All Forum Posts by: Steve Vaughan

Sounds like someone may have buyer-itis.  I have had this affliction before.  Sleep on it, take a breath and listen to those more experienced than both of us. Now that I have done this landlording thing for a while, there is not way I would do all that's involved with tenants and toilets for a 5% return. Ever.  The 5% return may even be in question.  Factor in management costs (even if self-managing) and the return is 0 at best.  Factor in water heater replacement or whatever and it's negative.  Gotta remove the emotion and pass on this under present terms. 

I don't do sub-2 buys or sell on a wrap when a HELOC is involved. The risk of it being discovered and called due and payable immediately is way too high.

Congrats @Joseph Gibney ! I am on the opposite end and just went under contract to sell a little 3-family.  Just a step in acquiring a sister 7-family I've had my eye on for a few years.  Real estate is dynamic and ever-changing.  Gotta stay in it, live and grow with it!

There may be a different way to give equitable interest in the property to satisfy the ownership clause in the bi-laws.  Would an option to purchase do it?  You could record a memorandum of option that would show up in a UCC title check.  Because a manufactured home on a leased lot is only personal property like a car,  could they be part of the registered owner portion with you as legal owner that would insure you were covered?  We need input form some of those mobile home investors!  Gotta be a way!

@Michael B. , I have done the same thing, using CCs for down payments.  I used the checks they provided for 2%-5% fees.  Once I bought outright with a cc, but there aren't any $30-$40k houses here anymore I would touch. Felt good to have a paid for house and motivated me to payoff the cc balance of $23k quickly.  What I did was diversified my credit lines.  If you  have everything with Chase, they have the right to penalty price you for using too much of your available credit lines with them. Poof go your intro terms.  I also had a card that bumped my rate to 29.99% because they were in financial distress during the recession.  The point is, these lines are risky.  I wouldn't do it anymore as I've grown more risk-averse and established. It sounds like you  have been prudent with your money and saved over time.  That's great!  If you do decide to do this, do it carefully with a specific plan to pay them off quickly. Don't stretch your avaiIable credit with one issuer. I would love to see the cc companies lend you money for very little interest!      

I see Joe posted while I was writing.  Thanks, @Joe Villeneuve !

As our friend @Joe Villeneuve says, "equity is where your cash goes to die." The first idea that crossed my mind with your standard 20% down, finance the balance conventionally is to ask the seller to be in 2nd position for the $100k, and depositing a portion of your $100k in the lending bank as a secured portion of collateral for them that decreases over time. They won't like you having nothing in it, even if they are secured by an 80% LTV. Maybe offer the bank to deposit $50k, allowing you to decrease that amount by $12,500 over four years? If you are in a good marriage, there are more options available to you by separating the borrower and ownership? There should be lots of options for you without having to tie up all of your hard-earned cash!

If you can wholesale, you have options! You don't have to assign away every deal you lock up for a one-time payment.  We all need the ability to find deals at steep discounts.  That is the core of what we do, whether it be to fix and flip or buy and hold or assign.  I do not keep everything I come across.  Upper-end homes do not work for rentals and I do not renovate to the standards of that retail buyer.  Wholesale it is!  My point is, if you are able to wholesale, you are able to fix and flip or buy and hold or whatever your core strategy is.  Multiple options and exit strategies are then available to you.  Wholesaling in not easy and I have great respect for those that do it.  I sometimes scratch my head as to why one would do all that work for a one-time payment at a high tax rate, but I am a long-term cashflow guy at heart.  Kudos to you wholesalers!

Just replace it if it's made of surgical tubing rubber.  If braided and quality, I would disconnect the pull-down and bring it into the habitat store or a box store.  Cheaper and faster I bet to replace it. If it's in a rental, replace immediately and fix later.    

As close to this as I get is charging a last month's rent as well at move-in if someone is higher risk. (1st time renter maybe, or income barely meeting 3x rent).  For animal-friendly places, we just go ahead and up the deposit requirement.  If they end up not having an animal, we can reduce.  I'm not going to argue with an applicant whether a dog is a dog or not and get in an argument about pet deposits.  One  other thing, we never have deposit equal to the rent.  It will be misunderstood as a last month's rent at some point.  Have it be a little less or a little more, but never the same.