All Forum Posts by: Rocky Pe Benito

Does anyone use RUBS to charge tenants for utilities in Multnomah County? If so, can you share your experience?

Thanks!

Does anyone use RUBS to charge tenants for utilities in Multnomah County? If so, can you share your experience? 

Thanks!

@Stephanie P. You said, "If he's an owner of the property and he takes the money in, he should claim it on his taxes." So, will adding him to the title, but not on the mortgage, makes him an owner then? Thus, he can claim it on his taxes?

Thanks! 

@Stephanie P. Thank you! I'm trying to get this family member added somehow so he can use/report the rental income on his taxes. The goal is for him to develop a track record of rental income (in addition to his day job) so he can be a stronger applicant for more properties later on. Refinancing is not an option at this time because this is a rather large mortgage and there's no way he can qualify for it anytime soon. So, the question is, would adding him to the Title only make him legally eligible to claim the rental income?

Also, an attorney told me that adding a family member to the title will STILL trigger the Due on Sale Clause? Is this true?

Thanks again! :) 

Hello Bankers, Lenders, and Mortgage Brokers,

What would be the legal way to add a family member to the title and mortgage without triggering the Due on Sale Clause? This family member is managing the property (pays mortgage/interests, taxes/insurance, and collects rents). I would like to remove myself from the mortgage and title since I'm retiring but I cannot just "gift" it because there is still a (conventional) mortgage. Your advice would be greatly appreciated!

Thank you,

Rocky

Aloha!

I would appreciate your thoughts on a new property I just bought.

Single Family Residence

7 bedrooms, 2 baths

Converting it into a duplex a possibility, but wanted to hear your take on whether or not it would be best to rent it out As Is or converting it as a duplex. Cost for construction would not be a problem.

How much can I rent it for and can I profit more if I rent it out As Is or as a duplex? The property is in Ewa Beach. Estimates would be greatly appreciated! :) 

Mahalo in advance!

Rocky

Hi @Brad Hammond Just to clarify: are you saying my rent estimates are too high? I researched averages in the area and my estimates are actually on the low end. I know I can easily raise them $50 each. 

How's the rental market in the Portland metro these days? I might be looking for a real estate agent soon for my next deal. 

Thanks for your response! 

@Mitch Messer I failed to mention that I manage my own properties. Regarding vacancy, I've had my fourplex in the same area for a few years now and I haven't had a vacancy longer than 1 month, but who knows with this pandemic. Oddly enough, I don't include CAPEX in my budget. I enjoy managing my properties and tend to fix or improve things before they break and that budget usually comes out of my reserves. I'm a new investor and still learning the basics :) Thanks for your response!

@Nathan Gesner Yes, I think they've only owned the property for a few years and my guess is managing it hasn't worked out. I HIGHLY doubt money is the issue. Thanks for your response!

@Joel B. I would say at this point my assumptions are strong, but we will see. I hear you about Multnomah County. I'd rather invest in the other counties, but I think this is a deal worth pursuing. With the scenario above, wouldn't you consider it even if it's in Multnomah County? It's difficult to get anything from lenders these days and it's starting to get worse due to the pandemic. Only 2/4 units are currently rented but I have no problem with that. I'd rather fill them myself. Thanks for your response! 

Okay, BP team, here is a potential seller-carry deal in the works, and I’d like your thoughts of whether or not it makes sense. Please do not comment on the legal aspects of it since both parties are already working with their attorneys.

Property: Fourplex flat (two 3-bedroom 1-bath, and two 2-bedroom 1-bath with fireplace)

Condition: Average, no major repairs expected.

Location: Nice area; B-class neighborhood

Location: Multnomah County, Oregon (not within the City of Portland limit, so less stringent on rules and regs.)

Price: $600,000

Down payment: Negotiable but I’ll probably put $5,000.00, maybe less.

Terms: Seller financing using “Subject To” plus another note for the remaining balance.

Seller paid 25% down on a $556,000 purchase price a few years ago. So I’m guessing he started with $417,000 at 4.0% – 4.5% interest rate. I like the built-in equity here. I’m also assuming he signed a 30-year mortgage, so he’d have 27 years left on the note.

Additional details on my offer. He is willing to let me keep the mortgage contract long-term, so I can stretch it out to 27 years if I want to without demand for refinance later on. In addition, I asked for a 15-year note with zero interest rate on the remaining balance, I'm confident he'll say "Yes." My second mortgage would be $183,000 (did not factor in downpayment)

So, the numbers look like this:

"Subject To" mortgage (PITI): $2,750.00/month

Second mortgage: $1,017.00/month

Grand total: $3,767.00/month

Rents in the area: $1,300 for the 3 bedrooms and $1,200 for the 2 bedrooms.

These numbers are actually on the low end and I’m confident I can get $50.00 more for each unit. My confidence level is based on the fact that I have a fourplex just a couple of miles down the road.

But let’s stick with the 5k rents for now. That would leave me $1,233.00 net minus $225.00 for garbage and water/sewer. The $225.00 is accurate. Tenants pay for their electricity. After those expenses, my cashflow is about $1,008/month.

I think the seller is no longer interested in managing the property and appear to be motivated.

So, the big question is, would you take the deal and why? I’m also thinking long-term here. After I pay off that second note with the flexibility of paying it off early gives me great cash flow afterward. Also, I'm having difficulty getting any type of bank loan.

I look forward to your thoughts! Thank you in advance!