All Forum Posts by: Bob Okenwa

The existing lease runs with the property so you'll want to start there and see what it says regarding the rules you're trying to implement. The lease and tenant application should have the information you're seeking and this should have been sought after during your due diligence period.

According to HUD, a first-time homebuyer is an individual who meets any of the following criteria:

*Someone who hasn't owned a principal residence for the three-year period ending on the date of purchase of the new home.
*An individual who has never owned a principal residence even if their spouse was a homeowner.
*Anyone who is a single parent who owned a home with their ex-spouse.
*A displaced homemaker who only owned property with their spouse.

Based on these definitions, I'd say you still qualify as a FTHB.

@Joshua Filkill

Have you looked into LPMI? You won't pay PMI monthly as a part of your loan, but you will pay it in the form of a higher interest rate.

https://www.thebalance.com/lea...

You can also try a combination of loans (piggyback) to avoid PMI, although you need to review the numbers carefully. A piggyback strategy, also known as an 80/20 loan, is just one option. This strategy is not as common as it used to be, but it may be an option for you. A piggyback allows you to avoid mortgage insurance altogether, but your second mortgage will come with a higher interest rate.

@Eric Perez

I'd find another property to purchase and continue to build your portfolio. Rental property investments are a long-term game and rents rise over time, especially if your properties are in Laredo as the incoming population has increased 11.7% from 2010 to 2020.

If you're using your own money to pay down the mortgage and then use more of your own money to refinance into a lower payment, you're essentially buying cash flow. Let your tenants pay down the mortgage and refinance into a lower rate if that opportunity presents itself in the future, although there is no guarantee that rates will ever go back to sub 4 any time soon or ever.

Even if you're hellbent on paying down the mortgage, run the numbers on how much it'll cost you. Just an example, but if you spend 40k to pay down and refi one of the existing mortgages, what will your new cash flow be? If you go from $215/mo to $415/mo, then you spent 40k to buy an additional $200/mo. At that rate, it would take 16.6 years to break even on that additional $200 you're earning. If you put that money into a down payment on another property, now you may have another $200/mo in cash flow, plus a chance at additional equity and future appreciation and future rental rate increases.

Only you will know what is best for you and your future plans. Just hoping to shine some light on something you may have not considered yet. Best of luck.

@Jay Hinrichs

I know you have mentioned in the past that your wife is a top realtor and does a lot of $1M+ listings and she clearly knows what she's doing or she wouldn't have such listings, but for the love of God I wish more realtors understood how to walk a virtual buyer through a home without the need for video or a 3d walkthrough. It's nice to understand exactly where you are in a home when you haven't yet visited it. 

Even better when the lighting is correct and the photos aren't overexposed and you make good use of natural lighting by taking photos at the right time of day. Too many times you see photos where you cannot see into the yard from the kitchen because there's too much sunlight coming in.

The photos should show the best features of the home (curb appeal, spaciousness of the lot, kitchen, living room, walk-in closet, etc.). The luxury listings do a much better job of this since these agents know their clientele very well and do everything they can to put their listing in as good of a light as they possibly can. On the other hand, when you get to the listings at the lower price points, it becomes more of a "I just want this thing sold and I'm not putting any extra effort to do so" kind of deal.

I had a $1M listing two years ago and spent multiple days going over the listing description and photo sequence I felt would be best to market the property. Went through multiple revisions of the ad and I run all ads through a grammar checker just to make sure everything reads well. I'm OCD about grammar and details and do this for all properties regardless of the price point. I want all my listings to be perfect. By no means am I a top agent, but I care deeply about what I attach my name to.

@David Saget

You could go to a lawyer and get one written for you if you would like to get something specific to your needs/wants. Also, BP has leases you can purchase as well. 

https://www.biggerpockets.com/...

 It really ticks me off when I see the terrible agents and their bad listings because the seller is probably not going to make as much as they could or sell as quickly had they gone with competent representation.

@Bruce Woodruff

I think it is a combination of the low barrier to entry, lack of accountability, and the agent only acting in their best interests which causes laziness. I have come across those who don't seem to be fully aware of what's going on and I don't want to insult the intellect of people I don't know, but man it sure seems that some people don't know what they're doing and it ultimately hurts the people they are supposed to protect and work for.

@Bruce Woodruff

I am appalled when I see listings like that! Especially in Phoenix where many of the "regular" houses cost 400k-600k and the listing agent is taking home a 2-3% commission for putting forth such a low effort. 

I've seen way too many listings with the actually selling family in the photos watching TV in the living room or the realtor in the reflection of the bathroom mirror, or the mess you have described strewn about the home. Damn shame IMO.

I don't care about weird idiosyncrasies that the seller may or may not put up with, but the lack of quality photos is my biggest gripe. It costs less than $150 in most cases to get good photos yet there are terrible agents taking 13 awful cell phone photos out of sequence with a scant listing description.

I don't know how or why sellers put up with this nonsense. Seems like a lot of people don't even review their house's listing once it goes live.

And to second what @Paul De Luca said, selling a rental property with no information that an investor will find useful is a waste of everyone's time as most agents cannot be bothered to answer the phone about their crappy listing.