All Forum Posts by: Seth Engelbrecht

I always encourage investors to look at a deal through the banks’ eyes.

Bankers are in the business of mitigating risk and looking for safe returns. The banks mitigate risk through down payments, governmental guarantees, selling the loan, and underwriting standards. In this situation the fact that it is a construction loan and an investment property both increase the risk to the deal greatly.

Down payment is the easiest way to mitigate risk as somewhere between 0% and 100% LTV there is a point the bank would do the deal if the numbers make sense. Down payment could be funds borrowed from a hard money lender or could even be equity in another property.

The other way you may be able to limit the amount down is by owner occupying on side of the duplex as owner occupied homes are seen as less of a risk to the lender. 

When you purchase a home with owner occupied financing the expectation is that you will live in the property for at least one year. If I were in your shoes I would ask the lender on your current home if they can provide you with any verbiage to that effect that you agreed to in your loan documents. If there isn’t anything specific in there maybe they can send you whatever in their policies addresses this. Know what the rules are allows you to figure out exactly what you need to do. 

For a tradition Fannie/Freddie loan the seasoning period is typically 6 months. For a commercial loan the seasoning period varies by bank 

I would worry about liability in this situation. I would recommend talking with your insurance agent before doing this. Maybe there is a way to partner with a business that rents golf carts and that way the liability is covered under their policy

I have seen a few people go down this road thinking that cheap trailers will produce big cash flow. I’m talking with them the lot rent was such a huge portion of the rents and repairs were constant that they never really got much for cash flow to speak of. 

Owning the parks on the other had is where the cash flow goes  

A water bill that high is likely a serious leak or a disgruntled tenant leaving the water run. I have a bad toilet flapper in one of my units I’m dealing with and it cost me $150ish for the last couple months before I caught it. I split the water meters on a different 8 unit property and within 2 weeks 3 tenants had complained about their toilets runnings. When the landlord I paying for the water nobody cares about usage 

My brother had a $3,000 spike on the water bill for one of his properties last year and the only thing the plumber could figure out is that someone had to have left their sink run for days. 

The first place to start would be to make sure that renting the slip and renting it separate from the unit is allowed by the HOA.

Unfortunately screening tenants for short term rentals of any kind is a little harder which is why property owners turn that over to management a lot of the time.

Like Kathy said above, I made my own excel spreadsheet using the schedule E categories so I can give a breakdown directly to my CPA at tax time 

Get a quote from a countertop company for similar laminate and deduct that amount from the deposit 

A lot of people are saying that there aren't deals to be had in this market and that they are waiting for prices to go down. In my opinion this is a low effort excuse used by people not willing to put the work in. There are deals to be had everywhere it just takes some time and effort to find them. It will be a little harder for you living half way across the country but maybe one of your family members in Austin would be willing to do some driving for dollars for you. Maybe there is someone you know that you could pay $5 per lead for a picture of a house that needs repair and the address in the area you want to buy. 

The problem with waiting for the market to drop is it never seems to do so when you're waiting for it. It is also a possibility that we will see prices in dollars stay the same or even increase but the value of the dollar going down faster resulting in the houses being "cheaper" when inflation adjusted. I think sitting on the sidelines isn't the best place to be in the current environment.

Seth