All Forum Posts by: Tim Vecchioni

Nothing at all. I was just curious if holding off for equity purposes was a possible plan but I agree with you in the logic that it is a negative cash flow, so why keep it. Do you have any insight on purchasing a 2nd property in the mean time with having no money for the down payment/rehab if needed? Is using a hard money lender a viable solution for buy and hold properties? If so, what is the best way to get rid of the loan after you have the property?

Thanks Michael Le for the response. Yes I know the property is in the negative after those expenses you mentioned which is why I asked. However should I wait this tenant out and use the equity from the home to find a better property or should I keep that property and look for a 2nd in the mean time while I wait him out?

Hello BP! New poster as I have been lurking for awhile now, but after some time researching I feel I am ready to move forward and I would appreciate any advice! I will try to make the backstory quick but if further info is needed, please ask! My wife and I moved into a townhouse 6 years ago. It as a B-/B area. We decided to move a year later but couldn't afford to sell the property so we decided to rent it out. We found a tenant pretty quickly on our own and they stayed for 3 years basically trashing the place. They paid $1,675 / month and our mortgage which I will include the HOA, was $1,650. So we obviously weren't making much money. When they moved out, we rehabbed the house completely with new carpet/paint as it was destroyed. Cost us $6k. Took them to court and only recouped $1,400. We actually found a tenant while the rehab was being done and he's been in there since, being charged $1,725 and is one of the tenants we probably all dream of. Has OCD and takes amazing care of the place. The home was purchased for $220k with a loan amount of $213k. We currently owe around $190k. The comps in the community are selling for $225-230k. The tenant however just yesterday said he has no intention of moving within the next couple years. It's hard to not ride him out as a tenant building more equity right!? We are going to take our personal tax money this year and redo the kitchen/knock a wall down to open it up like other townhouses in the community. Will easily add more value to the house than its cost and we know it will be taken care of. For possible loan information the house we currently live in was purchased at $236k and we owe around $215k with a mortgage payment of $1,530. My question in all of this is that I am itching to get started in finding a property to continue my journey in REI and am trying to figure out my options. In my head, I'm saying to wait this tenant out and then take the equity to use as a down payment on a property that will actually have good cash flow. This could be 2 and a half years from now or even longer pending the tenant. However after reading rich dad, poor dad, I feel I am letting the aspect of the money control me! The second option in my head would be to find a second property and get a hard money lender for the down payment. However I am assuming that a bank would not lend me the additional money for the loan anyways as I already have two in our names. Is this where becoming an LLC is the next step? Should I keep the townhouse and look for property #2? If I do should I sell when the tenant finally does decide to move or should I continue to rent the house after refinancing to a lower mortgage? All thoughts running through my head that need sorting! Any help, suggestions, advice, links is very appreciated as I am here to soak up any information I can gather and advance in my journey! -Tim

Bryant Schur Hey Bryant! I am new to BP. Have been listening to the podcast and ventured into the forums and saw this! Perfect! My wife and I accidentally fell into being landlords as we went to move and we're upside down on our mortgage so we decided to rent. 5 years later and 1 lawsuit later, she is ready to just sell and move on. However, I am trying to convince her we could have stumbled onto he start of something amazing. Our mortgage on this townhouse is $1530 a month with a $100 HOA. The rent is $1725, leaving us a profit of $95. However it's actually $195 staying in the rental account we have set up as we have been paying the HOA out of pocket. We now have about 35k in equity in this property. We are also in charge of the management as we felt we can't afford to outsource this. Also had to redo the whole house, carpet and paint, minor repairs after a 3 year tenancy. Cost us 6k and we were only able to recoup $1800 in court. We now have a near perfect tenant in there and are riding him out until he decides to leave. However we would like to leave the area we are in and if we stay in REI, move to something closer to us which is also a better market as far as rent/mortgage goes. What do you recommend as far as keeping/selling this current property vs. buying something closer which also would most likely be a condo for a much lower mortgage but the same rent range? I guess what I am asking is should we keep this property and look for another one on top of it, or sell this one and take the equity and make a better investment/start elsewhere? This may seem all over the place but I am not sure how to ask this question but am very interested in learning anything and everything in the subject of buy and hold! Thanks!