All Forum Posts by: Todd Willhoite

Scott Trench wrote a blog article on the subject with a spreadsheet you can download.  What are you going to do with the excess cashflow from a 30yr mortgage?  Are you going to spend it, or invest it?  In Scott's blog he assumes investing it into an S&P 500 index fund.  Under his default settings on the spreadsheet the 30 year mtg leads to greater wealth.  The nice thing about the spreadsheet is you can run your own numbers and see what happens.  I just did a 30 yr refinance and put my numbers in the spreadsheet.  My interest is higher than his default.  I assume the stock market is not going to perform as well as his defaults based upon the current dividend yield of the S&P 500 and the overall return over the last 5-10 years.  Under my situation it looks like 30 year mtg comes out slightly ahead of 15 year net worth, but cash flow from year 15 until 30 blows away the 30 year mtg until year 30.  

A 30 year mtg will probably come with a higher interest rate, but you are buying the flexibility to pay the lower rate. You can always pay it like a 15 year mortgage with the extra going to principle until you want or need to pay the 30 year rate.

I have been very pleased with Suzanne at Oklahomes

I see rates on the internet for primary homes 30 year fixed rates.  Is there a typically formula for how much that rate should increase if the property is an investment property instead of an owner occupied property?  Is there a typical increase in the rate if the house does not have a mortgage but is doing a cash out refinance?

If it makes a difference the property is in Oklahoma.

As @James Galla stated you need to talk to an attorney and you need to do it fast as the clock is probably running on your five days to get out.  In some states email might not work, in other states an email might, but I don't know anything about the laws of your state.  The attorney will want to review the entire contract and not just one clause although what you have quoted is probably the most relevant clause to the situation. 

Half a duplex also bothers me.  What if the other side doesn't take care of their side and rents to people who your tenants don't want to be next too?  What if they don't mow the yard.  Even if the current owners are good, nothing says they won't sell to a slumlord after you buy in.  Extra risk factor on a very slim profit margin.

What does your competition have?  How does it effect their rents?  What effect will it have on vacancy?  (Will tenants choose to rent one with a garage before renting one without a garage?)

I don't know what state the properties are located, so can't give specific legal advice. In general placing both buildings in an LLC or one LLC for each property will provide a layer of protection if there is a lawsuit. LLC is not a substitute for adequate liability insurance as you are still at risk of loosing the assets in an LLC if the tenant has a significant valid claim. Placing property in LLC most likely will effect the mortgage and give the lender the right to exercise the due on sale clause. Keeping the properties outside a LLC you lose the asset protection. As long as each building is 4 units or less, then the building may qualify for 30 year mortgage with fixed interest rate.

I have taken clippers and clipped the sapling at ground level and applied a herbicide called tordon.  Kills the sappling and it is at ground level and not a problem anymore.  Don't have experience on most effective for a large number of saplings.

Looking to help a person who has a loan that went in foreclosure where they have about $50k principal and interest due PLUS about $25K Deferred principle, plus other costs which make it add up to about FMV of the property. If person sells they have to pay all the money back to bank at closing (and not any equity in it for an investor). Although foreclosure has begun, can person sign a lease with an option to purchase, I pay the amount that is back owed to bring the mortgage payments current, and then lease from borrower for monthly payment to bank? I am thinking a low monthly payment where property is sub leased to tenant paying fmv rent that lives there might make financial sense (spread between rent received and mortgage payment). I believe the loan and deferred principle where made under a government program that requires an owner occupant, so once the borrower moves out, then maybe the loan is called due? Anyone have experience or advice on this situation?

Great work, it looks beautiful!