All Forum Posts by: Tyler Rowland

Awesome! Can't wait to check it out!

Also, some great advice on finding the right contractors, and other team members for real estate investing; I found in David Green's book Long-Distance Real Estate Investing.  

Hey there Lee

I don't know if you have any friends that have been contractors or that have worked for one, but one of the things that I did with a duplex that we is have them come over and look at the place.  

The guy I got happened to be my brother in law.  I told him to point out anything that bugged him about the place.  When you work in any industry you pick up habits and tricks that make the work or product better.  He was able to do that at my duplex.  Any time he said, "I would not have done (blank) that way." or "(blank) was lazy, and could be done different." I took note.

  He pointed out a lot that the home inspector missed, stuff that could be done to make the home better and where to get it.  He is a contractor in a neighboring town and was able to give me a ball park guess on the costs and who to call.  

On my next investment I will have him (or someone with similar experience) go through the home, before the inspector.  

My wife and I were put into a similar situation down south of you. We decided to sell, and take the equity and do a house hack with a duplex. The deal has been good so far and we are happy about it. But the duplex was definitely a downgrade from the house with the good equity. If I could have bought an investment property such as a flip or a good 1% to 2% deal with a HELOC I would have done that. Because then we would not have had to down grade our living situation. But the circumstance did not permit. We are learning a lot with our duplex, stuff we were willing to learn first hand. I hope this helps in some way. You question sure helped me think of things that can be done with the equity. Thanks!

I can think of 3 based on the market I am in.

1. Foundation issues.  I am not sure how building is in other markets, but certain subdivisions in Cedar City Utah are prone to major settling.  And people avoid those neighborhoods even if the house has no foundation issues. 

2. The Local market is declining.  Ken McElroy stresses studying the local market in his book The ABC's of Real Estate Investing.  Perhaps a large company has moved on to another state or has closed.  (i.e. Sears and Kmart)

3. The house is awkward.  Its on a weird piece of land, or right next to a railroad track.  I looked at a house once that was in a great location, and aesthetically pleasing, but it was not what it seemed.  They claimed it was a 3 bedroom 2 bath house, and it was priced as such.  But when we walked through the house we discovered that 2 of the 3 bedrooms were really just one bedroom split in half by a glass door and only one half had a closet.  So it was a 2 1/2  bed 2 bath, and overpriced.  

If you find out why it has been on the market for so long, let me know.  I would love to know!

I am no expert on this but maybe we can help each other's understanding.  

When qualifying for a loan, the mortgage officer makes sure your debts do not exceed 30% of your total monthly income.  So if you bought a house that had no previous rental history they would look at just your income to qualify for the loan.  If your income were $4000 per month, you would qualify for a monthly mortgage of $1200. ($4000 x 0.3= $1200) 

If you try to refinance your home, and the monthly mortgage exceeds the $1200 they will not approve a refinance.

The goal of a BRRRR is to buy a home who's ARV is $1200/month, but you buy it for $750/month. That way you have already been qualified on the income side of the deal, and you will have no problem doing a refinance on the property.

You Qualified for - $200K based on your income.

You Bought the home for- $105K 

Down Payment-$21000

Home ARV is- $185K

Refinance is 80% LTV = $148K

In this example you can do a cash out refinance up $148000.  So you can recoup not only your down payment of $21000, but an additional $43000.  That can be used on the next investment property and you can do it again and again.

I've included a link that goes to the question of how long you have to rent a property before lenders start counting your rental income.

https://www.biggerpockets.com/forums/49/topics/333839-how-long-before-lenders-count-rent-income-towards-dti-ratios

Great advice Andrew B and Andrew F.  I am doing those things and have learned a lot already.  I definitely need to honor the lease of the current tenant.   

Hey there Bigger Pockets Community!  This is my first discussion on the forum, and I'm here to talk about my first House Hack (which is under contract.)  We are Inheriting some tenants who seem great so far.  The contract with the previous owner ends in April 2019.  Do I need to honor the lease contract of the last owner? ( which has a lot of stuff I would change.)  Or, can I just have them sign the new contract which would have a rent increase and pet deposit/fee?  I live in Utah BTW.  Are there any members who have had the same issue?  How did you handle inheriting a tenant?  What would be the correct way to go about a new contract, and any other advice about house Hacking ext...