All Forum Posts by: Brendan J.

Go to your local REIA. Find an investor there that is a real estate agent as well. Build a relationship and begin asking them to run comps for you. Being an investor themselves, they will have a much better understanding of what it is you're trying to do.

I should have also said that the 50% rule assumes that a property manager is taking care of the rental. If you will be collecting checks, making service calls, etc, you could safely take off 5%. Make it into a 45% rule.

David,

Yes. Taxes and insurance are calculated into the 50% rule. Debt service (Principle + Interest) is the only thing not factored in.

Also, this goes without saying, but any repairs that are necessary to get a tenant in the property INITIALLY are not factored in. However, future capital expenditures are.

Shelly,

You mentioned selling your current home and starting to invest elsewhere. Have you run the numbers on you current property to see if it would be worth renting out? If so, you'd already have 1 rental up and running.

Satchie,

Perhaps you weren't logged in correctly when you posted? Everthing seems to be in order from my point of view. Try a couple more posts out and see what happens.

I like Bill's idea. Re-Fi for some working capital, and don't sell your current property for a loss. If you were dead set on the nomadic lifestyle of moving from house-to-house, you could even rent out your home and make some extra cash in the process.

Are you looking to secure financing for just the purchase, or the purchase and rehab?

If it's strictly the purchase, you shouldn't have any trouble with conventional financing. Make sure to look for pre-payment penalties. I haven't personally heard of any banks that won't lend to you anymore because you've quick-payed a loan.

Welcome David. Best of luck to you here on BP.

About 5 years ago, a personal buddy of mine was going on a trip to Belize. Before leaving he deposited $2,000 into his .......... BoA personal checking account.

He was very careful to not spend more than the $2,000 he had alloted for the trip, but after returning home 15 days later he was greated with dozens of those tear-the-sides bank notice letters.

Long story short, BoA lost his $2,000 intial deposit which never posted to his account, as well as, charged him for over 35 seperate overdraft charges. $1,250 in overdraft fees, as well as the $2,000 intial loss totaled $3,250 that BoA was screwing him over for. He had lost his deposit receipt and had no way to prove his misfortune.

There is no resolution to this day. He has since moved banks and carefully saves all bank receipts until they post to his account. Ouch.

Steve, I agree with you. But, isn't this business about mitigating risk? Sure you might miss 1 or 2 months of rent per year, but haven't we planned for that? We do our due diligence and buy properties correctly because we can afford to have a property cash flow 10-11 months a year and still come out ahead.

While I agree that someone who is too gung-ho about using others money can benefit from hearing about frugality, and planning for missed income, I somehow think that we don't need to warn a 500 lb person about anorexia.

If the man is REALLY focused on in the free and clear, why not expand his horizons just a tad? I don't think it could hurt.