All Forum Posts by: Thomas O.

@Austin Wood did you get an elevation certificate done?

Thanks for all of the feedback!

HOA is requesting a copy of the lease agreement, they suspect the property is short term leased. It is a long term lease with several tenants in a decent sized home. By laws state no short term leases less than 6 months, this is a 15 month lease. Am I legally obligated to provide it to them? I don't see anything in the by laws regarding occupants per home, that seems discriminatory. This HOA seems completely over the top in general and get excited to find people quickly. How should I handle? Thanks!

@D'Andre Byers lifestyle creep is real. I came across a good quote a few years ago from a wealthy investor that I know, ‘live like no one today so you can live like no one in the future.’ Delay your display of ‘wealthy’ so you can actually be wealthy.

I have a wife similar to yours, not very interested in investing in RE. What I did to help her understand the importance is skip the specifics about cash on cash returns and tax benefits and the deal, and just break it down simple so she understands. She is sharp, she has just never been into money/budgets/investing/etc.

We buy and hold long term rentals.

Typically a mortgage is the largest payment that people have. At the time our personal mortgage payment was $1200/month. We bought our first rental property that initially cash flowed $400/month. $400/month x 12 is $4800. I explained to her that this single investment will pay for 4 of our personal mortgage payments every year. Initially the $400/month cash flow didn’t get her excited, the amount of mortgage payments the rental profit would pay for on our personal home really seemed to make sense to her. Fast forward several years, it now cash flows $700/month and has increased in value 40%.

Dont be discouraged, she may be scared because she just doesn’t know the benefits and did not grow up around successful RE investors. Educate her and let her know you want to make sure the family is financially secure in the future.

@Noel R. I don’t think we will due to poor residential lending practices. Fannie and freddie guidelines are still pretty strict on documentation and approvals for 1-4 unit properties.

There are a few concerns that I have out there, student loan debt, rising CC debt and a fair amount of auto loan debt to sub prime consumers. If I remember the stats, the debt out there is about 1.5 trillion each. Not much in comparison to the housing crash of 2008, and I would think it’s highly unlikely that all three would be an issue at once. I’m not an economist, just my two cents.

@Andre Mariano I'm thinking minimum 15% cash on cash is necessary to consider investing SFR, but on commercial I think 8% is common and decent...

@Kevin Whisler will the seller provide you their schedule e on the property to verify rental and repairs?

@Wayne Brooks @Errol Sadler @Laticia Kirkaldy @Chintal Patel  Sorry for the delay and thanks to all of you for the valuable feedback.  I have decided to use my own title company, they're charging $400 plus the normal state and local fees plus title insurance.  I do feel they will look out for me more than the sellers title company, thanks for that advice!   The sellers title company is charging $800 no matter which  title company I close at.

As far auction.com and hubzu I feel that the deals are far and few between, but there are still a few out there.  This property will have some issues as the current tenant has been served an eviction notice once already! Fingers crossed on that nightmare. The deal is solid though as long as its not messed up.  I'll end up paying 193k for it, and I think the value is in the $270k range.  Rent is about 1% of what I paid, decent deal.

@Errol Sadler Unfortunately the auction that I won is cash only, so that is one huge negative and barrier for some investors.  I'm just going to do a cash out refi immediately to get my liquidity back. They messed up on the contract a couple of times, but all in all they seem to have the process together.  If you have any more questions about it feel free to reach out!

Soooo I found a property that checks all of the boxes.  Gated community, 1% rent rule, newer property (13 years old), quickly growing area, close to shopping, beaches, solid cash flow, etc., etc.. Only negative is that it's a foreclosure. 

I bid on the property at auction and won, I'm $10,000 invested in escrow right now and close on the property very soon.  I know the home has a tenant in it and I know approximately what the rent being charged is.  

Come to find out, some public records were posted recently showing that the previous owner tried to evict the current tenant.  Tenant hired lawyer, eviction got dropped.  

My initial plan before this was to send a certified letter introducing myself, request a copy of their current lease, tenant information, change locks and provide new keys, provide new rent payment address, make sure the property is in decent condition and honor previous lease until it's over.  At this point I'm getting a bad gut feeling looking through court records and thinking about lawyering up for immediate council and suggestions.  Anyone out there been through a similar situation and have any words of wisdom?

Thanks,

Pretty Concerned

@Ryan Wamsat make sure it cash flows, properties rented less than 1 year will only count as 75% of the rental rate for approval purposes towards income. (Ie $1000/mo would only count as $750/mo). If you go under contract on a property that is not currently rented, I can offset the DTI with the market rent as income per appraisal. I lend in AL, FL & GA if you're in any of those states and need help.