All Forum Posts by: Ryan Denman

@Shawn Stiteler

Service animals are pretty straight forward, you need to accept them and can't charge extra fees or rent. ESAs are about the same. Be sure to check your local laws regarding what you can ask about the animal, condition the person has which necessitates the animal, and what tasks the animal performs.

¿No se habla Espanol? In the long view, if many of you rentals are going to be in predominantly Spanish speaking areas, learn to speak Spanish, or find a trusted person who can. A realtor as others have suggested is a great idea.

@David Latu

Seems like a decent deal, but consider two questions:

-Why is she selling?

-What are the quality of the tenants in the property?

If the tenants looks like trouble, it does not matter what cash flow out get out. Eviction, lost rent, and damages can easily wipe out even the best of cash flow. I would ask to see all the info on the tenant screening before you buy the property, or buy it on the condition that the property be delivered vacant if the tenants don't meet your screening criteria.

@Minsub Song

I am a veteran as well and have used a VA loan twice. Both times were purchases of a primary residence. The first was zero down and we lived there for two years (Oregon) and then moved to Colorado. We rented that property, but it was always break even on cash flow after maintenance and property management. Refinancing never made sense after it became an investment property, since we could not beat the rate, which would have been the only way to make to cash flow more. Luckily it has appreciated well. The second purchase we used what was left of the entitlement but needed to make up the difference on what entitlement could cover, so we had about 6.5% down. We were not required to get PMI with this low of a down payment.

If you aim on buying with the VA loan and then renting the property in a year here are a couple of things to consider:

-Refinancing to move to a conventional mortgage would be unlikely to yield a lower interest rate. If your idea would be to then do more VA loans after the refinance frees up your eligibility, then that could work. I have heard reclaiming your VA entitlement is a bit difficult and can only be done once.

-If you plan on buying many more houses, try putting up a down payment so you only use a third or a quarter of your eligibility. This is for two reasons:

---zero down properties are very unlikely to cash flow unless you do house hacking, vacation rentals, or another creative strategy.

---if you bring a down payment and have entitlement remaining you can use the VA loan multiple times without needing to refinance other properties to reclaim it. The biggest advantage here is being able to put down less that 20% and not have to worry about PMI.

-Like @Dan Mackin said, VA loans can be undesirable to sellers. My first VA loan was a very long and difficult process and it certainly did not make the sellers happy. Best recommendation there is to find a proactive lender who get stuff done quickly and does full underwriting on you as a borrower before you go out to make offers. Being pre-approved is much better than being pre-qualified. USAA was the bank for my first loan and I had a higher interest rate, longer process, higher closing costs, and much more difficulty getting in contact with the loan officer than with my second purchase. PM me if you would like the contact for my second lender.

Good luck!

@Matthew Rensel

Check with Security Service Federal Credit Union. I did one through them on my primary and I'm about to do another. Also other national credit unions like Pen Fed and Navy Federal could be options as well. They all will likely only give you up to 80% ARV (or appraised value).

I have a rental house in Colorado which is a 3/2 ranch on the main floor and has the basement finished as a 1/1 with its own entrance.  While I lived there renting the basement was a nice bump in extra income and the tenants who lived in the basement apartment were pretty easy going, aside from an occasional marijuana small in the house (I allowed them to smoke in the backyard).  My family moved out of the top floor and into a townhouse and now rent the top floor of the original house separately from the basement.  Things were good for a month or so, and then the top level tenants started complaining to me about marijuana smells.  I went over on occasion to verify the condition, but there was not a lot of evidence of it.  I suggested the tenants communicate between themselves to resolve the issue.  Another month goes by and I get complaints from the downstairs tenants about high levels of noise in the early morning, issues in the laundry room, and constant badgering via text for the upstairs tenants.  

The house is not "designed" as an up/down duplex so a fair bit of noise (music, walking, running, voices) can travel between floors, as well as smells with the shared ducting for the house.  The tenants upstairs are 6 months into a 1 year lease and the basements tenants are on month to month.

What are some good ways to handle the situation?

Hey Jason, 

I just went back and listened to #108 again, and it was great.  Grant Cardone and his books are must reads (or listens if you do audio books) for shattering limiting beliefs, and I would highly recommend them.  If you have not listened to the audio version of the 10X Rule, try it at 2X play back speed for 20X results!

@Jeff S.

I think selling to another investor would be by far the easiest option, even if it means selling for less than I would like.

It is a 3 bed, 2.5 bath, 1344 sq ft house built in 1977 currently rented for $1695. Zestimate is at $343k. Based on current inventory I think rent could go up at least another $50 for the coming year.

@Cory Carlson

Thanks for the reply. I am definitely leaning this way and will put a little pressure on my agent to see what we can do.

The one thing that might make the sale more complicated to an owner/occupier would be by the time we close, the tenant will then have been in the house for more that 12 months. Maybe we can make up for that by compensating the seller with closing costs, lower sale price, etc?

Hey BP'ers,

I'm looking for some advice, opinions, etc. on a problem that I have with a single family house in Eugene, OR.  

My wife and I lived there from Jun 2015- Sep 2017 and we converted it to a rental when we moved to Colorado. It was never a great cash flow property, since it was our first house that we bought with a zero down VA loan. Over the past few years it has been break even with the PM and maintenance costs, but appreciation has been great. We wanted to sell that property within the window of living there 2 of the last five to avoid capital gains, and move that equity into cash reserves and other real estate projects in the Denver Metro area. Aside from it being a low cash flow property is has been great all around, as well as the PM we use for the property. We started conversations with our PM and a realtor back in Feb to line things up to sell this summer, then COVID hit.

The governor of Oregon issue an executive order forbidding evictions in Oregon for not being able to pay rent, which is reasonable.  However, the very tenant friendly/anti-landlord culture of the state has caused a great deal of fear about issuing notices of any type during this time.  It does not appear that we will be able to issue notice without fear of some sort of litigation, which we don't have time to deal with if we want to sell the house before Sep 2020.  It is suggested by the realtor as the best route to have the tenant move out before we sell.

The one idea I have which may work is to sell the house without having the tenant move out.  Are there any other suggestions investors from Oregon have about how to handle this situation?

Thanks!

Ryan

Extra facts: -Tenant is on an 11 month lease and has not been in the property for more that 12 months.

-Tenant has always paid on time and has been great for the last 10 months in residence at the property.

-We own only one unit in Oregon.

-Property is in Ferry St Bridge neighborhood.

Hey Terre,

I also signed up with them for work in Boulder.  From my own experience in managing my own properties it seems like what the expect of average joes with an hour or two of free time for a gig is a pretty tall order.  I am still in the onboarding process, so it will be interesting to see what the actual work is like once it gets started.  

Ryan