All Forum Posts by: Jack B.

My long time broker's fees were 20K per property or 80K. So I went to Aimloan, who originally quoted me 5K per property or 20K total for the four. Now I get the disclosures and they are 10K each, basically 40K or 8% of the 500K I'd be getting back. I'm really having second thoughts about this. That seems pretty steep.

I wanted to cash out refinance to a lower rate and use the proceeds to buy more rentals rather than using cash on hand, but now I'm thinking I'm better off just waiting to sell in a year, if the economy is in the toilet still, rates will still be low, and this way I'm not paying fees to cash out refinance AND sell a year or two apart. Too much money going out for this.....

I just didn't want to use cash on hand and tie it up in real estate, but now I'm thinking just wait to buy after selling some of these and doing another 1031 exchange instead.

With that I DO have the cost of selling and the cost of buying new and the nominal 1031 fee's, which would technically be more than the cash out refi, BUT...I wouldn't have to sell for years to come as the properties have new plumbing, siding and roofs (I bought them that way).

Thoughts? Go through with the cash out refinance?

Having second thoughts now, closing costs are now 10K per property, 40K total!

Applied yesterday, submitted paperwork today (most of it). Getting 500K out, getting a 3.625% rate on each, 75% LTV, and about 20K in closing costs for all four.

I plan on buying 4 more rentals with the proceeds. That brings me up to 9 loans (including my primary residence) with 1 left for a great new primary residence/dream home when that day comes. 

It's bitter sweet, seeing my mortgage payment going up a bit. I could bring it down buy just refinancing the 4.75% rates I have from years ago down to 3.625, thus increasing my cash flow, but I'm pulling down 300K a year W2 income and I want to 1) build my empire for the FUTURE, not the now and 2) not use existing cash on hand but instead cash from other properties so that I have some money that is not subject to the tax laws of investment properties upon sale. 

I do the EXACT same thing, top and bottom of listing has the requirements/dis-qualifiers. I also send it out in email when people contact me, as 99% of these winners need EXTRA hand holding. You'd be amazed how much this screens people out. I still get the "do you accept section 8" winners, almost all of them are emailing me from an iPhone based on the signature in their email. A couple people inevitably still show up despite me saying "I'm not section 8 approved" and try to convince me and their 8 pitbulls they are great tenants...

Right now I have to drive out occasionally for inspection if a  neighbor complains, or there is a maintenance issue, etc. It's super rare. With an occupied unit I can usually just have the tenant handle letting a contractor in to do work. Of course when there is turnover I either need a PM or I need to travel there and post up at the house until I find a tenant. So the cost to me would be a flight and rental car, as I would just camp out at the house. 

I'm planning on eventually relocating including my rentals in a few years, but as some of my rentals are seasoning equity wise and coming up for capex/repairs, I want to sell and repurchase some out of state before I relocate. But I worry what that would look like as a DIY landlord. I don't like the idea of using a PM due to the cost for very little actual work.

So what is the feasibility of me managing remotely for 1-2 years? What are the issues other than those mentioned?

Renters Warehouse does flat fee $125 a month apparently: 

https://renterswarehouse.com/pm/seattle-property-management?utm_source=google&utm_medium=cpc&utm_term=%2Brental%20%2Bproperty%20management&utm_campaign=Property%20Management%20-%20Seattle&utm_content=Property%20Management&mkwid=s&matchtype=b&device=c&creative=450901469409&network=g&devicemodel=&placement=&adposition=&physicallocation=9033252&campaignid=9897771837&adgroupid=100114394363&adtype=&channel=&st-t=google&vt-k=%2Brental%20%2Bproperty%20management&vt-mt=b&vt-n=g&vt-d=c&vt-c=450901469409&sfpc=9897771837&sfpa=450901469409&gclid=CjwKCAjwps75BRAcEiwAEiACMb04L-9vDQIoenoGs0qVFTJNdIQVXL9KwSQxhGqMlqfHBidKDKGsfBoC3AEQAvD_BwE

There there is the option of hiring a PM just to fill the unit ($$$$) then I take over the management remote, which would largely just be getting contractors to go do work for repairs as needed and the tenant can let them in. Once a year I take a vacation there to check on things (hence why I want to buy in Vegas and Tampa...This is basically what they talk about in THIS article on BP: 

https://www.biggerpockets.com/member-blogs/11360/88478-how-to-easily-manage-rental-properties-from-out-of-state

I'm not trying to bash Minnesota. Except for the high taxes, defund the police, hostility towards landlords, violence, cities that are out of control and it gets a might cold, it's a fine state I'm sure.  Guess you don't see much news.

 Which city council there was it that 3 people decided to abolish the police, but not before they voted in 1.6 mil a year private armed guards for themselves and their families? Next you know they will ban guns. So no guns, no police, but you get to pay for THEIR protection. I seem to recall a revolution was started over far less...

Bump

At a previous house I had a MIL apartment that I rented out. It had it's own everything, including parking and entrance, kitchen, breaker, you name it.

Now I have a house on a lake with a completely separate MIL apartment down stairs. The rent from this MIL would pay my mortgage. The down side is that BECAUSE it's a lake house, the tenant will be more "visible" in that they will be out at the dock/boat house/lake from time to time, possibly when I want to be out there alone. Then again, I don't go out there that often, mostly when my gf comes which is once a month.

Is it worth the free living to share the lake house with a tenant in their own basement unit? Ultimately I could try it out and send them on their way if I don't like it. With the right tenant I had no issues at my previous house. With the wrong tenant it was hell....Of course at that house there was no yard so they stayed in their unit....

Same thing I told a guy who put a holding deposit in for 2 months then backed out at the last minute and wanted his deposit back. He thought it was unreasonable that I wouldn't return it...despite signing such an agreement that I would keep the deposit if he backed out...and I'm not sure what this entitled moron thought the purpose of the holding deposit would be if I just simply return the money if he backed out...then this idiot wanted to find me a new tenant, and I told him I screen tenants myself, since I'm the owner, and he has no right to place tenants and I'm not required to accept his idiotic plan. 

 Yes, they are.