All Forum Posts by: Sam W.

I echo what Ryan M. said - I've missed HUD and FNMA properties because they sold during the "exclusive (OO) periods" before I, as an investor, had a chance to bid on them. In fact, it is happening to me right now on a property.

If you bought the home as an owner occupant then it is the law that you occupy as a primary residence for 1 year. If you are just starting your RE investment journey, I think it is best to start that journey along the right road.

William Keith - the HUD rules are tied to the property, not the loan. HUD wants to allow sufficient time for prospective homeowners to not have to compete with investors to acquire HUD properties (other government agencies [FNMA, VA, etc) have similar exclusive periods.

That said, if you get a mortgage as an owner-occupant in order to take advantage of the lower rate (as compared to an investor), but do not fulfill the occupancy requirements of the mortgage, it could be cause for the lender to demand repayment of the note in full.

As Matt said, if your strategy is to use CF to purchase additional properties (my strategy), then I want to minimize monthly mortgage payments and maximize cashflow.

Tricia Haggard

I focus exclusively in a "smaller town" (~21K). While not quite as small as the 5K you mentioned, it is small enough that I can become somewhat expert in the market (sales and rental).

There are several larger cities nearby but I shy away from them because 1) there is more than enough competition and 2) it may be more difficult to master the market.

Lindsay Wilcox

For me, the "ah-ha" moment came after I bought my first property in a less traditional way - saw a vacant property; contacted the owner; agreed on owner-financing; bought the property.

At that point I started looking at REI differently. I started thinking more creatively and was less apprehensive about "making the deal".

I think once you get over the notion that you are going to "make a killing" in RE, you understand that success is a process that takes awhile - one property at a time. For me, that is appealing.

Sam

Pete Tam

For me, it's all about cash-flow, so I try to amortize over as long a period as possible (30 years on residental mortgages).

Brad Tacia

I, too, am a huge fan of Allure in rental properties. We just finished installing it in a duplex and, as usual, are very pleased with the results.

If I knew how to post pictures I'd include a couple to give you an idea of what it looks like.

Daniel Paloscio

Replacing existing (old) windows that are in reasonable shape with newer "energy efficient" windows will not result in a marked reduction in energy bills. Here are data that I have heard:

"Old" windows probably have an R value of about R-1. The newest and most efficient replacement windows have a value of between R-2 and R-3...or 2 - 3 x as efficient as the older windows.

Most homes lose about 20% of their heat through the windows. Replacement windows that are R-2 or R-3 might lower that to 10% or 6%.

If your heating/cooling bill is normally $1200/year - then $240 of that ($1200 * 20%) is lost with old windows. New windows (R-3) could improve that loss to only $72 ($1200 * 6%) ..... a savings of $168 / year.

How many years will it take to "payoff" the new windows at $168/year?

Now...if you are replacing the windows because the new ones look better...that's another story. But don't replace serviceable windows seeking to save money on heating / cooling bills.

It is a headache but the #s might make it worth it...besides, while it is true that when you buy the property you also buy the tenants (at least for a little while), if the property is a great deal it might be worth the hassle and aggrevation of dealing with or even evicting the tenants. In other words, does it offer superior enough returns to make the risk and work worth it?

Junior Salters

As you said, it does depend on the market and type of property, but a good start point is about 8.3% (1 month/yr). Certainly some properties have the same tenant for years without turnover, but others will have new tenants every year with several months of vacancy in between - So 1 month/yr is, in my opinion, a good conservative startpoint to +/- from based on market, etc.

Sam

I'm in the same boat as Matthew Hammond. Maxed out USAA coverage and had to look elsewhere to insure additional properties. For me, USAA recommended Foremost (with whom they have a business relationship). Has worked out well for me and have been happy with Foremost.