All Forum Posts by: James W.

Not sure if you have done it yet, but you should see if it is legal to have more than 3 unrelated individuals in a house.  It is not legal in some areas.  

I would charge more for two people in a room as it is more wear on the home, more drama for the rest of the people living there and what would prevent someone moving a family into a room?  You will need to figure out if there are any issues in doing this, but can the house really support this if multiple people decided to shack up to save money on their rooms.

@Michael Wentzel I think it is a good idea to do it by the property to have a better idea on how they are performing.  Also, if you were going to sell one, it would be good to be able to provide financials for the property to a buyer.

@Jason L. I use Excel as well for mine.  I have a sheet for each property with each income/expense area that lines up with the tax form line items.  From there, I have a summary page that consolidates the previous pages.  I don't have too much extraordinary activity on my properties so I generally do most of my entries at year end for my taxes.  I don't waste the time with booking monthly entries unless it is something different that I could forget later in the year.  I book one entry for rental income, one for insurance, one for utilities...

If you send me a message with your contact info, I can email you a copy.  

I am not sure what your long term plans are, but this does not seem like a good long term buy and hold property.  Even if you are able to cash out on it, you really won't be making any money, especially when you factor in vacancy and repairs.

If you are set on this being an investment property and you are sure it is worth $210k, your best bet would be to unload it, take the cash and move on to something else that would be a better rental.

I am guessing the AITD may not be legal here.  I searched a bit online and looked at the state uniform conveyancing lists and did not see something that looked similar.  I am guessing I would need to look into some standard wrap forms but think I may wait on that until discussing with Robert as well.

@Caleb Heimsoth Everything I see about subject to suggests it isn't illegal, so I am guessing the lawsuit would somehow relate to the buyer/seller going after one another in the event of some sort of default of their contract or the note being called due.  I am not sure what resource the bank could have aside from calling the note due.  If it did happen, it would likely take time for them to get through the foreclosure process here too.

Thanks for the input @Jay Hinrichs.  I have been looking at wrap around mortgages online the last few weeks in my Sub to searches, but was wondering if there is a benefit of doing this.  

One of the things I don't necessarily like about it is that I would need to trust that the current owner makes his monthly payment unless the agreement would state I remit the payment to the financial institution.  I think it would be easier for me to just make it to the bank to ensure it is remitted.  

I'm assuming we would be dealing with the same insurance issues as well correct?  It did sound like the realtor thought the owner could just continue his insurance with me making the payment, but that would be concerning in case something did happen as i would not be the person listed as insured.

Another thing to consider in this is that the seller is 80 years old and I believe there is likely 18-19 years left on the current note terms.  If he doesn't make it to term, I will need to figure out how that might impact things as well.  I don't plan to get into a position where I wouldn't be able to get it financed, but if the note does somehow get called, I believe I will be able to refi with new terms.  

@Robert Gilstrap This is a unique property in a smaller town. If the building were to go up in flames, I would just take the cash and walk away. It wouldn't make sense to rebuild in that area and I really don't care to pay another $3,000/yr on insurance to carry insurance a lot higher than I would need to walk away and be whole. The nreig quote I got was half of the state farm quote and it is for more than the FMV of the property. Since it is in a smaller town, I don't foresee any major appreciation in this property over time with the exception of me adding an additional unit to get me a 40% COC return. Maybe I didn't fully understand the quote discussion with nreig, but I was supposed to get the quote emailed last week but I have not received the written quote yet.

I will be inspecting the property in detail this weekend.  If I decide to continue with the deal, I will get in touch early next week to get a quote from you and to see if you have any tips on structuring the deal to protect myself.

If it matters, I was initially planning on using nreig for insurance on it as it is half of what State Farm wants since they only insure on replacement as opposed to the actual value of the property.  I really only need it for a catastrophe anyways.  

It really isn't that hard to come across a 4 plex in Minneapolis, but many of the ones you will find listed for sale are likely not a deal that will provide much cash flow unless you put a large amount down.  Even if you did that, it would still be a poor return on your money.

I think most here prescribe more to the rich dad poor dad program than the millionaire next door mentality.  From what I recall, the millionaire next door essentially said to be a cheap *** and not spend money where as the rich dad poor dad book shows people the importance of using money to make money and understanding what your true assets and liabilities are.

The UAW PAW assumes everyone has the same goal of being rich when they are old.  Some people would rather have more experiences with their family and enjoy nicer things as opposed to having a lot of money to spend when they may be too old to spend it.  

I have a friend who is the extreme example of the millionaire next door and even decided to buy a cheaper rum recently!  I would personally rather find ways to expand my income than be risk averse, save everything I can, and be looked at as a cheap *** to ensure I am financially free only when I retire.  

@Robert Gilstrap I have heard of some people trying to hide the transaction from the bank and others being open with the bank about the process.  I can't imagine the bank would be willing to allow this to happen especially to a low rate loan so I was unsure why it is the case.  

Wouldn't the bank be tipped off when they see a new insurance policy coming in with me listed as the insured?