All Forum Posts by: Dave Vermullen

Hey Jeff - 

Have you considered house hacking? That's how my wife and I got started. We bought a duplex for a great price (got lucky and happened to find an owner who was highly motivated) using an FHA loan - 3% down payment. We lived in one side, while collecting rent on the other. The rent when we moved in covered about 3/4 of our mortgage.

We spent about 6 months living in and fixing up the side we lived in, and then were terrified when the tenants next door told us they were moving out (this was our first rental, AND I don't know that the term "house-hacking" even existed - Ha!).  So we - actually, it was my brilliant wife's idea - decided to rent out OUR side (since we put all of the time and energy into making it really nice) and move into the other side.  

Because of our work, we were able to get WAY more in rent (120% of the mortgage payment).  We then started on improving side 2 of the duplex.  

About a year later, we rented that out, and currently use that rent money to live in our primary res. "rent free!"  

We continue to expand our portfolio, but I would DEFINITELY recommend house-hacking to get started.

Hey All - 

Been listening to BP podcast for about 12 months now.  I love the great ideas, guests, discussions, and insights offered.  

My wife and I recently purchased our fourth income property, and used seller financing to acquire it - our first CREATIVE FINANCING DEAL!!  The numbers on the house are great (purchased for $79k, appraised at $102k, and rents for $1,350).  We have a two year term on the land contract, and have already begun seeking ways to refinance the property, just as soon as the 1-year seasoning period is up.  

The problem we are running in to is our DTI ratio. We both have full-time jobs, exceptional credit, and long employment history. However, the existing four mortgages we have (three rentals and a primary) make our DTI too high to obtain a conventional refinance on the house. So, we started looking in to commercial lenders.

We were hoping to access some of the equity in our existing homes to help us with the refinance process on the seller-financed property, or even to cash out the balance entirely.  One thing we'd really like to do (not sure if this is possible) is to roll all of our properties in to one large commercial loan, and cash out all of the equity at once.  However, we haven't been able to find anyone to do that for us.  

Another roadblock we're hitting is the problem of equity.  Because we've been diligent in seeking out and purchasing only exceptional deals, we have about $130k in equity in our three rental properties (based either on appraisal or market analysis).  We owe a total of $250k on three properties.  This does not include the equity in the most recent seller-financed deal.  All of this seems like great news, and it is, I suppose....  HOWEVER...

The thing I'm hearing from commercial lenders is frustrating.  They're telling me that the appraised values of the homes mean nothing to commercial lenders.  They only care (and will loan on) the actual purchase price that we got the homes for, even though each of these homes has an appraisal that is less than a year old, and indicates that the properties are worth far more than we paid for them (due to market improvements and a lot of sweat equity)!  

So, I'm wondering who can point me in the right direction on how to access and leverage some of the equity that we have worked hard to build up in our properties so that we can continue to grow our business, and - in the near term - be able to refinance the seller-financed deal on time.

Thanks in advance for the guidance!

Dave

Yep. Apparently, even though it is my property, the sellers have the right to "peaceful enjoyment of the property.  The occupant may lock out the new owner... or just make it very difficult to access the home." 

This according to my local Property Owners Association.

Hey All - First time post here.  

Just closed on our second investment property, and am having a little problem.  

I sent an email to the sellers of the house that we just bought (we gave them 30 days after close to take possession - a mistake, I now know), asking them to set aside a few hours either Saturday or Sunday so that we can show the property to potential tenants.

He basically said it isn't going to work to have people in the house, and asked that we wait until October 16, the last day of our 30-day agreement. We don't want to wait that long, but I wasn't sure what our rights are.  

Unfortunately, we did not include anything that specifically reserved times or dates for showings.  The purchase agreement has been signed, so there's nothing we can do about that.  We'll obviously include that clause in future agreements (or just not agree to 30-days-after-close deals anymore!).

Obviously I'll try to work it out in a cordial manner, but if push comes to shove, I'd like to know what we can and cannot legally do.

Thanks for any help or guidance, All!

Dave