All Forum Posts by: Heath Jones

If your potential renter is self-employed, how do you verify income? They have offered me tax returns from the previous year, but how do you ensure they will make that much when they are renting from you? Any help would be greatly appreciated!! Thanks

How would I go about getting a loan to buy a storage locker facility and to pay for all the rehab. I feel like this is a loan to cost type of situation. So I know typically people get something like 80% LTV of the purchase price and 100% of the rehab money. Is this correct? And how does one make this work?

@Jason J. Man, that sounds tough. I hope everything gets resolved in a productive way. Good luck!

@Ricardo P. I’ve been saying this that April should be alright for rents, I’ve been more worried about May and June. My plan has been to keep back ALL cash flow from April in reserves in the event that tenants can’t or don’t pay rent in May or June. If they all pay in May, same thing... all the cash flow is going into reserves.

@Alexander Grullon “Don’t wait time buy real estate, buy real estate and wait” - Will Rogers

Buy a house first, I would go for a duplex like you said. Also, NEVER EVER buy a brand new car, always get a used one.

@Cari Childers I would look into a HELOC. The cool thing about HELOCS are is that once you pay it down, you have access to the money again. For instance, if you paid it down by 30k, you can access 30k for next purchase. With a loan, once you pay you no longer have access to the money, unless you refinance again. Just a thought.

@Jonathan Taylor My wife and I have a 16 unit apartment building that we have now owned for one year. Sales price $540,000, Down payment $120,000. It is currently on a Seller-financed note at 5.5% 30 am with a 5 year term, but with a clause for an additional 5 year extension if needed. Monthly mortgage is $2,384.71. I believe these are favorable terms.

My question: Given the drops in rates (although I heard small banks aren’t lending right now), would it be wise to refinance to a lower rate? Also, I believe over the past year we have forced appreciation and I believe the property is now worth more than we bought it for. So the refinance might also give us a chance to pull out some equity and put it in the reserves account. Should I stay or should go... refi?

Thank you for the post.

@Jay Hinrichs Out of 23 units I have received 22 rent payments and the last one always pays late so I feel very fortunate. Next month may be more challenging...

Roger that. One thing to keep in mind is that the cash flow is going to be lower for the year you live there, so don't let low cash flow year one keep from buying a good deal. I had another investor once tell me, the place that cash flow well are places you probably don't want to live and the places you would want to live are too expensive. While I don't necessarily agree with his view, I think he's hitting on the point that Matthew was talking about. The C class properties are more affordable, but it can be challenging to fill them with residents who reliably pay rent (i.e., higher risk of getting that income). Just know there is a good balance between the two, and if you can't find a good deal, work to create one! You are on the right track with thinking multifamily, it really is the best way to go in my humble opinion. Good Luck!

I don't know the area so I can't help out on that front, but are you planning to live in the property you buy?