All Forum Posts by: Chase Gochnauer

"And if you use a Realtor to sell your home, don't you dare call your home an investment or an asset."

I don't understand this point. I use Realtors to sell my investment properties, does that not make them an investment or an asset?

"If the goal is to be super frugal - when you buy, purchase something below your means where the mortgage debt is 15-20% of your monthly income. Get a 15 year loan and double your mortgage payments to leap frog the amortization schedule, getting the bulk of the payment to go toward principal and not interest."

I do not understand the philosophy of this. I have no reason to accelerate the payments on my 3.625% mortgage on my home. That money is so extremely cheap, that paying it off quicker is a horrid return on my money.

"If your goal is to use real estate as an investment vehicle, purchase apartment buildings or single family homes and rent them out. Hold them long enough to realize half decent appreciation. Appreciation averages out better in the long term than what it is on an annual basis, so hold for two or three decades, not two to five years. "

The same could be set for a primary residence. Hold for 2 or 3 decades and sell and you come out money ahead.

Typically a homeowner can get into a house with very little down payment, say 3%. While a personal residence is not an investment in the traditional sense of the word, the money out of pocket to purchase is relatively so little, that it's not even worthy of calculating an ROI on. If I'm looking at renting a $200k house, or purchasing a $200k house, then assuming I plan on staying there longer than a few years, purchasing will lose me the least amount of money. If this were not the case, nobody would make money on rental properties.

But again, it's mainly a lifestyle choice. Otherwise, we'd all live in $30k houses in class D areas driving $1000 hoopties.

I buy so I can do whatever I want to to my own property. Numbers are important, even moreso when starting out, but life is also about enjoying what you have, and not being able to even change a paint color in a place I live is not for me.

Perhaps these reports are just not activated then for the owner as those are not visible to me. I'll chat with PM.

Knowing that rental rate, $25-$50 is definitely too low. I'd go in that $200-$275 range without doubt. A $200 raise is 7.4% 2 years later, or about 3.7% a year in increase, that's not bad at all in a market that sounds like is increasing as much as yours is.

I'd consider doing what Cara said, tell them it's $300 increase if they sign one year but you'll be happy to limit it to a lesser amount if they sign 2 year.

Hello all,

My PM using Buildium for their management platform. All maintenance tickets go through there as well. Is anyone aware if it's possible to set it up so that the landlord can see the maintenance tickets?

Always raise something each year. Rent should have raised at year 2 as well, particularly in that type of market, but that ship has sailed. I would not have any hesitation about raising. You've not mentioned the monthly rent on this place to get a feel of how much of a % raise this is. If you're renting it for $1000/mo then yeah, $350 is a big bite. If you're renting it for $2500, then I would not hesitate to raise it a higher amount. 

I always raise every year, even if only $10-15 on my $750/mo rentals. Taxes are always going up, insurance, interest rates, etc. If you aren't raising something each year, fast forward a few years and you'll be in a tough spot where you do risk losing a tenant.

Focus on getting your "house in order" first. Investing will be futile if you have penalties and such continuing to build. Penalties can be so great that you might get just as good of a "ROI" in paying off any tax debts and such to get you back to square one.

It's not impossible, I was in a similar situation 10 years ago when the market crashed. Being forced to pay cash for everything is helpful to build the right budgeting habits to always keep you earning more than you spend. Now I do well and my credit is 750-800.

You will never get a loan no matter your income if you have no tax returns to provide. I'd find a CPA, get your taxes in order, spend a year or two getting yourself back to square 1, then focus on investing. 

There's no magic bullet on finding a good CPA, just get a few on the phone, schedule some consultations, explain the situation and find out their costs. Your situation may seem complicated to you, but to them it will not be.

Find a scratch and dent place near you. That's what I do. New with warranty but maybe a small imperfection.

YiBing, first I'd find a smaller local bank (statewide at most) and begin to build a relationship. With them you'll have two options I'd pursue: - Work with the local lender to get you a 30 year fixed loan like Fannie that will be re sold to another bank. I'd still try to work with your local bank to get this loan to build the relationship - This bank will have the ability to do the loan themselves and keep it in house, approved by a local board at the bank. The downside here is that they likely won't do 30 year amortization and the loan will only be fixed for 5 years or so. I have really liked having a couple of relationships with local banks. Once they have your financials on file and feel comfortable with your model, financing is much simpler to get and they often can have ideas for financing you might not have thought of.

I just got quoted 4.6 and 4.85 on 5 year fixed 20 year amortization with 0.5% origination. 4.75 is about right.