All Forum Posts by: Brian Campbell

Thanks for the responses! For now, I'll stay with what I have.

Thanks for the responses but I'm still not sure what way to go. I just want to be able to pay my loan off if there is a total loss or be able to repair the home if there is significant damage to the home. IF there is a considerable savings for an ACV policy, AND other investors with more experience and knowledge than me (won't take much) recommend changing to ACV policies, I would definitely strongly consider changing. Otherwise, I'll stay with my current replacement polices.

I have 5 rental properties and 6 houses I've sold on contract. My insurance guy has talked me into carrying replacement value insurance. Most of my monthly ins. cost average to be around $45-$50/month for most properties. I do have a 3 unit building on a main st. in a small town and ins. for that property is $114/month.

My insurance guy has always used the hail damage situation.....replacement coverage would get me new roofs while cash value policies would mean a big out of pocket expense.

He also said most companies won't insure for cash value.

I'd like to get some advice on this from you experienced investors.

Thanks!

Looked at a 4/2.5 house in a very good neighborhood. They had been renting this house for $900/month and the tenant has moved so house is vacant. When the seller called me she indicated she wanted 139K for the house. However I think the house might sell for 110K if she used a realtor.

When we met with the seller to look at the house and I asked her what she needed, she seemed a little more motivated. Said her husband wants to keep it as a rental but she wants it gone. Told me to make her an offer. She said she might consider selling on contract. 

I'm thinking of offering to buy on contract for 102K with 2K down and monthly principal and interest payments of $600 and a balloon payment in 2 years. Equates to 6% interest amortized for 30 years. Insurance and taxes would be an additional $150/month. (Our cost $750/month.)

I believe I could resell on contract for 120K with a down payment of 5K and PITI payments of $900. My concern is that there aren't lots of folks in our market that can pay that kind of monthly payments.

I'm interested in your thoughts on this deal. Thanks!

Great information all -- Thanks!

Is it possible to move money from a Roth IRA and a 403B account into an investment property without early withdraw or tax penalties? I have around 15K in several different funds that I believe would serve us much better if they were used to help us purchase more properties. I have a small rental that I could pay off with this money. I've had two bankers tell me that I could use a free and clear property for leverage for additional loans. Banks financing our deals at this point seems to be the most cost effective route to go. Maybe we'll find a private lender or hard money lender at some point but right now, we don't have any kind of relationship with any other lender.

Hopefully will have some of you experienced investors give me some input on this deal. Thanks!

I'm meeting with the seller and not sure how to negotiate this deal. The type of renter these houses will generate will be lower end renters. The houses aren't in the best neighborhood and the seller makes only the improvements needed to pass inspection. They don't need any work but probably won't appreciate much so I'm primarily after cash flow.

The seller and I will be sitting down on Saturday and seeing if we can come up with a deal. The seller has retired from his job and wants to sell his rentals--he seems motivated to sell. Said he would be able to give me a better deal if I was able to purchase more than one property.

Property #1: an up/down 2 bed up/down duplex and the owner pays the heat/electric/water/garbage. This property was a sfh turned into a duplex. It's an older building but the furnace is newer and the electrical has been updated. Part of the roof needs new shingles. The bottom unit rents for $650 and the top for $625.
Expenses include:
Taxes : $57
Insurance: $60 (est and this may be high)
Heat/Elect: $300/mo.
Water/Garbage: $100

Total Income: $1275

I believe I could purchase this property for around 30K.

Property #2: Older 3 bedroom home. Doesn't need any immediate work done. Has an older furnace and water heater. Electrical has been updated. Rent is $595. I think I could purchase this house for around 25-30K.

Property #3: Smaller 2 bedroom/2 bath home. New furnace, water heater, electric update. Roof is good. Rents for $495. Purchase price would be around 20K

Property #4: Seller said he really wants to sell this one--might be able to pick this up cheap. My wife doesn't think we should buy it because of the neighborhood it's in. Rent is $550. Seller wants around 25-30K.

I work with a small local bank and would be able to get conventional financing. My terms are generally around 10% down, depending on what the properties appraise for, and 5.5% interest over 15 years.

I would appreciate you experienced investors helping me determine a purchase price that makes sense.

Thank you!

With $500 left over after expenses it seems as though this would cash flow. I'm guessing the national average for maintenance, vacancy, management, etc prevent this property from being a deal.

Most of my properties do not meet the 2% rule but have provided me a positive cash flow since 2004. Maybe I'm playing Russian Roulette and need to rethink how I'm investing.

Thanks for the analysis! Getting a loan for this property will not be a problem as I've done several similar deals with my bank and the house has been inspected by the city. The rent for this property is at the high end of our market rent but includes all the utilities so It's hard to say if I can increase it. The house is not in the best neighborhood--my wife won't let me buy anything in too bad a neighborhood and she didn't nix this one.