All Forum Posts by: Alice K.

Originally posted by @Joe Bertolino:

House hack a 4 plex with 3.5% down.

According to my mortgage broker, multi families get a bump up in interest rate. So, it would have probably been more like 4%. _tear_

So, if all of the people here are saying Memphis is "on fire", then doesn't that mean boat-loads of competition? I've had it to here with spam from companies in "hot" areas peddling their "amazing deals". </rant>

I was looking at Austin as my industry lives there, but as @Jerry Padilla mentioned, wew, those property taxes had me shy away! 

Like you, I wish I could invest elsewhere and look at them whenever I feel like. The grass is always greener (actually, most certainly greener in areas that aren't in a drought) Also, if you're an agent, I assume you already have deep connections with the businesses / owners there?
I would imagine it would be time consuming to start from the ground up. 

Similar to what the others have mentioned--

I don't do this but have read a bit about it out of curiosity. 

Tips from what I've read in the past maybe one of these will spark an idea (You probably know most of this if you're really going down the wholesaling path):
* Keep your ears to the ground / look drive around (as was mentioned above)
* Put up signs (I hear in some places, this is illegal. I personally dislike signs, they just feel dirty and remind me of the real estate bust but apparently they work. Maybe I'm just jealous I don't have that sort of )
* Mailers (this can get super pricey, depending on your region it can work. Others have reported spending thousands and getting nowhere.
* Talk to everyone you know 

* Find a mentor and/or consider being their bird dog -- they'll teach you the ropes, or they'll try to sabotage you (or maybe someday you'll both get to fight over deals))
* Keep your actual job (you probably know this since it sounds like wholesaling is boom or bust)

* Look at databases of people who haven't paid their taxes.
* Make calls, and more calls, and even more.
* Be ethical and make it a win-win. 

@Huy N. Holy moley. You are brilliant and deserve every penny! I hope you are feeling better and your chin is all healed up.

Also, apologies. I'm on public transit and apparently can't delete multiple messages via the BP mobile app.

I use the Mortgage App by Zillow. Multiple times a week these days. I highly recommend it because it also takes into account the PMI (if you put less that 20% down). As for the default rate-- up it by 1% to play safe. I've found internet prices to be nothing like what local mortgage brokers offer. (As they add to the percentage to cover the part where they get you the loan... Ah, real estate...)

Spokane-semi native here. Count me in.

Mini plugin: If anyone here is looking for web help, social media assistance, etc for their investment business just let me know!

Cheers!

I'm a US-based person, but I've just had this discussion with my mortgage broker. I told him, although I'd prefer to do 10% down, I really didn't want to larger mortgage payments.

Question: Do you have enough to pay the down payment? If not, then reconsider if you should be getting it. If you do have enough cash to comfortably pay it, I myself would (not a CPA but my two cents). In 2 - 5 year run, that PMI will eat away at your cash flow (I'm assuming you want cash flow?)

In America, you can get it removed once you hit 20% or after 2 years (I hear a required 2 years of PMI payments regardless of getting to 20% of not).

Sure, you can use that money on other things, but why pay the bank more than you need to? Unless, the tenant situation can easily cover the PMI costs! Then, I wouldn't be so annoyed by it.

Also, as far as tax deductions-- I thought it was deductable, but some in here say it isn't. Regardless, let's say it is-- say you're in the 30% tax bracket. You're still paying 70% of that PMI cost.

Hope this helps!

A Passive Income Thought 
Here is a thought as a bystander, some flaws, but the folks in this thread have already addressed them above. 

Say your goal is truly passive income, and she's profiting off of your pad. If she's running the operation, and living there, chances are she'll continue to keep it spick and span. Now, you can get greedy (as I probably would be in this situation, putting aside the worry that one of the Airbnb guests are a bad apple and destroy the place / stay around and you have to evict them).

It could be a win-win. Definitely do as the others say and update the lease so you get royalty. Maybe throw in some items such as, "Any legal fees are up to you to pay, eviction, etc." AND "Any damage incurred you have to fix" AND you can inspect it once a month (if you're worried about it) AND update the security deposit. Just an idea, I'm sure a lawyer can help you with reasonable items. 

I have a few friends who have said they do just this. The owner of the homes gets what he wants (rent to cover the mortgage and costs with a bit on the top) and this guy manages and makes money off of renting them as Airbnb's and is responsible for things that break and trusted to keep it in tip-top shape, etc. 

Sure, he's making good money for not too much work, but the owner doesn't have to do anything. And, he has guaranteed rent. 
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But, if you're still concerned, you're not alone. Here is a NY news story on landlords kicking people out. (As I'm sure you've already investigated for research.)

Originally posted by @Jeff B.:

EQ, as you said EXPENSIVE.

Ask yourself, "What's my equity in the property?"  

1. if your fully leverage as much as possible, what are you protecting, the Bank?
2. if your all-in w/o a mortgage - - BY ALL MEANS EQ

Then there's all degrees in between...

 Good point! I always think, "Oh no I don't want to default!"