All Forum Posts by: Sam Y.

Thomas S. , can you please break down the detail of your post above. I don't quite follow how/where the number come from (ie. $1666).

How can one mortgage at 280K (market house value) when the bank doesn't out 100% of the house value? 

What if this tenant agree to sign a new rental lease with new owner before closing? Will this work out OK for everyone?

I'm guessing that DTI ratio will be too high to meet the conventional bank requirement.

@Varma Adduri, at 230K ARV, the conventional bank will only loan at 80% LTV, so you will only get about 184K out after refi.

If i remember correctly from @Brandon Turner  webinar, he mentioned some banks want you to wait aleast 6 months from purchase date before you can refi. I don't think having tenant in there is a bank requirement but just to help fund the 6 months waiting period.

Someone can correct me if this not the case.

@THU NGUYEN ,  I don't have a suggestion for you, but just trying to  understand the problem.

 Are you trying to avoid paying the 20% down and getting the traditional financing?

So let say 122K x 20% = $24,440 down.  Loan from bank would be $97,560, and at this amount mortgage is about [email protected]% + tax/insurance say couple hundred more depending on your location tax.  
Let say $700=PITI. $1300 rent - 700 = $600 left for repair/maintenance/vacancy.

$24,400 + 15K (repair) = $39440 cash+ $2K closing cost = about $41.4K upfront cash.

Let say it cashflow at $300/month, 3600 a year.  Cash on Cash Return = $3600/$41.4K = 8.6% return, this does not even add in management fee for rental.  It seems the deal is quite slim at 8.6% return with that amount of cash you put in.  So I guess this is the problem?

Hi BP community,

 I would like to get your opinion on a promissory note from my ex-tenant, It's like an IOU.

So the story is in California  back before 2009, I had an ex-tenant (single mom+kids) that I was too nice to and I didn't evicted them while they were making late payment month after month.  The back-rents accumulated up to $3400 after several years they living there. In 2009, they finally decided to moved out of the house due to finding another employment elsewhere out of the state. The back-rents still couldn't be paid I so made them signed a promissory note like an IOU to give them 5 years to pay it off at a very low monthly payment.  They made 2 low payments and the check stopped coming in. I never followed thru at the time lacking of knowledge, motivation, busy schedule etc.  Now with more knowledge learned from BP here, I want to go and try to get those back-rent back.   

Does anyone know if this is possible that I can still go after this ex-tenant for the back-rent or too late?

1.  Promissory note says that all balance should be  paid off by end 2013, started in 2009, but now it's 2016 and 3 years later.

2. Should I give this note to a collection agency to help collect? or should I find this ex-tenant myself and try to get the back-rent back myself? I still have their personal info.

3. Bring them to small claim with promissory note they signed? maybe it's too late due to statue of limitation?

The only thing I hate about this is that the tenant didn't kept their part of the deal. This is just help creating bad tenant.  

Should I just cut my loss and move on? What would you do?

Thanks in advance

Thanks Manola! neat tool, didn't know you could do that with google map.

@Chris V. Just curious, do you self manage your properties or hire PM? Wondering when the number of units in your portfolio increses beyond 10+, even if they're in your town, seems difficult to handle daily tenant drama plus if you have full time day job in the tech in SF bay areas.

How do you guy calculate the roof square footage? Is that the same sqft of the indoor living space or normally seen in the home spec or from APN/county?

Nice post Chris. I looked into Stockton MLS listing a bit last few weeks, completely agree with everything you say. I also do not find cashflow as much as in your analysis. For this particular property, seems not so bad deal if in a desirable area. At -400 a year, that's like -34 every month. I can only justify by thinking that you make it up in the principal help paid by tenant monthly, and also you get to deduct the depreciation of the property like you said deduct more in taxes from w2 or w4. Phantom cashflow is what Robert Kiosayki once call it.

Now why would they install an HVAC on top of roof on a slope?