All Forum Posts by: Daniel O.

Some may be, but as you are finding out, not all sellers are willing to go that route. By putting some skin in the game, you are increasing your chances of success.

@Creighton Bertrand you need to plug these and other numbers into the rental analysis tool available here on BP. What is your estimate for cash flow after all of your expenses? Are you factoring in vacancies? You should also build in 10% for a property manager. Even if you think you will manage it yourself, it is good to have room in the cash flow to have someone else take care of that if you have to move or decide that is not how you want to spend your time. If the numbers still work with all of this factored in, then it might just be the good deal you think it is. At some point you are just going to have to learn to trust your analysis and pull the trigger. Do your work, double check it, and make a decision. REI is a competitive sport: While you are stuck in analysis paralysis, someone else is buying the house.

Good Luck!

@Sing Ho welcome to BP and the exciting world of dealing with tenants!  Why did you make filling one of the units a requirement of the previous landlord? What incentive does he have to find you a good tenant? Or even a real tenant?  Lesson learned: begin eviction process immediately, and then very very carefully screen your next tenant. Nobody will care about tenant quality as much as you do!

As a new landlord, you need to be very clear on the messages you are sending to your tenants and the habits you are teaching them. Be clear, be firm, be fair. But also, don't let them get away with stuff unless you want it to be a permanent way they deal with you.  Explain to the family that is moving out that state law does not allow you to accept the security deposit as the last month's rent.  If you are local, stop by and introduce yourself.

But I agree, until you get this all figured out, you would be well served by getting a property management company to handle this stuff for you.

@James Africano I would touch base with your agent concerning what closing costs will likely be. They vary depending on the jurisdiction. But I would expect somewhere in the 5K range. You may be able to roll them into the loan....or you may not. Does the VA loan program require you to occupy the property you are purchasing? Better make sure!

@Jonathan Kramer any issues concerning the HELOC are between the seller and her bank. So long as you are paying her more for the house than she owes on the mortgage and the HELOC, everything should be cool. You give the money to the title company, and they pay off the existing mortgage and what is owed on the HELOC. You do not have to agree to keep the HELOC open, and in fact I doubt the bank would let you. What is left after the HELOC and mortgage are paid and the real estate agents take their commissions is what goes to the seller.

@Nick Zocher The fact that you have no skin in the game, and thus nothing to lose if you don't honor your side of a legally binding agreement, is what is raising flags for your seller. Then he looks at your purchase agreement, and it raises more flags. You have to put some skin in the game. No, it doesn't have to be 50K, but it has to be enough that the seller feels comfortable that you are not just going to tie up his property and then walk without any consequence to your wallet. 

If the shoe were on the other foot, would you sign a contract to sell your house to someone offering the kind of terms you are offering? I know I wouldn't.

Focus all of your energy on paying off that credit card debt ASAP. Interest rates on CC are horrid, and they will only get worse as rates rise. Instead of going to the movies or the bars, spend your time reading and listening to pod casts for free, and start running the numbers on places. By the time you are out of debt and have a bit set aside for a down payment, you will be in great shape to make great decisions. And in the meantime, the REI market will continue to evolve. My guess is that in a couple of years, you will have an easier time finding that killer deal on a 4 plex than you will now. Good Luck!

@James Africano Your numbers look good on the expense side, but they look wonky on the financing side. Where are you going to get a 30 year mortgage for 3.45% with no money down and no PMI? Also, check your closing cost numbers. $2500 is low by the time you pay taxes and appraisal and loan origination fees etc.

@Account Closed have you considered talking to a property management company? Have them take a look at the place and give you an assessment of whether it is viable as a rental. They may also have ideas for how to deal with the city. If you do a search here for property management Philadelphia, you should come up with some leads.

But it is entirely possible that it would take more $ to bring it up to code than it is worth. In that case your mother should just sell it. At her age, who needs headaches like that?

Good Luck!

If you mailed the letter and had no response, you should consider sending a certified letter. If something does happen with the property, you will have proof you notified the landlord of the issue with the tenant.

I do not believe it is prudent for you to go by the place and confront the tenant. The only think you know about the person is they are using your name illegally and have an interest in you not interfering with them doing so. Be safe.  

Go to the police station and file a complaint. That creates a record, and the police do not like to have a record that shows they didn't do anything.