All Forum Posts by: Alan Ouellette

My wife and I just got pre-approved for a mortgage. We are looking for a townhouse to rent out for income. I just received the pre-approval letter from the credit union and I want to see what people here on bp think. We're re in NH and the northeast is notoriously expensive, but for a loan of about $206k, do closing costs of $9000 sound about right? I does include prepaid property taxes and the 1st years insurance premiums. What are you seeing in your areas?

@Christian Allen

Also, check with your insurance too. See what kind of coverage you might have concerning this. Can't hurt.

@Christian Allen

I would agree with several of the above. She needs to talk with her insurance company. I would cya and have documentation, like receipts for all the mitigation you do, to show you are putting in a good effort. Other than that, maybe seek out a rodent professional.

Good luck!

@Sam Fickel

Hi Sam,

I'm not ready either. I've been saving for a while, educating myself, etc. I decided to go for the BP Pro/Boot camp so I could get back to the calcs and get a few steps closer. I hope it will give me more motivation and knowledge than just rewatching all the YouTube videos.

@Rafael Nava I agree with @Bjorn Ahlblad on the ten day notice. Have you spoken to the prior owner to confirm no notice was given? The seller might have not wanted to mention the loss of rental income on the eve of sale. Other than that, as long as their unit is in good condition, I would say return the funds.

@David Cozzi

In all honesty, almost no one outright owns a property. Anything with a mortgage might not even really be "owned". Someone who just bought a sfh and put their 20% down, is a minority shareholder in the property even though most would call that person a homeowner.

A lot of the Big Boy investors are highly leveraged so they may control 1000+ properties, but no, they don't own them in the real sense of the word.

@Christina Zimmerman

If the pmi is only $50, you could consider it part of how you calculate the rent. I've never done a rental with PMI but loans here in NH are usually based off of cost and refi is off of value. The appraisal is just to make sure the bank is covering itself and not getting into a bad deal. You are pretty close to the mark for it falling off anyways, how long would it take?

@Greg Weik this may sound jaded, but I believe it's to make sure they don't use the money for other purposes. Yes, it is a mountain of work for the landlord but the program was set up to assist tenants who were born into the lower classes and also those that had opportunities but made such horrible decisions that they became lower class. For better or worse, the program operates like a nanny, trying to take better care of the tenant than they might take care of themselves. Being poor carries with it a lot of stigma and assumptions about being unable to handle regular life skills like running a budget. For some, it's true but absolutely not for all.

@Andrew Magoun

Wow, Congratulations on your portfolio. That's not an easy number to reach.

Best wishes!

@Andrew Magoun I agree that we need to know your goals and concerns. Are you really focused on cashflow? It's not everything. My wife and I focus on a mix of flow and equity. She's big on needing the security so that's part of our compromise. Also, what are the terms of the 10 year fixed/20 year amo post the first 10 yrs? Is it prime plus 1 or something else? While I highly doubt we'll see rates this low for another 5-7 years I can say, I've been focusing on the 15-20 mark for payoffs.