All Forum Posts by: Adam Smith

Awesome!!!  Congratulations!!!  We have one rental but would love to find a good Flip!!!

Keep us updated on the progress!

Very inspiring!  I am still thinking of how to talk my wife into living in a construction zone!!  The end goal is the motivation!!!

Great Job!

Personally, I would look at purchasing a duplex (or triplex?) and live in one of the units and rent out the other(s).  Basically, buy a rental and primary residence under one roof.  Find a deal where the rental income will pay either all or most of your mortgage...thereby living for free or almost free.  This will actually free up some income to invest in another property.  The loan will also be a typical (non-commercial) loan if it is a 1 to 4 unit property.

Some things to take into consideration 1) Living next door to your tenant; 2) Living in a multifamily (not sure if this is an issue for you).  Just make sure that you do your due diligence and know what you are buying (neighborhood, repairs, etc.) and rental rates.

There are A LOT of discussions on BP about this "strategy".  Search for "house hacking" and I am sure you will find more information than you know what to do with.

@Nick Foundas 

You are correct. During the investment loan process they knew we were using the entire HELOC for the down payment. The payment they calculated for use in our DTI was more than the interest only payment that we had to make on the HELOC. I guess they do this since it is an interest only payment at some point we need to pay the principle.

For us this was a really good way to get an investment property.  Between bonuses and closings (my wife is a realtor) we are just throwing money at it and should have it paid off this year.

Hope this helps.

Sorry @Jerry Padilla actually mentioned about the bank taking into account rents received.

We just took out a HELOC on our primary and it sat unused for 3 months before we purchased our first investment property. It did not hurt us getting the loan for the investment property but our bank did have a calculation they used to estimate the minimum payment (even though it is interest only). The minimum payment is low since it is interest only but they had a calculation that added about $100 to the interest only payment when looking at our debt to income (DTI). Not really sure how they calculated it.

This was ok as we planned to pay more than that and included it in our own DTI calculation.

As @Curt Davis mentioned they did take into account 75% of the rents (based on rents listed in appraisal) minus mortgage. 

In our case we didn't realize they would do this so we didn't need the additional income.

Good luck!

We used Quicken for the loan on our primary home 2 years ago and everything went smoothly.  Since then we have established relationships with local lenders since my wife is a realtor now which we will use for our refi's.  Quicken was good, it is just nice to discuss options face to face.

A funny side note, one conversation with quicken, the woman with quicken told me "love you" as we were getting off the phone! She quickly admitted she was texting her husband as we were talking. 

Overall it was good service and we had no problems for our fairly simple, conventional primary mortgage (we only had one mortgage prior to compare it to).

Good luck on the flip!

Welcome to BP @Dan Mackin   While I do not have a lot of posts I have learned a lot from the BP community!  My wife and I live in Firestone (10 miles from Erie) and have just purchased our first rental home.  Actually, just closed yesterday and have the signed lease and first months rent and deposit the same day with our first tenants.  With my wife as our realtor the buying process was not scary.......but screening and going over the lease with the new tenant was a different (exciting) experience.  We feel BP really prepared us for this. 

I agree with @Tara Hall you have to invest in what you are comfortable with and what you are looking for in an investment.  For example, renovating a home in old town Erie could take considerable work on an old home.  Will you do the work yourself or hire contractors?  Do you have experience managing contractors, etc.?  There is a lot of information on BP so just search for it.

Living in a property with an accessory dwelling  is a great idea, if you don't mind having a tenant so close to you.  Just depends on what you are looking for, what your goals are and comfort level.

We have looked in Erie for our primary residence and rentals and have found (I am sure you know) that even though old town is in Weld County, the west side of town (west of County Line Road) is in Boulder County which our experience has shown has higher taxes and different regulations if you are in unincorporated Boulder County vs. unincorporated Weld County.  Just something to consider.

Keep us posted on your thought process and what you choose.  I am fairly familiar with Erie and have done some work in the Town (Erie Library).  We are so close that if you ever want to get coffee and share ideas send me a PM. 

Set up key word alerts and search for anything you have questions about. The information is on BP.....you just have to find it.

Good Luck!

Thanks @Marc Littmann The only thing I can think the orange-red glow could be is from the Xcel peaking power plant in Frederick around WCR 19 just north of Hwy 52. Not sure if they burn off extra gas?? I am a civil engineer with emphasis in structural although I have never practiced structural engineering in the "real world". I have many years in land development, municipal, hydraulic and dams and reservoirs. I think my education (and work connections) will help when looking at properties!

@Mark Ferguson Since I live and work in the Tri-Town area I consistently look for cheaper properties in the area and I can say they have been drying up in the past two years. My wife has listed a few (they didn't meet my criteria and we are a little low on cash) and they are under contract within days, if not the same day they are listed. I run numbers on a lot of properties when they are listed and in my inexperienced opinion I think you will do good on it. From what I see currently, there are no properties for sale in the area below $150k (minus property where you don't own the land). Good luck and please update your blog with the progress if you have time.

@Mark Ferguson I saw the video on your blog of your latest flip. It is one block from my office. I look forward to seeing the progress and blog updates!