All Forum Posts by: Christopher B.

Joe, I am in Knoxville, TN. My agent upped my liability on my homeowners to $500k for $22/yr and is working on a $1m umbrella quote. I'm actually looking for another insurance agent/company so if you happen to know anyone or the best carriers for my area I will be appreciate the tip.

Thanks for the replies.

Yes, at this specific point in time a $3000 hit would hurt. My house has received over $15k in repairs this year from a new sewer line and lateral ($5400) to a new roof ($9400) and more. I covered the sewer line because I had 6+ months of cash reserves in my account but it basically wiped me out. I would not have been able to afford a $3k deductible on top of the sewer line at that point. Smaller deductible for me until I get on more solid footing again.
How often do you adjust your insurance based on these factors, annually?

Thank you for the reply Bill. The email stated $3k min. deductible and $7,500 for theft/damage. This just seems to be designed for owners of larger portfolios than my 1 duplex so I am going a different direction. I am currently with SafeCo and their max is $500k so I'll have to go with an umbrella to get $1m in liability.

I live in one side and rent the other, what is the best way to set-up my insurance? My agent is currently saying to push my homeowners insurance liability up to $500k and add a $1m umbrella. Is this the best set-up? I got a quote from National Real Estate Insurance group but the min. deductible is $3k, this seems really high for my situation.

I have a few noob questions as well as scenario specific ones. I am looking to refinance my duplex and set-up a HELOC/Line of Credit. After shopping around I have found a lender that has offered a 20yr fixed @4% and will offer a HELOC up to 80% LTV. Additionally, we talked about future properties and he stated they do portfolio loans that offer 5yrs fixed @ 4.5% amortized over 30yrs.

1. Are these pretty good rates or should I be shopping around some more?
2. How do I take advantage of my 4-10 FNMA "bullets"?
-What are the requirements a lender would look for to do conventional financing on non-OOC residential rental properties (most looking at 2-4 multi-units)? I have no debt outside of student loans but make a putrid $24k/yr (base + commission so it will likely end up being around $30k-$35k)) right now. Every lender I've talked with thus far has said no on this front so I was beginning to assume commercial/portfolio loans were the only/best way to acquire rental properties

I am trying to set-up the best plan of action and want to take advantage of the current low rates if possible via conventional but am unsure of the best plan of action. If I purchase and rehab a property for $60k and it appraises for $100k one would think I shouldn't have a problem obtaining a conventional loan on it or do I need financially qualify to cover each conventional loan regardless of the properties income stream? The current lender I am talking with stated they are only concerned about the income stream of the properties which is encouraging but I want to make sure I am moving in the right direction and taking full advantage of all opportunities because 30yrs fixed at 5% sounds much better than an ARM after 5yrs.

Thank you for any feedback, this community is fantastic!

I've been spending most of my time on another REI site for a while, figured it was time I joined this one as well.

I purchased my first property in Feb. 2010. I was finishing my Junior year in college and was determined to find a deal since there were so many out there. I purchased a 2700 sq. ft duplex that had been foreclosed on for $72k. Luckily for me the price dropped $15k 2 days before I made an offer and I negotiated another $13k of that. I was stoked because I didn't think it was a bad deal at $85k!

The property was older and had been converted by a weekend warrior in the 70's. We ended-up doing a total gut of the property that cost $35k, which was $5k over budget. I didn't have any major issues but the renovation process was h*ll and took almost 6 months. After purchasing the property I got an offer for an internship that I just couldn't turn down. In addition to working 40hrs a week, managing and personally completing a major renovation I was also taking 6hrs of Spanish in summer school so I could graduate this May. It was brutal, I was up at 7 am and typically not in bed until 1 or 2 am every night including the weekends.

It worked out though. I have amazing tenants and am even though I live in the larger side (1700 sq. ft) I am still generating positive cash flow of $120 a month. Not a ton of money but if I ever move out I estimate it will generate around $12,000+ in positive cash flow per year for me.

The numbers:
Purchase Price: $72k
Renovations: $35k
ARV based on appraisal: $140k
Equity: $35k

I only used $5k of my own money, borrowing the rest from a family member. After the project was completed I refinanced the property using my gain in equity and repaid my family back and now own a duplex for free!!