All Forum Posts by: Chris Noles

@Shiloh Lundahl that makes sense. Thanks again, and I hope it goes well for you!

@Shiloh Lundahl thanks for the advice! Are you or anyone you know interested in partnering on such an investment?

I am also aware of the fact that a $200,000 real estate investment, or perhaps a smaller business investment, helps qualify for permanent resident status in Costa Rica.

Hi,

My wife and I run a successful IT Service Company, but we are interested in buying our first rental property or a second cashflow business.  We know there are thousands of ways to do that here in the USA, but we are trying to see if there is some way we can help my wife's siblings while investing at the same time.  My wife is from Venezuela, and thankfully she is a U.S. Citizen.  Unfortunately, her siblings had to flee Venezuela 3 years ago, and after trying to survive in 3 different countries we made the decision to move them to Costa Rica and help support them there.  We made that decision because we are familiar with Costa Rica because of our involvement with some church mission trips we have helped with down there for many years.

Her siblings have refugee status visas in Costa Rica, but they are still limited on what they can do for work.  Since they are not permanent residents, nobody wants to hire them, and they are finding out that people don't really hire for odd jobs like landscaping, running a store, etc. they will hire their own citizens first. This means they will probably have to stick to entrepreneurship and get creative.

Unfortunately, leaving Costa Rica is not an option for them anymore as other countries require a visa to get in.  They could possibly come to the USA in several more years, but we have left no stone unturned in trying to do things the right way.

While we are sending them about $500-$700 per month to help with their cost of living, I am a firm believer that there must be some way that we can help them start a business or get involved in real estate.  We have looked at several options, but part of the problem is that we cannot get leverage down there like we can here.  Everything has to be bought with cash or owner financing (rare). We have about $25K to $50K cash that we can invest, so we are open to a partnership opportunity if someone has some capital and wants to partner.  Here are some things that we have thought about that could be mutually beneficial to them, us and a potential partner:

* Hostel - We could partner with someone who can help with the purchase of a hostel.  They could stay in one of the rooms full time and run the facility to provide cleaning, hospitality services, etc.

* Multifamily/Apartment - Ditto

* Co-work office space - They could run the day to day operations, and we could provide them a small apartment to stay in

* SFH - We could help them get a place of their own so that they (well, WE) can stop paying another landlord rent and build equity

* STR - There are a lot of opportunities for vacation rentals, but again it comes down to cash

* Retail store - We could acquire a small business selling food, clothing, etc. 

It might be easier to use that money to invest in a STR here in the USA and just keep sending them money, but we are trying to see if we can find a way to put them to work or acquire an asset instead of them just getting money from us and us paying their landlord.

Thank you in advance if you have any interest in making some suggestions here.  If you have been interested in Costa Rica like we have, we should talk.  I have literally researched what can be done for 3 years now, and I have been hesitant to post but I decided to go ahead and ask.

Have a blessed day!

@Colleen F. Zoning is ok, and yes, I could add another meter. However, with all the costs we have for moving we may have to decide to only rent the top floor for a year or two before we can pay to finish the basement.

@Colleen F. MIL has already decided to move out no matter what.  The basement has 2 above ground/egress windows. There is enough space for 3 bedrooms and 1 or 2 baths with a small kitchenette/common area.  The $40k estimated finish would just require framing, drywall/build out for rooms and bathroom, flooring, sump pump and bathroom amenities. The electrical is ready. Yes, 1.5 to 2 times the rent or we think the whole basement would rent for $1100.00 or more plus utilities.

@Karen F. That is an interesting perspective when you look at it from that perspective - I would only be getting + or - $1400.00 per month for a $200,000 asset.  I do want to mention two things though: 1.) I won't likely get a much lower rate since this will be a rental and not my primary residence. I can't even refi at a lower rate right now.  2.) I could finish the entire basement for around $45K and rent each level of the house out as a separate apartment unit, but of course that means spending that extra money while we are still paying for rehab.  

@Sylvia B. MIL is moving out for sure so option 2 is off the table.  You are right - there may be other ways to make a bigger profit if we sell this place and get the equity, but it may also be more difficult to qualify for purchasing new properties and inventory may be very low plus I could finish the basement here. Thanks for sharing.  I will think hard about option 1 and option 3 after we move out of here at the end of this month.

Hi Kris!

