All Forum Posts by: William Sing

This would be a good alternative as long as your uncle is OK with being in the second position. Think of it as a HELOC or another loan product. Just know you will still want the whole payment (loan & Seller financing) to be reasonable for you. I'd calculate to see what the monthly payment would be and also see if your uncle is wanting a balloon payment.

When it comes to the financing side it usually comes down to terms, downpayment, interest rate, and price. I'd come up for a win-win scenario in each case that is beneficial for each party. If you are assuming the loan that is a little harder to do since you are bound more to the banks standards. I think it'd be worth it to show them the potential tax benefits. Also may want to add that if you don't have any agent fees they'd be getting more back. Usually those are anywhere between 5-6% most of the time. 

I'd recommend reaching out to a lawyer who specializes in evictions. A lot of areas have different laws/regulations. Talking to a property management company for some cheaper advice might also be beneficial as well!

Hey @Gabriel Orduna! It sounds like you have a great opportunity with your wife's family's home. Wanting to approach the "key decision maker" with a couple of options is a smart move. Let's discuss a couple of ideas and their pros and cons.

One option you could consider is proposing a rent-to-own agreement. This would allow you to rent the house from them while working towards qualifying for a mortgage. The upside is that you can secure the property and lock in a purchase price upfront. Plus, it gives you time to improve your qualifications for a mortgage, which increases your chances of getting a good deal. However, you'll need to negotiate the terms to make sure they're fair for both parties, including the rental amount and the duration of the agreement.

Another option is assuming the current loan on the house. By taking over the existing loan, you could avoid the need for a new mortgage qualification process. This saves you time and potentially some costs. Plus, it provides a smoother transition as you continue with the current financing terms and payments. Keep in mind that you'll need to carefully assess the loan terms, remaining balance, and interest rate to make sure they align with your financial goals. The monthly payments may also be higher compared to securing a new mortgage, depending on the loan terms and your financial capacity.

Option three would be exploring seller financing depending on how much equity they have. The benefit of seller financing is that it provides more flexibility in terms of qualifying for a loan. Since the arrangement is negotiated directly with your family, they may be more open to accommodating your current financial situation and future plans. Additionally, it can save you from the stringent requirements of a traditional mortgage, such as credit scores and income verification.

Whichever option you choose, it's important to approach the conversation with transparency and the intention of finding a win-win solution. Let the decision-maker know that you want both parties to feel good about the decision. It may also be helpful to consult with a real estate attorney or financial advisor to ensure all legal and financial aspects are properly addressed.

Good luck with your conversation, and I hope you can reach an agreement that works for everyone involved!

@Benson Bui, Congrats on starting your journey! 

For permitting know that the City of Portland is pretty backed up right now. You will probably submit the application and may not hear back from the for 6+ months.

Know that it is mostly complaint driven when it comes to getting fined by the city. I always recommend talking with the neighbors and seeing what you can do to have them contact you before the city. 

There are a lot of people jumping into short-term rentals so I'd recommend getting professional photos and seeing what you can do to have your rental stand out. If the short-term rental becomes a bit of a hassle, I've had some clients switch to furnished mid-term rentals especially if you are closer to hospitals. It is good to have a backup plan if needed!

Hi @Angela Zaitz! 

Congrats on taking the next steps!

Regarding permitting for the ADU, it's essential to check the local regulations and building codes in your area. Each jurisdiction may have specific requirements for creating an ADU, including permits and inspections. Contact your local building department or zoning office to inquire about the necessary permits and any specific guidelines that need to be followed for creating an ADU. Usually, if you are a homeowner the building/zoning department are a little more sympathetic. They will provide you with accurate information based on your location.

Regarding utilities, splitting them between two units can be managed, but it can vary depending on your local regulations and the existing infrastructure. Here are a few general suggestions:

1. Separate Electrical Metering: Contact your utility company to inquire about the process of installing a separate electric meter for each unit. This allows for individual billing and usage tracking. I highly recommend doing individual billing for electric since those costs can wildly vary especially if you have high heating/cooling needs. 

2. Water Heater: While some jurisdictions may require separate water heaters for each unit, others may allow a shared water heater under certain conditions. Check with your local building department to determine the specific requirements. If you are able to share one water heater, make sure to increase its size of it to handle the increased usage. I usually recommend having one water heater for each unit but piping may not allow that or get to costly. 

3. Submetering or Separate Utility Accounts: If separate utility meters are not feasible or allowed, you could explore the option of submetering, where individual units have their own utility usage measured. Alternatively, you can establish separate utility accounts for each unit and split the bills accordingly. As mentioned by Angela, you can charge by sqft as well or another  option would be a flat fee. Just know with the flat fee you are potentially more liable for utility overages. 

Remember, it's crucial to consult with professionals, such as a local contractor, architect, or building inspector, to ensure compliance with local regulations and building codes. They will provide specific advice based on your unique circumstances and location.

Hey @Douglas Jennings, Do you have a little more info on this? I'm going to assume you are buying cash since there is no mortgage but looks like you'd need to add in vacancy (~5%) along with maintenance/capex.

Hey @Scott Po, it's great that you're considering your options and weighing the pros and cons of using your VA financing versus depleting your cash to cover the assumption gap. It's important to consider the long-term implications of both options and make a decision that aligns with your investment goals and risk tolerance.

If you were to explore other opportunities with VA financing, are there properties available that could offer a similar return on investment? If not, and the current interest rates are making it difficult to cashflow, then it may be worth considering depleting your cash reserves to take advantage of this deal. However, it's important to be honest with yourself about your comfort level with lower cash reserves and ask the "can I sleep with this?" question to ensure you're making a decision that you're comfortable with.

Additionally, it's important to consider your overall investment strategy and goals. If you're focused on buy-and-hold, then perhaps taking on the assumption gap and doing the necessary improvements is the way to go. If you're more interested in fix and flip, then using your VA financing to find a property that doesn't require as much upfront capital might be a better option.

Ultimately, clarity on your goals and risk tolerance can help you make a more decisive decision now and in the future. Good luck with your investment journey!

Congratulations on taking the first step toward achieving your investment goals! Focusing on buy-and-hold properties and networking through REIA groups are great strategies. Keep learning and taking action, and you'll be on your way to financial freedom. If you are looking to do MTRs then I highly recommend looking at https://www.furnishedfinder.co... if you are looking to target business/medical professionals. Hope that helps and reach out if you need anything else!

Congratulations on your second property purchase! It's great that you have a separate bank account set up for your vacation rental, which can help with financial management and tracking expenses.

When it comes to managing finances for your new duplex, it may be helpful to consider opening a separate bank account for it as well. This can help keep track of income and expenses related to the duplex, and make it easier to manage finances for multiple properties. From a tax perspective, this is usually easier to track. 

However, if you feel comfortable managing everything in one account for both your vacation rental and duplex, that could work too. The key is to find a system that works for you and helps you stay organized. Quickbooks has the option to use "classes" and this is a way you can track all of the expenses in one place. The downside is that this costs more than the basic software. It is around $85/mo or something like that. 

Overall, the most important thing is to have a system in place that works for you and allows you to easily track and manage finances for your real estate investments. Good luck with your new duplex!