All Forum Posts by: Tarik N.

I have a four duplexes in Baltimore, and I am not sure which strategy is best for liability protection: 1) create an LLC, but transfer taxes are pretty prohibities, 2) have an umbrella policy ($1M? $2M?), or 3) a combination of both.

I would appreciate any insight, advice or thoughts.

Thank you,

Tarik Nabi

Chris Mason you are correct, it's not amortized over 30, it's interest only.

Thomas S. thanks for the input. I'm surprised that interest only is the "best possible scenario"." I'm just slightly unnerved that the only way after 7 is to 1) hope the value increases sufficiently or 2) come up with an additional down payment.

Mike Flora The property will be fixed up before it's leased by the seller (I'll run background checks to ensure good tenants), still waiting for details about maintenance, garbage, sewer etc. the property is a 1% ratio of rent to value, asking number is a hair below Zillow value. I'm comfortable with the numbers but I'm not familiar with seller financing or interest only. I guess after 7 years the equity will be high enough that I can refinance, but I don't like wish-guessing. I'm more comfortable with 30 year fixed mortgages. Thanks

Hello,

I am pondering my first seller-financed deal on a duplex. The seller will sell it to me fully leased at 5% amortized over 30 years with balloon payment after 7 years, interest only.

I'm pretty happy OK with the terms in general except the "interest only" portion. I will be paying less than for a traditional monthly payment with regular paydown, but at the end of the 7 years, I still won't have paid a single dollar of the principal, and that bothers me.

Is "interest only" the typical way to do seller financing deals?

It seems that the only positive outcome for me in this deal is that the property increases in value sufficiently in 7 years for me to refinance and start on a regular mortgage. The only other option would be to save money for the 7 years and make a down payment then.

I would appreciate any thoughts/input.

Thank you,

Tarik Nabi

Thank you all for the helpful comments!

Hello,

I have the following question about the tradeoff between rent/purchase ratio and property class:

I typically invest in C/C+ class residential MFs (duplexes) which typically have a rent/purchase ratio of 1.4% to 1.7%, but I have this opportunity for a seller-financing deal for a B/B+ class property, but the property has a rent/purchase ratio of just 1% and that gives me pause. Any thoughts on whether this is a comparable deal to my other C/C+ class properties, better or worse?

I would appreciate any comments.

Thank you,

Hello, I'm looking for an umbrella personal insurance policy for the six rentals that I have. Seems like the big insurers don't have or simply don't give umbrella insurance for rental properties. Anybody has any recommendations? Thank you, Tarik Nabi

Good point. I just asked and I'm waiting to hear back. Thanks!

Hello, I was thinking about using a company (Nationwide Rentsure) that provides rent income protection during eviction proceedings. They handle evictions, pay the rent for the duration of the eviction and pay up to a certain amount in damage to the place. The cost is $200 one time and $40 a month. Sounds like a good thing but I was wondering if anyone had used them and would provide feedback. Thank you,