All Forum Posts by: Theresa K.

@Shaun Reilly This may sound silly, but you can buy stamps online from the post office at www.usps.com. It's really convenient as long as you can wait a few days for the stamps to be mailed to you.

Thanks for the link.

So Cal investors: Does anyone own rentals in the High Desert areas like Barstow, Apple Valley, 29 Palms or Victorville? Or even Hemet or Moreno Valley? Do you think it's more difficult to rent in these areas because of the smaller population and less industry? Do you find that the tenants are generally long term? I'm looking at Riverside and San Bernardino counties and welcome any feedback you have about owning rentals in these areas.

TK

@Chaunna Henry: I look at the crime maps and the sex offender database to get an idea of crime in the area. I also look at Zillow and gosection8.com to get an idea of how many rentals are available in the area and what the current rents might be - although I think Zillow is a little high on their rent estimates. I also look at the Google street view map of the area to see what the area looks like, how much graffiti there is, how many cars are parked at each house and that kind of stuff.

There is a Homepath lender here in San Diego that I have talked to several times. (Not sure if I can mention his name/company here though.) This is the info I got: Investor Homepath loan for SFR/condo requires 10% down. (The actual Lender may have an additional overlay so it may actually be a 15% down payment required.) Investor Homepath loan for 2-4 units requires 20% down. I don't remember exactly, but the Homepath Renovation loan requires 20% or 25% down.

Yes - you have to state if you are OO or investor when you apply for the loan and when you put your offer in on the Homepath website.

For the same rate that you would normally get, a Homepath loan will cost you about 2-3 points. So if the regular rate is 5.25 at zero points, a Homepath loan would be 5.25 at 2 to 3 points. Depending on the size of the loan, the points could be a deal breaker. Especially if the lender requires a 15% downpayment.

Here's a simplified explanation for regular W2 employees. This does not take into account stuff like health insurance deductions, SS caps, 401K contributions, tips, sick pay adjustments, etc.

The employer pays for half of federal payroll taxes (Social Security = 6.2% and Medicare = 1.45%) and the other half (same percentages) comes out of the employee's gross pay. In CA, the employer also has to pay Unemployment Insurance (UI), Employer Training Tax (ETT) and employee pays State Disability Insurance (SDI). Your state may have something similar. Federal and State withholding comes out of the employee's gross pay.

The employer is responsible for remitting all of these "payroll tax" funds to the taxing authorities (IRS and EDD in California). So if you are looking at the total amount being sent to the taxing authorities, then yes, it looks like the company is paying a lot. However, as others have stated, some of these amounts are paid by the employee (via payroll deductions.)

Pub 15 on the irs.gov website will give you the federal withholding tables. Look up the withholding, add the 15.3% for SS/medicare and add your state's payroll taxes & state withholding and this will give you a rough idea of what should be paid in total by both employee and employer.

A few more questions:
How far into the lease are they? Did they just move in or have they been there for a while?
Did they provide financial information when they signed their current lease?
Do they own/operate any other locations?
Read (very carefully) the current lease. Do they have any lease options? Are there any guarantors on the lease?
What other types of tenants can you get to fill this space if they vacate?

Brian Burke: Thanks. I have an email in to the commercial broker that handles my other business insurance so I'll see what they recommend too.

Brian Burke: Do you think the standard State Farm/Farmers/Allstate etc type of policy provides sufficient liability coverage for rental properties?

congrats! How did you decide on Chicago? I'm considering out-of-state too, I'm just not really familiar with any other states except Nevada.