All Forum Posts by: Nicholas Miller

If the furnace is gas I want the water heater to be gas and the stove to be gas...  If just the furnace is gas and nothing else many tenants like to turn the gas off in the summer to avoid the $25 minimum payment.  However, if the heat is electric it is far easier to add an outlet for the stove and swap out the water heater to electric so everything is electric and you can cut out an entire utility...  Gas is far more efficient than electric however a lot of people think that by having everything electric an apartment is superior.

I have had more luck with used appliances from CL than new from the store.  Even if you get a dud you can normally find a decent unit for 1/4 the price of a new so you could replace it 4 times before you break evem

I think you should buy it as long as you are not dreaming up the ways you will spend that $10k of "profit".  Plan on spending a lot of that money on maintenance and understand that this first investment property is more like a class at the school of hard knocks than a quick way to up your income.

If you manage this one right you will probably make a good amount of money during the life of the property and if you learn from your mistakes on this one you will probably make a lot of money over the remainder of your life.

Think of the $17,000 down-payment as tuition 

During my college days I bought a house and rented to friends by the bed... they liked this because they saved money by not needing to rent a SFH and I made a lot more from the unit than a single tenant would be willing to pay HOWEVER if you are going to school to get your MBA you need to consider your opportunity costs when looking at real estate. If you can buy a place below market value, rent out rooms to friends and resale at the end of your time at that school you will be in a great position.... If you attempt to do a flip, become a landlord or try and get into wholesaling I think you will be wasting a lot of time and energy and distracting from the value your MBA could bring in the professional world.

The best thing you can do is send him a few referrals.  If you do not know of anyone to send his way I would recommend sending a gift card.  First, if its a gift card I doubt he will need to split it with his broker and if it is under $200 I believe you can get some sort of tax benefit.

Also, with a gift card you can buy at a discount (raise.com, you can get quad fuel points from kroger or if you are a member of Costco they normally have gift cards to local restaurants for 20% off the face value so a nice gift can look like a great gift).

The worst thing you can do is say "thanks" walk away and then hit him back up once you need more free help.

A few years ago I bought two houses using a 0% introductory offer from a credit card company (they were big lines of credit but the numbers worked).

Once the 0% offer was over I called up the credit card company and got the interest rate locked in at 6.25%.  The houses had a positive cash flow from day one till I sold them for a little over twice as much as I bought them for.

I took the income from the two houses and bought my current residence (also bought under value with an owner occupant priority from HUD).

While I do not own the houses I still have the debt however I am not complaining about the payment or the interest rate considering the rate of return from the two houses and the current equity.

The only down side is what it will do to your credit (over balanced revolving loans does not look good on a credit report) and you will want to make sure you have plenty of access to cash to fix a roof, evict a tenant or replace the water heater.

If your starting out, buying a long term hold property is probably not wise.  If you are renting a place right now and do not have a lot of money to buy....  You will probably not have a lot of money to replace water heaters, the roof or evict all of the tenants at the same time for failure to pay (I have a small number of rentals and I swear somehow they all stop paying rent at the same time).  A rental can be the road to financial freedom but if your pockets are not deep enough they can quickly be the road to financial imprisonment.

Your goal should be to make as much as you can with as little risk possible without adding to your workload (opportunity costs). I would recommend looking into owner occupant priority SFH's as a way to capture equity at closing.

Buy a property under value, (exclusive listings from HUD www.hudhomestore.com or priority period from fanny www.homepath.com ) live there for a couple of years then flip it. Wells Fargo REO's also have an owner occupant priority however you will need to find a realtor who knows how to find that kind of deal as they are not marketed blatantly as a Wells Fargo REO

Keep in mind not every house is a bargain on these websites however 51% of the homes owned by HUD sell within the first 45 days ( stat taken from last 5 years of sales history for the Upstar MLS of Northern Indiana )

A SFH will be far more liquid than a multiplex and flipping first will give you the ability to live a little more comfortably, with a lot less risk and a road to having capital through equity in your own home... this can be turned into investment capital through liquidation or refi.

When we purchase buildings with tenants we are obligated by law to honer the existing lease terms and our lawyer has recommended the privious landlord assign the leases to us.    

If you are buying a building that has no lease agreement or simply a verbal agreement you could be looking at a legal nightmare.

Yes, you should be worried!  The longer your employment the better off you are in the eyes of the bank.  I have not gotten a bank loan in years so I am not 100% up to speed on this but I believe it can negatively affect you for 90 days to as long as 2 years. 

If you are renting you could always buy a property under value, (exclusive listings from HUD www.hudhomestore.com or priority period from fanny www.homepath.com ) live there for a couple of years then flip it.

Keep in mind not every house is a bargain on these websites however 51% of the homes owned by HUD sell within the first 45 days ( stat taken from last 5 years of sales history for the Upstar MLS of Northern Indiana )

If you want seller financing I have a seller in Indiana with 100+ unit buildings with 20% down and the remaining balance amortized over 40 years at 8% interest...  Last I talked to him he had two large commercial structures but that number changes on a daily basis.