All Forum Posts by: Shawn Couch

 This is always a good move, to have a high deposit.  I would ask for a walk through of the property now also.

A lawnmower may not be enough collateral.  Have him sign the pink slip on his car (assuming he owns and doesn't lease it) and old it until he pays you back, or ask for is Rolex as collateral.  Guys like this that have no money, often waste it on dumb "investments" like a Rolex.  Maybe consider less or a "penalty" every 15 days.  If this loan goes too long, he won't repay you because it will get too expensive.

I would be careful with this scenario, even though you trust the guy.

Also, a good thing to remember is that pigs get fat, but hogs get slaughtered.  You don't want to be the hog.

I have some properties in NW Indiana and they have been good investments.  I have some contacts if you would like some info.

https://gniarmls.com/public-se...

I live in Encinitas and sometimes AirBNB (STR) the extra room, or our house when we go on vacation. People do rent both. Renting just the extra room covers our housing cost, but you have to deal with having people in your space, which can actually be nice, or also a pain. I have found that most people that share the space only use the house/room for sleeping. You can also easily rent a room for $900++ on a monthly basis. Closer to beach and having a private bath boost those rents. A 2 bedroom place around here rents for $3000. In Encinitas, the City will give you approved plans for a detached ADU, you can get a studio, up to 3 bedrooms and pay no permits either. You just have to get the site layout approved, etc. They are doing this to boost "low income housing". You can also have an additional attached ADU, but need to comply with size rules (up to 25% of main house) and are supposed to get permits and approvals. So if you bought a large enough house with a layout that you could chop off a couple of rooms to make an ADU or 2, you could potentially have up to $6000 a month without the headaches of the STR. Prices are high, but this is a great area so rents are high too.

@Tim L.

Since you will be in SD for 2 more years, just live there and enjoy the ride.  It's better than living on Base I assume, right?  Also, housing allowance is paying most or all of your mortgage right now I assume.  If you are dipping into your regular income, then that can be a bummer, but welcome to the expensive SD housing market.  It's not cheap to own or rent.  In a year, take a look at the rents and re-evaluate.  Do that again the following year.  You have a tax write off now which you may not be taking into consideration regarding the current "Negative cash flow" (not sure what you meant here...making a payment in general, going over the housing allowance).  Don't panic and sell now just because your living expenses seem a little high.  It always the hurt the most the first year, and then as rents and income go up you start to realize you made a good decision a few years.  Hang on an enjoy the ride.

Buy and hold investments should generally be immune to downturns as long as your hold period is significantly long.  If you are able to buy the property right, repair it as needed, and then get good enough rental income then you should be OK in the long term. Clearly there are more aspects to consider, but a long term hold period should net you a profitable investment and enough time to recover from any downturns in value.  The thing that can get you in trouble is refinancing to high LTVs as the value goes up.  That's what got most people in trouble in the 2007 meltdown.  

SFR.

Thanks

Hey BP folks.  I need an insurance company to provide hazard insurance on a vacant property for a few months.  Any recommendations for lower cost providers?  Any providers, reading this can email me and I will provide the address and anyy other details.  Thanks