Everyone has offered very helpful feedback here, and so far it does sound like option 3 is the most popular opinion.  To answer your question, my wife is Venezuelan (Yes, I am lucky!) and her mother immigrated here as a permanent resident. (the legal way).  MIL is 64 years old, she barely speaks English, she does not drive and she has never lived alone.  She has lived with us for the past 2 years, and we do think that it will do her some good to live by herself and work to pay rent, utilities, etc.  She is a very quiet lady, and she never causes any trouble.  Maybe it is because I don't speak great Spanish, ha!

Anyway, we just thought there could be a win-win situation if we became her landlord and she could stay in the same house she has been living in where she can walk to McDonald's to work, and we know she would take good care of the house, etc. Since this is probably not a good idea for many known and unknown reasons, we will nix the idea and she will likely rent a room from a friend for just $350.00 per month and we will either rent this house to another tenant or just sell it. Even if we were to only net $150/mo the tenant would be paying down our mortgage, but hopefully they will not be destroying all the upgrades in the process. ha!

Hopefully by explaining my situation the idea doesn't sound as crazy as it normally would.  Either way I win - *I* won't be living with her anymore in 3 weeks!

Hi Anna,

That is a very valid argument to consider option 3. If we could afford to finish the basement, we could easily have a downstairs tenant in a 3BR/1Bath apartment as well but we can only cashflow the top floor for now or sell to get the cash equity.  Thanks for your feedback.

This isn't a bad country song, but now that I have your attention I really do have a question. :)  I previously posted a question in the Deal Analysis forum asking for opinions about whether or not my current home will cashflow well.  My wife and I have found a new primary home, and we will be moving into it next month. My mother in law currently lives with us, but she will not be moving with us to our new home.  I love her to death, but trust me, this is a good thing!  She is still in good health, and she earns enough pay to pay about $400.00 per month in rent.  We are thinking if she is going to have to start paying someone rent, it might as well be us, right?  Well, that is of course if she has roommates who can pay us enough rent combined in order to help us cashflow properly.

The house is a 4 sided brick ranch home that was built in 1969. We just spend nearly $50K in rehab which included a new breaker box, remodeled both bathrooms, retiled kitchen floor, retiled screened in porch floor, replaced cast iron plumbing with PEX and put in a french drain.  unfortunately, we will be making payments on this personal loan for the next 7 years unless we pay it off early.  The home is on a full basement, but it is mostly unfinished.  No bedrooms, just 2 small offices (no closets or bathroom).  The living space upstairs is about 1700 sq. ft. with 3 bedrooms and 2 bathrooms with a 2 car garage.

The home could list for around $200K, and we owe $140K on the house. The interest rate is 4.25% so our monthly mortgage payment with tax and insurance is around $1,300.00 with 22 years remaining. 

The homeowners on both sides of our home have decided to rent their homes out, and the rents seem to be in the range of $1,400.00 to $1,550.00 per month in our area (Mableton, Georgia).

In the next 30 to 60 days, we will decide to do one of three things:

1.) payoff the mortgage and get the equity and mother-in-law will just go pay for a room for around $300.00/mo to another landlord.

2.) Mother in law will stay as a $400.00 per month tenant, but we will need 2 other tenants who can pay at least $500 to $550 per room to help us cashflow.

3.) Mother in law moves out to pay $300.00/mo to another landlord and another tenant will pay the full rent (hopefully around $1500.00/mo) 

We are new to investing, so if we go with option 1 we will not be landlords right away as we will have to invest somewhere else at another time.

Option 2 feels more like a multi-tenanted or house hack situation where we will have to collect from 3 different tenants.  If we go with this option, should we do a full service lease to include utilities (at least WIFI?) Of course we would not have separate meters to track how each tenant utilizes utilities so that could be challenging, but at least mother in law would be here to keep an eye on things and she will of course pay and be sure the home doesn't get trashed.

Option 3 may be easier to manage just one tenant and they could pay utilities, but we won't know what kind of tenants we may have.

In any case, I feel better about having a property management company help since my wife and I will be an hour a way and I don't want the calls at 3AM if something goes wrong in the house.  

We cannot refinance this house to lower our monthly payment since we are purchasing a new home, and this home will not be our primary. I have been told that since we already own this home, and the interest rate is not too bad for a rental property it might be a good way to easily work our first SFH deal and provide a place for mother in law to live.

What do you think?  It seems that home values are holding right now, but of course I am concerned about not selling for a good price right now while I can.  Long term (5 years or more) renting seems like the best option though.

Thanks for your feedback!