All Forum Posts by: Stan Hill

 I think it may depend on what you come here for. I look for consensus on gray area issues. For example, the recent threads on an electrician falling through a ceiling, a tenant dying in a rental- stuff like that. Even with consensus, more due diligence is often if not always needed.

Even the asset/liability question on a house is dependent on the individual. Ours is paid for, costs money to own and I won't use its equity for other purchases. Therefore, to me it's a liability. Another person may want to invest equity on rentals and may see it as an asset. 

You reminded me of something Kiyosaki said. He doesn't ask"can I afford it?" He asks, "how can I afford it?" 

Also, I don't consider many BP members the general public in that regard. We are a specific group here for specific purposes.

Personally, I look for a general consensus rather than relying on one reply. 

I believe the cost of flood insurance will be critical in analyzing this deal. The few times we have looked into properties in flood zones, we have found the cost to be a deal-breaker. We bought a duplex that was literally a few houses away from a flood zone. Flood insurance requirements would have diminished the profits. That said, we live in an area where it's fairly easy to avoid flood zones. So why buy a house in a flood zone when we can buy one in the same neighborhood for less expense and get the same rent on a comparable property?

Of course, being in Houston or any other large flood zone, it is certainly more likely that homeowners and tenants are accustomed to that additional cost and market rents are adjusted for it.

So in the end, this reply is really directed at others who can avoid flood zones. I suspect you will do fine- it's not like you're among a small group paying the expense.

@Demetri T.

Demetri, I have sent you a PM with a recommendation for setting up an SDIRA (I think the rules may not allow doing so on the open board).

My wife and I set up our SDIRA with this person's company in 2011 and have been very pleased. I would also like to add that outside of people who offer SDIRAs, others' knowledge about how they operate is extremely limited.

Example: we wanted to buy another investment property using the SDIRA. Literally none of the at least six bankers had a clue about SDIRAs. One even told me I had to amend my tax returns- on a pre-tax retirement account! From getting similar reactions from several bankers, I realized the fancy titles on the bankers' business cards mean little to nothing in the SDIRA world. 

After having no success with these bankers, I contacted the representative I PMed you about. It turns out it was all about how I was presenting the information. Problem solved. Also, the company in question has a pretty good phone staff. We have found that they can answer most questions. There have been only one or two that they couldn't answer. They referred me to the original representative and his advice and information has always been spot on. Believe me, you will have a lot of questions before and after setting up your SDIRA. Choose wisely.

Hopefully someone can give you more encouraging news, but the banks I talked to wanted 40% down plus slightly higher interest rates. We were able to find terms of up to 25 years, however.

personally, I avoid HMLs if at all possible. High interest rates, ridiculous fees. The terms can make many deals not worth it, IMHO. One local HML charged me $30 per month loan servicing fee! Oh and they charged me interest on money before it was even filled out during the rehab process. Buyer beware!

 Some mutual funds become so large, they do in fact have too much money to be nimble enough to make a good return. Also, I'm almost certain most targeted mutual funds don't even do as well as investing in index funds, which are mutual funds that invest in the overall stock market. 

Sell.

Conventional loan, 20% down, no jeopardy for primary residence.

Can't you go FHA on the second purchase after you've lived in the first for a year?