All Forum Posts by: Andy Collins

This is a question I think many of us have right now. I have a short sale that's been under contract for nearly 6 months, hopefully I will close on it in early April.

I am a buy and hold investor, but with this house, I could easily net $25k from flipping it because prices are so crazy. My realtor (of course) thinks I should flip it,,but then it would also be a great cash flow property.

The problem is anything that fits my parameters for a rental, would also be a great flip,,but if I flip it, finding the next house could take a long time,,,,,

There is no right answer, its really what you are trying to accomplish,,but I have to admit, flipping looks better than ever with prices where they are, but I hate to pay the taxes on a flip.

you know we had the craigslist killer in Boston, set up appointments with prostitutes and killed them,,,do we have a Bigger Pockets stalker,,asking for a mentor then holding them hostage until they tell all of the 'secrets of real estate".....

I bet he is on vacation or busy with work

Return on Equity is the one thing that people seem to forget about,,if I buy a 100k house with $25k down (for this discussion imagine no closing cost or rehab), and it cash flows $5k a year I have a 20% return on my cash,,easy to figure. At that point your return on equity would be the same $5k/$25k, 20%

Now its a few years later, the house is worth $125k, and I've paid the mortgage down to $65k,,,I now have $60k equity in the house (again assuming no cost),,,,if I'm making the same $5k a year on the house, my return on Equity is $5k/$65k, or 7.7%.

The house has been an unbelievable investment, but now you have to wonder if you could use that $65k to make more money with 2-3 houses (and before you say do a cash out refi,,with conforming mortgages you can't do a cash out after 4 mortgages)

Of course you could refinance into a commercial loan, but then higher interest rates and lower term for locking in the rate.

andy

I had something similar happen at my residence, I bought it from an estate, the niece of the owner lived there for the last few months, wanted to buy the house but couldn't get financing.

I had warrants served for her here, etc etc,,,no problem,,then I started getting weird calls from my car insurance company,,they keep asking me about who else might drive in the family, etc etc,,this happened every few months. I finally ask for a supervisor, and told him I had a golden retriever, other than that no person lived at the house,,,he ask me if I knew "xxx xxx",,the niece, I said I knew who she was, but had never meet her.

She still used my house as a residence, and her daughter had turned 16,,the insurance company thought I was simply not insuring her,,,we got it resolved, but he said if I hadn't been with them for many years, it could have caused me problems (they could have found a reason to not re-new my policy because they thought I was lying.,,,,so now anytime a bank or insurer ask me a weird question, I want to know why they are asking

no, do a search and you will find much information.

You can get up to 10 conforming mortgages in your name, however many banks don't do over 4,,this is a good reason to find a mortgage broker that works with investors

Moving in into a LLC while the loan is in your name will do virtually nothing for you as far as liability,,your name is still attached and it sounds like your managing it,,,

I have no experience in wholesaling, but have worked in a home office environment many times in my life.

I have to work by a schedule, I have to be dressed and "in the office" (note dressed doesn't mean a coat and tie, but showered/shaved and ready to go to work) at a certain time (usually for me its 8:30). I don't allow any TV to be on in the house except the one in the office, otherwise I might walk through the living room, see something interesting, sit down and lose an hour).

I have a scheduled lunch, etc,,,I have a regular work week,,,do I ever have lunch with friends, sure I would do that at a regular job,,,but letting yourself sleep late, not getting ready for the day before you "go to work' etc, for me, can start bad habits.

andy

I was reading recently that one of the big bond fund managers was predicting the 10 year bond to be at 7-8% by 2016...of course they are projecting inflation.

This is why long term financing, if available, can be worth the hassle of dealing with the "over 4" rules.

I had a house come vacant this month,,,I showed it 4 times in one day with 3 people putting in applications,,the one thing I really noticed, in years past half of the callers would ask if I took Section 8, of all the calls I got this time ( probable averaged 3 or more a day), not once did anyone ask if I took Section 8 or any other government program.

For about $300 you can buy ACT,,,I love it just because I've used it for years, so I know the program well....it is a purchase, not a lease, so you only pay once (and I currently am using a version from 2004 with no problems)

an LLC can't get a confirming mortgage (say 30 year with a locked in rate),,,an LLC gets commercial loans.

If your on the hook for the financing, personal guarantee, etc,,the LLC won't give you protection if anything big goes wrong,,,LLC's aren't the 'save all' people think they are

If you get financing in a LLC, are you going to not put those on your mortgage applications going forward,,i will warn you the mortgage underwritters have ways of finding things I never thought they could,