All Forum Posts by: Bill B.

Credit card?

Insurance companies are weird.  I was denied a couple months ago by Allstate for fire risk for the first time ever. 5 miles from a major casino in the middle of a large community in the red rock area of Las Vegas. 

It’s California. Get a lawyer or a PM involved, or both. It’s too easy for you to “oppress” the poor tenant and be liable for who knows what kind of financial penalty. Increase the rent as much as possible, get the “fire or health hazard” cleared up, get a new multi page California legal lease signed, etc etc.  

I don’t care how extra nice you are to a tenant, it will not matter one bit once you try to enforce rules, raise rent, evict, etc etc. They will forget years of good treatment in a minute. 

But your main impetus is NOT to buy a new primary home. I think you just answered your own question.  As you’re obviously going to turn it in to a vacation home or a rental almost immediately, get that kind of loan.  Otherwise buy a new primary and turn your current home in to a rental or vacation home instead. Win win. 

Ps. If your home can’t be repaired from “hail damage” in less than 20-30 days get another quote. It will easily take 45-90 days to buy a new property. How in the world would it not be repaired by then?

I'm 6 months in to collecting 7% on a 75% LTV note with a five year balloon…

The only way someone could convince me to sell the note would be to offer 6% or more over the current balance. (I assume I can get 4% guaranteed from the bank so that covers 2 years of lost interest income.)

Personally. I’ve never seen someone offer the current balance, much less a premium. Even on a performing note, at a decent interest rate, where a failure to pay or failure to payoff the balloon would result in massive gains. 

How about you?

That’s the plan. I just feel bad for them. They thought they were paying for insurance to protect themselves.  They even chose a respectable company not a fly by night company.

While you’re looking at that make sure they include water damage. Seems obvious right?  Had my first claim against a tenant’s renter’s policy last month. It was through USAA. I figured it’s a big reputable firm no problems expected. 

Their response? We don’t offer water damage coverage. We will send you $1,000 (towards the $6,500 loss.) that we send when the loss shouldn’t actually be covered. Tenants were shocked they’ll be on the hook even though they had “insurance”. 

I would assume they operate along the same lines as LTRs. The more expensive the lower the returns. Cheaper properties “always” have higher returns. Otherwise why would anyone have cheaper properties?

if I could have one $6M property and make the same or more than my twelve $500k properties, I’d make the swap tomorrow. But everyone draws a “work for returns” line. I could probably make more with twenty four $250k properties. But I’d want to make 50-100% more for the extra work. Plus you’d give up some appreciation. (They can’t be both cheap and quickly appreciating.). You also run in to the problem with cheaper properties that many repairs cost the same as they do for properties worth twice as much with double the rent.  So there’s a “Goldilocks” zone where returns are decent but capex/repairs don’t kill you. 

Hopefully you’re getting 25-50% off a comparable condo an owner occupant could buy? Don’t forget. 1). When you got to sell, 90% of the buyers can’t buy your property. 2) The only people who can are investors who want a great deal. 3) The current investors haven’t already bought it. 

Your insurance won’t cover their loss and their lack of insurance is why they will be out of pocket for their losses. Your don’t pay for their loss because they “forgot” to buy insurance they said they would. Assuming the roof is currently leaking get the window fixed and then worry about what’s next. 

Be CAREFUL of every friggin roofer on the planet. They know you're not paying, the insurance company is. So while you might only do a $500 repair out of pocket they'll tell you they can get the insurance company to pay $5,000 for a new roof. WAIT until you hear from the insurance company inspector get another quote. DO NOT sign any kind of POA or subrogation to the roofer to act on your behalf.

With a $7k deductible I would call a roofing company and ask what has to be repaired, I’m paying out of pocket but don’t want future water damage. You may suddenly get a $1,200 quote plus the window. Do you care about “marks on the fence or gutters”? Enough to pay out of pocket?