All Forum Posts by: Rob L.

Hey Paul Donoghue, I have rentals in Lawrence and Haverhill so somewhat close to yours. Question for you on the 14 day notice to quit. I've been doing it on the 5th and was curious what your method of delivery is? I've read certified mail is not good because tenants can avoid pickup. But, its costly for a constable or sherif each time. Thanks

I been told to write all your reasons for rejection on your renter rating sheet and store it, along with any results for credit checks etc. for the past two years. Does anyone else do this? I certainly did'nt in the past...

Hey Nick,

Great read. I also own a rental in haverhill and some in lawrence as well. Your message about eviction letters really hit home since I'm in the process of automating my business and having all tenants either mail or pay payments online. I need to make sure to be consistent on sending the letters in order to get the point accross up front.

Thanks for this information Derreck. Like Carl mentioned, I had no idea this existed. Great resource though.

Not sure why you need the loan but most companies that allow general purpose loans also allow 401k loans specifically for
Residential Home purchases. The loan term is extended from the typical 12 to 60 months to 61 to 120 months.

My personal opinion would be to rent it out. To me now is the time to be buying property not selling. So if you don't mind the headaches of being a landlord and are fine with breaking even on the mortage then go for it. If you don't like it sell the house in 3-5 years in hopefully what will be a better market.

Your right Jon, I have left out alot of misc expenses, I think i fell victim of not knowing what it would cost so I just left it blank instead. I will do some research and add the expenses you mentioned above.

Your right for any NOO loan I will probably need atleast 20% down I've even had some local places say 30% for a condo that would be a rental. The 11.5k was wishful thinking and this is why I owe everyone here for all this great info.

Thats is a great point...I didnt think about that when I took comparebles. Thanks Mark. I looked up some of the other units that are renting in the building with the same specs and they were last rented out for 995.

All of the numbers I have are ones I have derived not the seller...which as you can see allows for alot of the mistakes that Jon pointed out.

Your absolutetly right Travis...I know I can run all the excel calculations I want but when it comes to real life its full of pleasent surprises. One of the reasons I love this site is because of the vast knowledge of the people in here. I plan on taking everything everyone has said and try to learn from it as much as possible.

Thanks everyone again for the imput, its greatly appreciated.

I found a condo in my area that sparked my interest. I just wanted to see if Im missing anything and what everyones thoughts are on this. It is a new unit built in 2006 so all the appliances and everything are pretty much new, comparables around town are renting for 1 k to 1250. I did my monthly income off a low ball of 1000. Here are the specs below

Building Cost: 75K
Initial Investment: 11,500.00

Potential Rental Income: 12,000/year

Minuce Operating expenses
Vacany: 450.00
Taxes; 1,500
Insurance 450.00
Condo fees 2,220.

Total: 4,220.00 expenses

I came to a Net income of 1,431.00. That gives a cap rate of 9.79%

I'm not really excited its a condo but from a numbers stand point it seems to be a good investment. What do you guys think ?

I have the actual excel sheet I used to calculate everything out if I left out any vital info let me know and I can add more.

Thanks!

Hey David,

I work in the finance world for my day job specifically on 401ks. Mr. Beard gave you alot of good info on the 401k loan. Another thing you might want to consider when taking out a loan is the time value of money. You may only be taking out 20K but your losing the future value of that 20K thru the potential gains in the market. Of course, your interest of 7% is paid back to you so you can say your earning interest on that money but its tough to say if which is the best option. It depends on a lot of different factors.

Also, you have to pay the loan back through you payroll each pay period so it cuts into your take home pay too.