snuck out in the middle of the night.  As I live in Las Vegas, Nevada, I didn't learn of this until about 2 weeks after they vacated the premises, when my other tenant called to let me know.

I then had to pay lots of money to EMPTY a 2 BR apt full of nasty furniture, garbage, etc.... replace carpeting, linoleoum, patch holes in the walls, paint, repair busted kitchen and bathroom cabinets.   To add insult to injury, I later learned they had GLUED all the windows shut!!   I then had to replace the entire window frames before my realtor would show the apartment to anyone else as it was a fire hazard.  

I really hope you will learn from my bad experience, and stay AWAY from bad neighborhoods.

Hi:

I have a traditional IRA made up of a variety stocks I hand-picked and are doing very well. I am wondering:

1. Can I transfer this Traditional IRA into a Self-Directed IRA;

2.  If so, would I have to SELL the stocks in order to do that ... couldn't the account be transferred with the stocks still in it?

Thanks in advance!

@Theresa W.:   LOL re: your "Artsy Fartsy" and "Salon Girl" comments!!   Thanks for the chuckle.   :-)

Well, after reading this post and responses ... I guess I will be adding this to my due diligence procedures!

Hi: 

As a previous landlord of two duplexes and a SFH ... my advice would be:

Tenant #1:   As he continually pays your late fees, I would keep him.   Even though it's annoying, you're earning extra income from his lateness.   Unless, of course, his lateness is causing YOU to be late paying your related mortgage.

Tenant #2:  I would nicely, but firmly tell her that you are unable to accept anything except FULL payment.    She needs to provide it timely and ALL AT ONCE.   If she insists on paying you cash, then she needs to hand it to you, so that you can in turn write her receipt for her records.

Tenant #3:   Sounds like she's trying to negotiate the rent without actually saying so.    Since she is exhibiting what I would call "attacking" behavior ... this could wind up costing you lots of money if you allow this to continue.    I would NOT renew her lease (even at an increased rent) and start marketing for another renter.

GOOD LUCK!! 

Fantastic!!   I, too and working hard to find my first deal.   Congrats to you!  :-)