All Forum Posts by: Tim Porsche

Hi All,

I have a quick question I was hoping someone might be able to shed some light on. I currently have a SFH with about 30% equity and a duplex that I bought with 4% down and live in. I plan to buy more multi-units and owner occupy, but am I wondering, would I be able to buy future owner-occupied multi-units with 10% down, or would I need to put 20-25% down on all future purchases with conventional financing. Even with paying PMI, the cash on cash returns with 10% down should be higher than with putting 20% down, so that is what I would like to do. Will most lenders allow 10% down in this situation, or do they require 20-25%? Any advice is greatly appreciated, thanks in advance!

Looks great! Congrats on getting your first one done. Just curious, what kind of financing did you do for this? Traditional 30 year fixed mortgage? I'm assuming it wasn't an FHA loan since I don't see PMI listed as an expense on your breakdown. But if it wasn't an FHA how were you able to put so little down?

@Naseer Khan Thanks for clarifying that. Paying 20% or less on the profit sounds a whole lot better than paying 33% or more :)

@Naseer Khan So you're saying if I live in and renovate the house for a year, then go to sell it, I would pay a lower capital gains tax rate of between 0-20%? Or is that only if I live there for a year, and then hold it for an additional year as an investment/rental?

I would wait to show it until it is completely finished. That being said, there's nothing wrong with putting a big sign in the yard that gives some basic information on the home and flip and let's people know it will be coming on the market soon, and getting the word out through other avenues. 

@Luke Schrotberger Thanks for your reply. That makes perfect sense, I just wasn't sure if the same rules applied for owner occupied financing vs investment financing in a refinancing situation, as opposed to a new loan situation. I'm wondering if I do this, if it might not be smarter to just sell the house after it's been flipped, take the proceeds and buy another investment property with them (maybe an owner occupied multi-family). One bad thing about that is you would get hit with high capital gains taxes if you sell the house in under two years though right? :(

Hey All, got a quick question for you about a hypothetical situation. If you buy a house with a conventional mortgage, as your primary residence, and do a live in flip, then you go to refinance it after a year based on the ARV and you intend to rent it out, you would be refinancing at about a 1% higher interest rate since you are going to rent it out and not occupy it, is that correct? Or could you still refinance at the lower owner-occupied rate if you are still currently living there, even if you intend to rent it out in the near future? Thanks in advance for any advice, I'm just curious as to how that would work.

I went through this back in October. All I did was call each of them to introduce myself and tell them that everything would stay the same for the time being except for a few minor changes, such as the method of rent payment for example. Then I sent them an email with all of the information they would need to get a hold of me, instructions for paying rent, and the new lease they would need to sign after their current month to month was up so they could read over and familiarize themselves with it. 

Do you already have a hard money lender lined up who will loan you that much? From what I understand, typically hard money lenders only loan up to 70% of the purchase price + estimated rehab costs, although if the deal is good enough they will sometimes lend a higher percentage. 

Hi All,

I have a situation and a few questions I'm hoping someone can shed some light on. A few days ago, the tenants at a SFH contacted me saying they have no running water and the pump just kept running until they switched off the break. I had a plumber come out to take a look, and he said most likely the valve at the bottom of the well needs replaced, and since the well pipes are galvanized steel pipes, they would need to be replaced after pulling them up.

I found a well drilling company willing to pull up the pipes (not as easy as you would think to find someone) and replace the valve, which is supposed to happen today. My two questions are...

1. What is a landlord's liability and responsibility in a situation like this where tenants don't have water? The neighbor allowed them to connect to his outlet for two days, but as of this morning they are without water until the well pipes are replaced. I'm going to give them free rent for every day they are without water, and offered to pay for any bottled or galloned water they want to purchase, while trying to get this fixed asap. Is there anything else I should be doing?

2. How often have you seen something like this happen before with a well? Does this happen from time to time that a valve goes bad and the pipes and valve need to be replaced, or is this fairly rare?

Any advice would be greatly appreciated. Thanks in advance.