All Forum Posts by: Doug Shapiro

If changing the piping is cost prohibitive, then filters are an option. Just make sure whichever filter you get works well and is specifically designed to remove lead.    

Hi Tamara,

Apparently you can purchase under your own name, and then after closing do a deed transfer to an LLC. It doesn't impact the mortgage so the lender shouldn't care (not something they need to know about).

Hi Adam,

I would get a quote to see how much it would cost to replace those lead pipes.  From what I recall, NYC still has a decent # of lead pipes and are phasing them out when it makes sense.  Lead will leak into the pipes, so flushing out the water from the faucet before using it should minimize the risk to lead exposure.   

Having said that, if I were you I would probably just replace those pipes and eat the cost (or ask seller for a credit at closing).  It would be terrible if someone ended up getting lead poisoning.   

Hi Marci,

I am inclined to say this cost is 100% your responsibility unfortunately.  Maybe your insurance covers this?  Regardless, getting it repaired needs to happen ASAP.  Mold is a huge liability for landlords.  On top of this you definitely don't want to be responsible for paying for your tenants to live in a hotel for a few weeks while the roof and walls are replaced.  Only way to touch any of their security deposit would be to have hard proof that they were negligent, which is difficult to prove.   

Hello.  My advice is to buy a primary residence first.  Your interest rate will be lower and you can probably do a much smaller down payment % than compared with buying a rental.  You will immediately begin to pay down your principal balance instead of just throwing rent money out the window to pay for someone else's mortgage.

The great thing about buying a primary residence is that you can also rent it out after a year (or whatever your lender requirements are), and buy a new primary residence to live in.  Or, you can just buy a rental property and continue living there.  

Hi Cassandra,

Welcome!  There are always going to be new and shiny opportunities that come along.  

My advice to you is to pursue both at the same time.  Check out the other deal and put in an offer if you like it.  If this other opportunity is a home run, then consider backing out of your current deal.  Gather as much information about this new property as you can without jeopardizing your current deal.  You may discover that the new property is not as good as you initially thought after some due diligence, and then you will be happy about the deal you currently have. 

Thanks!

My advice is to hold the property.  Selling a property in the first 7ish years with a mortgage is not great because the strong majority of your mortgage payments are interest and the principal balance doesn't go down much.  If you are breaking even, then holding is best because you will just build equity in the home year after year.  

Also, as you know, selling is costly with the closing costs and the costs for your agent and the buyer's agent. 

Hi Katrina,

Cals look decent.  Closing costs seem really low - double check those.  Also may want to factor in cost to rent place (if you are using a real estate agent). 

How is the condition of the property? If the roof is old, or heat/AC system is old, or property has any issues, then those are future expenses (big expenses) that could completely offset any cash flow you will get. 

Definitely worth the money to send a home inspector to the house.  

Thanks.

Is the not so desirable area safe?  Would you and your wife be okay living there for a few years?  And would you have any issues selling in the future if potential buyers will also think it is a "D" area? 

Buying the single family home in a nice area is probably a safer bet.  Better yet is to buy a fixer upper single family home if any of those are available. 

Hi Matt!  I like your ambition.  

My advice to you: 

1) Focus your energy. Choose one company idea initially (real estate investment, property management, or construction).  

2) Have the support. It would also be best if either you, or your wife kept the W2 job while the other started the business.  Having the financial support will go a long ways (even with a nest egg built up). The W2 would help with medical insurance, or else it would be out of pocket which is expensive. 

3) Get a great grip on your finances if you have not done so already. Sign up for a site like mint.com to track your expenses and eliminate unnecessary spending. This will remove stress with the loss of income and help extend your nest egg runway. 

4) If you plan on buying more real estate, make sure you can either buy in cash or get a loan from a bank. If you both go 1099, banks will have a hard time approving you since they typically want to see 2 years tax returns as 1099 to count your income.  

On a side note - I used to be W2 working in IT with a very unfulfilling job. I made the switch as a real estate agent in NYC, and now have my own brokerage.  Couldn't have done it without my wife having her W2 job.  Maybe you can be successful with both you and your wife going 1099 at the same time, but you run a big risk.  If your business doesn't do as well as you want it to do in the first year, it may become very stressful psychologically and financially, and it will hurt your chances of success.