All Forum Posts by: Jim D.

DIdn't end up doing this. Much better option is to file a private lien on the property, and then call a bank and do a rate/term refinance which doesn't require a 6 month seasoning period. 

For example, if I buy a duplex for $100k cash, spend $40k on remodel, I then go file a lien against the property for $140k (my private lender is the lien holder). Then I call a bank and refinance my existing $140k loan into a conventional loan. No seasoning required because you're just replacing one loan with the other, not doing a cash out. I've done it in as little as 2 months.

If you aren't able to find a good solution for refinancing a rehab, you always have the backup exit of just flipping it when you're done. Might not make much profit, but if you don't have any other option besides having high interest credit cards, it will at least get you out so you can move on to the next one.

I don’t think the premise is correct here. Lower-priced homes have appreciated at a higher rate in this cycle, but it is definitely not true that every house in SLC has gone up by around $100,000. I have single family in different price ranges in SLC, but the high end one I have in the avenues has gone from $515k to probably $800k in the last 7 years.

My hunch is to not worry about that metric as much and focus on cash flow, property condition, and ease of management.

Congrats on the success! You don't need to notify your lender of anything; your loan on the property should just stay the same. 

You should contact your property insurance provider; there are different policies that apply to properties that are owner-occupied vs rental properties (the insurance for a rental property will cost a little more).

I’ve house hacked 5 properties, and had great renters in the other unit every time. My wife feels safer when I’m gone having someone else In the building, and they make great pet-sitters when we’re out of town.

Grand Rapids is a great city to do it in. Should be able to have the other unit cover most or all of your mortgage depending on what you buy. 

Hi all,

I'm in need of a licensed electrician in the Salt Lake area. Have an odd problem with intermittent power at a rental, so hoping to hire someone with a lot of experience to diagnose and fix the problem. Any recommendations would be much appreciated. 

Thanks!

Good question. It's not as ideal, but I've seen it done successfully. The two main downsides are:

1. It can be hard to find a good deal using FHA. The house has to be livable and not have a long list of defects like chipping paint, missing handrails, etc. The closing process is long. Sellers will be hesitant to choose you as a buyer unless they don't have any other options.

2. One disadvantage of buying with a loan and then doing a refinance quickly that you have to pay many thousands in closing costs twice (origination fee, appraisal, PMI, etc.), whereas with cash your initial purchase has almost no closing costs.

I think it all depends on the tenant. I have had renters do great work on minor things for me, and for a very low cost and hassle. They did a great job because they live there and wanted it to look nice.

I think you approached it right by having them try a few small items and seeing how those went first. If they keep doing a good job, I would keep rolling with it!

Mark, a few questions:

1. How long have you owned the property? 
2. What are the other 2 units rented for?
3. How much would your unit rent for if you moved out of it?

Oh, it's just a rule of thumb I use to run a stress test of what my numbers would look like if rents dropped. While not impossible, it would be extremely rare for rents to drop by more than that amount and stay that low. 

Depends on how resilient your market is, too. Rents in the market I was in (Salt Lake City) went up during the last recession as there were more renters. In my current market (Grand Rapids), rents and vacancy were hit hard in the recession but have since skyrocketed.