All Forum Posts by: James H.

Hi everyone, thank you for reading this.

Im trying to acquire quotes for homeowners insurance/rental insurance but it seems the only way to get an accurate quote is to engage the company and ask for it. Seems like common sense right? I have done this before and I have been getting bombarded with calls/emails asking me to go forward with my "new policy" and no matter what I say..these guys keep calling. What do you say when you call for a quote? Do I tell them I'm only inquiring and I'm not actually interested in purchasing today? And if so, how do I get them off my backs post call?

THANK YOU

Hey Jaysen, just want to thank you for the thoughtful and detailed analysis. That helps me out big time to get in your mind a little and see how you’re thinking about this. 

I did run the numbers both ways.

The numbers in that calc analysis that I posted was based on all units rented out and me living elsewhere. Barely $100 per door cash flow.   I’m at $2,880 for all three units rented. If I were living in one unit (assuming a $960 rent) I would end up paying nearly $400 into the morgtage from my job. However..If all three units were equivalent and rented for $960 each then I would make around $300 in cash flow.  Of course I would have to see the building and see what exactly is going on so I could dial these figures in. Actually there is a lot more dialing into be done.. Just as an FYI I base the rental estimate on having lived in that exact area for a long time, checking rental rates on Craigslist, I got in touch with a real estate investor named August in that area who owns over 350 buildings and he thought my estimate would be low enough to entice tenants. 
Rentometer thinks I’m low and estimates over $1,100 for two bedroom units around that zip code. I need to verify how many bedrooms per unit. 

Tenant pays Elec & Heat

As for your question about electricity.. I figured $75 was a high estimate for Electricity to power the outdoor lights, flood lights covers and any other steady burning lights that are necessary for safety.

As far as looking at other options for financing I have investigated the 203k and the 203k streamlined. The 203k seems like a great way to roll

Don't these HUD homes generally go to whoever has cash? Several agents tell me that banks who are selling these properties prefer to avoid potential buyers who need government loans to help them afford it. They emphasize that I have a "better chance" of getting it with cash. I understand that 100% Cash is King but that's a little discouraging.

I learned about USDA loans also. I'm having a terrible time right now developing an investment strategy. And this financing piece is a big part of it. I would really appreciate hearing how you have come to prefer avoiding the standard FHA that everyone seems to love so much.
I'm trying to save all I can do that I have the option of getting a conventional loan because that PMI is a pain. I will have $38k by spring. I know that's not very much but It takes an embarrassing amount of time earning even that much at $19 per hour.

Jaysen when you say 
 

• “Bump up repairs and CapEx to at least 15% combined. This place is 120 years old.”
• Do you mean like 8% for CAPEX + 7% Repairs? = 15%?
  
• You make a valuable point the house is very old. 
  
• 
  
  • ”I'm unclear about the trash expense. Did you confirm that? The town website says "Residents and businesses in the District pay a separate fee for this service," but doesn't give a price. They do list "bulk pickup" as costing $75.”
    
• $75 was based on general ranges suggested by other landlords in that area. It’s definitely not a perfect number but that’s interesting to know that the town does bulk waste removal for $75. I bet that’s a small dumpster on the property. Maybe
  

• ”What about heat and HW? The town property card lists the heat as "oil" and "forced air." That leads me to think that the entire building is on one heat and HW system. That could kill the whole deal. Confirm this ASAP.“

I have tried to confirm these kinds of questions before and agents seem very reluctant to call and ask the owners.  I could tour the property to verify for myself but why go all the way there if you can verify the presence of a deal killing problem? I will do that,  I assume you mean It’s a killer due to the cost of setting up another furnace, switching to natural gas, splitting up the system into two zones etc. 

 I would love to understand more about these details if deal analysis. In a market as competitive as CT taking three days to confirm these crucial details takes a while. For example the house in our example is under deposit as if today. I wish I could learn faster. 

• “Lawn care and snow removal, are you including those under "misc?" I think it's best to break out as many of the expenses as possible”

I wonder if I can add sub categories and rename them on the BP calculators because I also feel that “Misc” is too vague.

That was a combination fund for lawn care Grass cutting from April to September and snow removaL November to March. I didn’t budget enough in my lawn care estimation.  I based this on cutting grass twice per month at $40 per cut. I did not call around and get estimates but I know I need to.

”YourPMI looks really high. I have PMI on my primary, it's less than that each month and my loan amount was 3X+. It pays to shop around”

That was a number based on the average of several free online morgtage estimators. You know the type, choose your credit score...how much down payment.. That PMI was based on the average of three numbers. My interest rate was created the same way. I am getting to know an independent morgtage broker in Manchester CT and he is helping me learn about the money of the deal. I get overwhelmed at how Much I don’t know. I will shop around for sure!


I wasn’t able to get it together quickly enough to snag this property it’s under deposit as of now but I’m learning with every house I miss out on. That frustration drives me to learn more.

This was a long winded reply but I wanted to do some of your excellent questions/analysis justice and reply with the best answers I had. I really appreciate your taking the time to share what you know with me. 

James 

Okay wow I didn’t realize that, thank you for clearing that up. 

Hi Michael, yes that's correct about the listing price. I appreciate your feedback. Because I would go FHA however I can only rent out 2 of the units (both 2 bed) and I will live in the one bed apt. Here's the problem now I'm paying about $450 into the property of my own money per month. Would you do this for a year (for fha) then once moved out, enjoy the few hundred dollars of cash flow?
I don’t expect I would get it for that price I’m sure I would have to be closer to 155k

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