Fixed Rate Mortgage Payments Increasing for New Investor

[Jeff Rocheleau]

I swear I spent hundreds of hours and watched dozens of videos about getting started with multi family real estate and NEVER came across this issue, WHICH HAS HAPPENNED TO ME TWICE OUT OF TWO PURCHASES.

In 2022 I bought my first 4 family which I occupied. The other 3 rents barely covered the mortgage payments, but I was living (nearly) free so I was happy - until 3 months later when the town reassessed the property and my mortgage payment went up by almost $300/month or 10%.

Fast forward 2 years and I buy a 3 family which I move into. The 2 rents nowhere near covered my mortgage payments, but the income from my first property offset the difference - until last month. The town reassessed the new property adding $200/mo to my payments, AND my insurance premium on the new building doubled, increasing my already too high mortgage payment by almost SEVEN HUNDRED DOLLARS/mo!

This blows my monthly budget out of the water. I was forced to sell the second house and move back into the first one. Lucky for me I didn't lose any money on the sale, but I am pissed at Bigger Pockets and their kind for not making us newcomers aware of these kind of real estate pitfalls.

[Joan Sambo]

Lol it sounds like you are lashing out at BiggerPockets for your own lack of research and knowledge on how these things work. Your mortgage payment is really just PI (out of PITI). It is your option (or your lender in some cases) to include an escrow account and collect the taxes and insurance payment which are not paid monthly btw, and include it in your total mortgage payment to the bank. The bank only keeps principal and interest which is what never changes in a fixed tate mortgage.

Technically, your debt payment does not go up, your ownership obligations like insurance and taxes can and will go up. 

Next time do a little bit more research before buying whatever just for the sake of buying and then coming back here blaming this community for your lack of research. Or just don't invest at all if these things are too hard to comprehend. We can't all be investors..