All Forum Posts by: James H.

As long as it dries the clothes it's good enough. If a tenant called to complain about the dryer being harsh on their delicate knits, I'd laugh.

You can decline an applicant based on a gut feeling if you want. You can decline applicants for not completely filling out applications. There are so many ways to reject applicants that you need not worry about discrimination issues.

There is a book called Landlording on Autopilote, I believe was written by a retired police detective turned landlord, that goes in depth on the application issue and discusses all the different application denial techniques there are to get out from these types of situations. But for one, I would make a rule that no more than 4 people can live in the house. That can be your policy regardless of the city code and be based soley on what makes you feel comfortable and not have anything to do with discrimination.

With a 30 year you can always add extra in your flush times to reduce the time of repayment at your option.

Interesting feed back. In most of the respones I am hearing mainly just personal bias against car loans specfically. All the arguements about rich people and borrowing habbits can be directed at any kind of debt, regardless of how it is secured. Most investors would not blink at taking an usecured loan at 3% interest over a 5 year term to secure a good deal on a property. The only difference with the car loan is that it is secured by a depreciating asset. Rather than the whole world coming to an end if the car payment can't be made - the car goes back to the bank and you get a credit hit.

I specifically said to keep the argument for buying a clunker out of the argument. I spend alot of time in my car. As far as William Bannister's old Crown Vics, after accounting for the difference in gas mileage between those and my 2011 Altima, the additional monthy cost is only about 100 - all payments, expenses, maintenace, registration, etc, considered. It's worth 100/month to me even if it is not to you. As far as being frugal, why do you have two? It costs money to insur and register the second one every year doesn't it? So lets just not turn this into a bragging competition about how cheap we are. I wouldn't waste my money on a Corvette, so that just goes to show that we only have different personal preferences and spend money in different places. I like to use my nice things regularly and enjoy them - not polish and park/hide them.

And again, like I said anyways, lets delete the "I will just drive an old piece of crap" stuff from the equation. I spend too much time in my car to accept driving some old crapper around. I also don't buy clothes and dishware at Goodwill. I eat out lunch almost every day instead of eating a sandwich. But I rarely buy electronics and don't have cable TV.

So, Steve, you are against consumer credit. What if the loan was a secondary loan secured by the property but with the same terms as it would have been on the car note? I feel that would be worse because I would rather have the car at risk than the property.

Is there an investment reason for not wanting to use the car for collateral rather than the property, other than the car loan simply being classified as a consumer loan?

I recently posted some questions regarding financial strategy involving car loan debt, student loand debt, mortgage debt and cash for new acquisitions.

There is a strong contingency of folks that claim you should never borrow money for a car and that if you owe money on a car, you should pay it off. Because a car depreciates.

I actually don't think having a car loan is necessarily bad if you are financing it at below 4 percent. The argument of "it depreciates" doesn't change my opinion because it will still depreciate even if it's paid off. If you plan on keeping the car for 5 to 6 years, the costs for maintenance and depreciation will be the same no matter what.

Lets assume the car payment does not increase your DTI ratio above what will allow you to qualify for a mortgage. Now assume you have 15K. Let's assume that you also need a new car and also want to buy a house. Why not buy the car with a loan at 3% and use the rest of the money to pay for DP and closing costs on a house? In my mind, there is no difference in doing this and doing an 80/20 split on a mortgage (100% financing that so many investors regard as the holy grail). Except it is better because although the car will depreciate, it could be sold in a pinch if you had a couple thousand to cover the deficiency.

So, what I am saying is, in the right scenario, financing your vehicle, rather than paying cash, does not need to be considered any differently than any other form of raising borrowed money. Thoughts on this?

For the sake of a comparative discussion, lets discard the argument that you buy a 2000 beater as an alternative.

But my biggest concern would be, how big was the place they are moving from and why are they moving. This would/could go a long way in helping me assess the situation. Also, how old/big are the kids? Does she get child support? Are there an even number of boys and/or girls so that they can be seperated two per room without mixing boys and girls?

Also, do they plan on having pets? If so, that would put it over the edge for me and I could not accept that. Do you have an opportunity to drop in with a surprise visit to her existing place? Maybe you could bring a form by? Do you have any other applicants? How good are your prospects for getting a better applicant?

"Let Stone throw you a bone!"

How would someone know to that you are buying houses with this pitch?

Anyway, "We buy houses" is about as clear as it gets. I don't think it is the same as marketing a pair of sneakers or a soda. I think it boils down to sign placement with the clear message over all else.

I have noticed a decline in their presence in my part of town and wonder if the city is cracking down.

I don't know that I would decline an application due to filing bankruptcy. They should, in theory, have a clean slate to work with - financially speaking. Depending on the type of BK they file, chapter 7 rather than 13, I believe, should free then of any encumbrances and enable them to pay rent. My current tenants came to rent my place directly after walking away from their house. They have been model tenants so far. I don't see much difference between walking away from a house and filing BK.

Thanks Robert Adams,

Good points. This is not a short sale. This is a FSBO and the seller's brother is a RE attorney. I have a hard time believing a RE attorney to be clueless about typical earnest money amounts...Anyway, I attribute it to him attempting to overbuild the contract the same way I, as a foundations engineer, would overbuild my personal foundation if building a house.

I countered with a lower earnest money (1300) and some other things. The seller apparently agrees to the terms without any heartburn and I am awaiting a revised contract for review either tomorrow or next day.