All Forum Posts by: Sean McCluskey

@Mark Ainley This sounds like great advice, thanks Mark! I will keep having my contractor or handyman go to the inspections.

Hi @Mark Ainley, did you come up with a good solution for who to hire to sit and wait for the public housing inspectors to arrive? I'm working on figuring this out now. Does my representative need to be knowledgeable or just able to open the door and let the inspector in?  Have you had any success in just providing a lock box code?

@Bryan Stats You got it, they’re required to calculate your monthly debts as a percent of your gross monthly income.

@RJ Emmett I agree that you should be careful about what you do since you’re in Oregon, and landlord laws are very tenant friendly. I would ask a lawyer.

@Noah Chappell Most of the other cities have restricted rent control to older houses. I think it’s 1972 or older in NYC, for example. This allows development to still happen. St Paul put the rent control on everything including brand new construction.

@Bryce Renicker I’m going to go ahead and disagree with everyone.

It’s true that buying a rental that doesn’t currently cash flow is not ideal. BUT, I agree with you that the low down payment is a consideration.

Say you’re putting 5% down, and after you move out the property has negative cash flow equal to 0.5% down per year. What’s so bad about that?

You’re basically going from 5% down to 5.5% down in year 1. But you get benefits:

1) You got to live there first, saving rent.

2) The potential for equity appreciation.

3) Rents are very much likely to consider increasing over time.

4) The fixed rate debt is wonderful in an inflation environment.

5) When you get the chance to remove PMI, you may start cash flowing.

If your alternative is to remain a renter for years while you try to save up more money or wait for a crash, then I think buying now and getting started is great.

The main question I have for you is this: how reliable is your job? Are you skilled and in demand? Are you going to be getting promotions? If you get laid off, will you be able to get another job with similar or better pay?

Because the main risk is that you need to be able to manage your money and pay the negative cash flow while you also live your life.

@Payson Scott Don’t drop out, your degree and high paying job will help you blow past where you would be if you dropped out and worked a random job while trying to build a real estate portfolio.

$75k seems like a lot of money to a young person but as others have said - it’s really not.

If you drop out and have no 2-year history of income in the same industry, you won’t be able to get a conventional loan on your first property. You’ll need to do a commercial loan, putting 15-25% down instead of 3% down. And paying 2%+ more in interest rate.

Conventional loans (with the best interest rates) require a strong debt to income ratio. You get that with your high paying job.

I agree that buying a house hack while staying on college would be a perfect start, using some of your $18,500 that’s not in a college fund and having your roommate friends basically pay the mortgage.

Then house hack again when you move for starting your job. Again, 3% down and roommates pay the mortgage.

@German Enciso are there any duplexes in high end areas?

You’re saying that the two units being salable separately from each other would automatically increase their combined value because you’re assuming that they would price closer to nice single family houses. But the quality of living in those split duplexes will still be the same as it is today, so I am not so sure that they will have a huge pop in price.

In fact, the intent of the law would be the opposite- to decrease the price of individual units by increasing the supply of units for sale, right?

@Aaron Vargas I am using Quicken Rental Property Manager. It comes predesigned to record everything you need to enter for a rental portfolio (unlike quickbooks which is more of a mid-sized enterprise level accounting software). I enjoy using the forecaster to see how close I am to reaching my goals. And I think I paid $60 for a 2-year license for the desktop version.

@Neel P. Where I buy, the As is clause means that you can’t back out for some defect that was already disclosed on the sellers disclosure form. And the seller says they won’t make any repairs. But if you find some new issue, you can back out.