All Forum Posts by: Dennis Cosgrave

I have always been a night owl. When I was in college, I scheduled all my classes, or at least as many as I could, after 11 am. I do my best work late at night when everything is quiet and I have no distractions. After college, I got a job and I had to be there at 9 am. I always found that a chore. I later got a job with flex hours so I would start at 11 am and work through to 7 pm or later depending on what needed to be done. This was great because I could avoid rush hour traffic and I could use my time more productively. 

I think there is no hard and fast rule. Different strokes for different folks, as they say. Do what works best for you and your own bio clock. 

The most interesting thing that I learned along the way was that real estate is a cyclical market, just like all other markets. Not only is it cyclical but it is an integral part of the the overall financial markets. Many people will say that all real estate is local but that is simply not true. Just look at the financial crisis of 2008. It affected markets not only all over the USA, but other countries as well. I saw the market crash coming in 2008 but I had no idea how bad the domino effects would be from the collapse of the sub prime lending market. Since then, I keep a close on what is happening world wide in the financial market, particularly those elements that will affect real estate pricing and financing costs. 

I am not familiar with HAP loans. If rent increases are restricted, can you refinance with a conventional mortgage? Are there penalties for refinancing? Curious to understand how HAP loans function. 

I am a little late to the party. I live in Zaandam which is 15 minutes by train from Amsterdam. I lived in the USA for 20 years. I have been watching the real estate market here and have made some interesting observations. I certainly would like to hear about everyone’s experience and perspectives. The biggest difference here is the tax treatment of rental income and capital gains and depreciation. Another big difference is mortgage liability. 

Regardless of which path you choose, you are looking at refinancing costs of 1.5% of the total amount being refinanced. The difference between your current rate and market rate is not that great. Since you have only owned the properties for 3 years you have not built up much equity. Unless property values have increased significantly in your market in the past 3 years, there is little to gain through a refinancing. 

I had a similar situation happen to me. The seller had signed a standard agreement. I contacted my attorney and he said the deal would proceed as agreed upon. If the seller refused to close, we would sue for breach of contract. I was planning on moving into one of the units so my attorney further advised me that if the seller refused to close that I was to put all my belongings in storage and check into a hotel, the costs of which would be paid by the seller. In the end it was a bluff and seller closed on the deal. 

The simple explanation is that normal wear and tear happens over a long period of time. Damage occurs suddenly. It would be wise to take time stamped pictures immediately before a new tenant moves in. Take the pictures with you for the move out inspections so you have legitimate comparisons. Some landlords include a clause in the lease agreement that states that a certain amount will be deducted from the security deposit as a cleaning fee. That helps to offset the cost of repairs for minor damage that the tenant may have caused. 

It depends on what state you are in. You are usually required to issue a statement of damages and if the damage is less than the security deposit, return the balance of the security deposit with the statement to the last known address. Send it registered mail and keep a copy of the statement and the check for your records. Each state has a specified period of time that this must be done. Failure to do so can result in the forfeiture of any claim to the security deposit. Check with your attorney to see what the law is in your state. 

That idea sounds a little risky. It would appear that the market is beginning to soften so putting yourself into a situation where you are already losing $350-$500 per month leaves you zero cushion on the downside. The key to successful real estate investing is not to leverage to the extreme. All markets are cyclical so you need to be prepared for the time that market prices decline. In your situation, you might want to diversify your risk by using a HELOC to buy property in another state; a state where Californians seem to be flocking to. Never put all your eggs in one basket.

The man has a fundamental conflict of interest. He wants to sell you a property to earn a commission so he doesn’t really care what you buy as long as you buy. It might even be in his own personal interest as a property manager to sell you a property that requires a lot of maintenance and management. Some might argue the reverse, i.e., that in order to garner more business with you in the future he would do a good job on both ends. I think the risks are too great. Better to keep the two functions separate and arms length.