All Forum Posts by: Simcha Davidman

I'm not an expert by any means, but I would say you can't, unless you get your in-laws to take out the loan for you.  It sounds like they own the house - meaning no bank is going to lend to you against a house which legally belongs to someone else.

I was going to vote for the 30 year even before it was an option.  If you feel comfy with the cashflow, you can always funnel money toward it to pay it down faster.

As a plaintiff's attorney, we would sue you and the tenant, with the expectation that the property owner is the one with the money and the insurance.

To echo what has already been said, make sure your insurer does not exclude this coverage.  Even if it does not, expect that once the first claim is made against you, you will be excluded for dog bites after that, for this tenant or any other.

And even after (read: if) you lose insurance coverage, you will still be sued, except that it's a much larger headache, of course.

I should add that I personally do not like animals, so I have very little inclination to allow dogs on my properties (that I do not yet own ;) ).  But personal injury lawyers see $$$ - they don't care if it's a dog or a broken step or a lose handrail, whatever.

Good luck with your decision!

@Stephen Greenway is absolutely right.  That'll happen just about every time because of the large flip increase.  The value of that decreases over time because of "time value of money."

@Zane Bradshaw I think Erich was referring to buying his residence.  If he was buying as an investment, I'm sure he had the "investors mindset" at that point.

Generally, I think there's a tendency of people buying their primary residence because they like the house and they can afford it.  But that's a far cry from being profitable.

The way to get into the mindset would be, prior to your purchasing your residence, run through the numbers - all of them.  How much will it cost you to close, fix up (if you would do anything to it), maintenance, etc., and include in your plan repairs, capex, and maybe even property management.  And then figure how much you could get if you turned around and decided to rent it out.  Does that make sense as an investment?  If it does, great - if and when you decide to move on to your next home, you can hang on to this to begin your real estate empire!

If you buy too high - and by that I mean too high to hold as an investment - it becomes more difficult if not economically unfeasible to hold your first home as an income property.

That's my take on it, anyway.  For example, when we bought our home, I was not thinking about this, and if we tried to rent it out, it would be marginally profitable.  If we were going to move, we probably would take the appreciation and put it into something else instead - bought at a better entry point.

@Jason V. I totally hear you about listening to that stuff.  I'm trying to find my first deal, and after I look at a bunch of listings that are nowhere near cheap enough, and I think about all risk and illiquidity of this asset class (I'm in it for buy and hold), I start thinking how I should just stick with the stock market, with which I'm very comfortable, and how I should just stop this real estate nonsense.  And then I listen to another podcast, and it's like, no way, I gotta do this!  This has happened numerous times.  So for me, it's taking me from negative to positive, not positive to gung-ho.

But if it's not going to help your returns, I think you should stick with certainty.  That, of course, is based on my vast real estate investing experience :)

@Adriana Jimenez On one of the podcasts, I think some lady (it may have been a man, I don't remember - but I definitely heard it!) said that she likes having open houses. First of all, it's more convenient for you, which is the ultimate goal of developing investment income streams. Second of all, it could create a sense of competition and urgency amongst prospective tenants not to sit on your unit without making a move. I imagine that can backfire if you only end up with one or two prospective tenants showing up...

As far as votes go, I think it's just like "like"ing something on facebook, linkedin, etc.  I think the site markets it as a sort of approval/credibility rating, to show which people are more active and helpful.

A little tip someone else taught me.  When trying to tag someone, use the @ symbol, then hit space 1 time, then start typing the person's name.  You should see a list of those available people to tag.

As far as the legal concerns, I do not know how much having a lawyer go over some things with you would cost.  But before you do that, post any of your questions in these forums and you will hopefully have experienced investors giving you solid feedback.

I literally listened to this today https://www.youtube.com/watch?v=RSHb2nlCQp4&list=P....  At each stage of their expansion, something bigger than they could handle came up, and their initial reaction was, nahh we can't do this right now.  Upon further review, they decided to jump into each of them, and are thrilled with the results.

On the other hand, if you borrow and partner, would you still be reaching your goals after splitting returns and more debt service?  If the numbers still make sense, I recommend taking a long and hard look at it.

Alternatively, there's another podcast (much earlier on the youtube playlist) in which the guy being interviewed was able to get the seller to "agree" to high valuations on some of the houses in a portfolio he did not want, which then effectively lowered the value on the remaining houses which he did want, and successfully negotiated purchases on the few that he did want.

Good luck!

How far do you live from the property?  If feasible, I'd say manage it yourself.  I can't say from personal experience, just from all that I've read and listened to on BP, but managing 1 single unit should not be too difficult.  You can still call for help whenever something breaks - but nobody is going to care about getting it filled as much as you will.  Get rid of her, do some research about what it should rent for, and how to market it.  Then market it.

As for selling, don't forget to take into account any transaction costs, including broker/agent fees.  That will eat into anything you might otherwise have available for the next purchase.

But I applaud the move back into your parents house to get your investment career rolling.  That's awesome!

Good luck!