All Forum Posts by: Derek Diamond

Hey @Dimitri Paspalaris

Great question, I wish I had a good answer.  I would want to know what the price difference between the two policies are.  If they are close would the the $150K make more sense? When I had these same questions for my fourplex they were answered by my lender requiring, what I considered, a very very high insurance policy.

@Justin Wilson

The first deal can be scary, so for me I went the traditional route.  I went to a bank I trusted and got a regular mortgage.  I saved for my down payment and basic repairs (paint and carpet). Nothing crazy for my first one. 

@Adwaita Ray

Hey Adwaita. These are very common questions but hard to answer without knowing everything about your situation.  Talk with your partner about everything you can think of happening.  For example, what if one of you wants to move or start a family and need the money out of the deal right now. What if you two end up hating each other, how do you dived it up?  Answering these questions in the beginning will save you huge headaches later.  Once you have a handle on all the outcomes of this partnership go to an attorney and ask for their help.

@Heyward Lovett

Hey Heyward! Every state is different but there should be a due diligence period once you are under contract.  If it is a great deal, lock it up then see if there is anything wrong with it.  If there is, that is the time to renegotiate. Speak to a local realtor, but in my state there is a clause that can get you out of a contract if things come up in the inspection phase.  My thought is you will run out of money real fast if you always do your inspector step before you make an offer. Good luck!

@Alexander Reda

I have done more buy and hold and have never done a lease option but my thought would be if they don't end up buying the property, would you then have to get it ready for the next lease eating up the money you saved on the 5% for repairs.  You would also still need to collect monthly rent check and have someone check on the property (PM at 10%).  Maybe not but that is the fist thing that came to my mind.  You would however, get to keep their initial down payment so maybe that would make up for everything.

@Aniel Cruz

Hey Aniel! Both options can work. An accountant should be able to look at your specific situation and help you determine which option is best for you. Make sure to ask if you can get a second loan with money from your last loan. A mortgage rate should be less than a HELOC but you never know. Get an expert in your area to help and then go for it!

@Scot Levonaitis

Hey Scot, everything won't ever be correct. You will learn from your mistakes.  Just make sure to leave a healthy emergency fund and don't use your best case scenario numbers.

I have run into problems with the BRRR strategy because of my debt to income ratio. I would talk with a few banks/lenders and ask about their requirements before you jump in. They should, with relative accuracy, be able to give you their basic outlines before you buy the property.

@Joanna Laguerre

Hey Joanna!  Some basic thoughts here...

Do you know one better than the other? Home field advantage is very helpful.

Is one area putting more money into infrastructure? Is one adding jobs over the other? Is one better to landlords? Are the taxes lower?  etc..

Jump on the county and city websites and you should be able to answer some of these questions. Good Luck

@Brandon Bonfiglio FairPlay might be a good spot because it is fairly close to Breckenridge ski resort. But if you are forced to drive over the pass to get there and it can be tricky for people to get over.  Its beautiful for the fall, you get a ton of leaf-peepers out that way!

Hey @Matthew Bolton Steamboat can be a great place for Short Term Renal income.  You certainly have your pick of management companies in the valley.  Make sure to double check your numbers.

There is a new bill for all of Colorado that is being proposed that could change the tax rate from about 7% to 29%.

"Summary: SB-109 changes the definition of a residential improvement property tax classification from residential to commercial property when a building, or portion of a building, designed for use predominantly as a place of residency by a person, a family, or families, but that is leased or available to be leased for short-term stays during the property tax year. This would change the property taxes from 7.1% to 29% for those that rent out their property as an investment."