All Forum Posts by: Thomas Knight

@Stephanie P. I totally understand that it’s to be primary residence. When I bought my place and moved in it was just me and it’s a one bedroom. Now I have two cats and my gf and we’ve talked about kids. So I figured if I was going to get a bigger place I’d try to still get a multi unit for the benefits. But the bank wasn’t a fan and said no. 

What are these fanny and Freddy products you mentioned with 5% down? I don’t think I’ve seen anything about that before?

Hi, so I bought a duplex with the VA loan and I'm looking to get another multi unit. I've been working with some lenders with FHA loans but they told me since I already have a multi unit I can't use it to purchase another one. Is anyone else having this problem or am I just being mislead? I've read the loans requirements and haven't seen anything about owning a multi prohibits you from using the loan to get another.

thanks for the help!

@Dave Foster awesome! Thank you for the quick response. This clears up my questions. That can be a lot of potential depreciation lost it seems. I guess you’d have to weigh the situation and numbers to see what would be worthwhile 

1. If you have started depreciating your property (which is based on the asset value not on the land) and you say, get it reappraised or you refinance it do you start the depreciation process over at the new adjusted value, or do you just continue with the old? or subtract the difference of the old value from the new? 

2. If you depreciate multiple properties for say 10 years, then decide to do a 1031 exchange for another property(ies) do you start the depreciation over for the new property or are you only allowed the original amount you started with? You could seemingly have infinite depreciation if they allowed you to start over each time you exchanged or refinanced.

I've read a bunch of books but haven't really seen these questions posed anywhere. Thanks for the help!

@Nathan Gesner thanks for the detailed explanation. I think I will adopt a similar policy. Thank you everyone for the advice!

@Frank Geiger no, this is just a hypothetical question. I almost had this issue come up where one tenant wanted to move but they were the one who paid the deposit and the other tenant planned on staying. I was unsure at the time what to do. Fortunately I didn’t end up having to deal with it at that time.

I would recommend buying a multi-unit. I personally bought a duplex because like you I didn't want to be putting money into someone else's pocket. So now, i'm able to learn about investing and have my mortgage paid for. The best part is that if you get to chose who you live next to. So no more loud annoying people at all hours of the night! And if for whatever reason you happen to lose your job or your wife does, your mortgage will be something you won't have to worry about as much because it will be paid for by the tenant. It can help lessen the blow of something sudden like that.

That will help you get your feet wet without over extending yourself in any way. Then when you do some more research and learning and you feel ready you'll have a good base of knowledge and some basic experience with it. Just my thoughts.

I've been wondering how you guys are dealing with a certain situation. What do you do when you have multiple people approved on the lease and have paid the security deposit, but one of them decides to leave? The other people are still there so there needs to be a deposit, but what about the person who left who may have pitched in or even payed you the entire amount?

Thanks for your help!

Thomas

@Patrick Menefee I agree! Although I feel I made some mistakes here and there I think for a first property and living in it makes it work out ok in the end. I'm not active anymore and not getting BAH either. I was while I was in school, but now I work full time. I do get my disability pay though. That as well as my pay helps make things a little easier.

@Patrick Menefee, Yes I am househacking at the moment. Since it's a duplex I only have the one other unit to rent out but the Mortgage is $891 a month and the tenant pays $800 so it covers most of that. I have made some improvements to the property since I purchased it like putting in a driveway enough for 4 cars, 2 cars per unit, a nice stone wall as part of the entrance to the driveway. And then some cosmetics to improve the overall look of the outside of the property. Another area of research I need to work on is value add. What will help bring up the value the most.

Maintenance wise I really haven't had any issues with it. I did need to replace a water heater but I already had an extra in the basement that came with the property that was new. So I just swapped it out for the new one. Tenant has been great as well. After looking at the numbers now since moving in I'm thinking that it might just barely cashflow if I rent out my unit. Mainly because I try to over estimate what I think I might need for repairs and cap ex vacancy and what not. So I think I need to work on my analyzing. I am looking to refinance in the future, take that equity and put it into other properties. I started a new job recently that pays much better than was I was doing before. With that increased income I plan to purchase at least one property or more in 2020. So I have time for research. If anyone has any suggestions or mistakes or things I should keep doing based on what Ive posted feel free to let me know. I'm open for constructive criticism.