All Forum Posts by: Jeff Ronningen

@Jim Watkins 1) don’t advertise in a public forum that you don’t declare your income 2) go legit, start declaring 3) run your credit report and talk to lenders, you don’t know until you try

@Jason DiClemente you nailed it

@Mark Nickoson. If the strategy is buy and hold then fluctuations in RE values are less impactful. If you have commercial ARM loans you need to consider interest rate risk when the payment resets. Locking in for as long as possible mitigates that risk. In general rents don’t fluctuate as much as RE values. If your property is well maintained and in a decent area rents and vacancy shouldn’t be impacted drastically in a downturn. So a lot of the risk is addressed when you determine your strategy and purchase.

@Andrew Brewer You can try but the seller is under no obligation contractually. Not only that but they just made the investment in moving that stuff. Lesson learned my friend.

@Angela Jossy I’ve had decent success using Thumbtack for small jobs needed quickly.

@William Huston Monthly cash flow per door is a good rule of thumb but it’s not the end all. As pointed out by others there are other more important metrics such as COC return. One thing that stood out from your example is that when going from $225K offer to $235K your cash flow went from $408 to $280. That seems strange. If you put down 20% you only finance 8K more. At 5.5% for 15 years the payment would be $65.

@Evan Coburn It depends. I use a HELOC as a temporary source of funds for REI. The interest rate is variable, so for long term funding there’s interest rate risk versus a cash out refinance which could be a fixed rate. A HELOC may have provisions to call the loan or reduce the loan limit. For instance if the value of your home dropped significantly. With a fixed rate, fixed term cash out refinance you don’t have that risk.

@Cosette Trantow Compare the mortgage insurance costs and closing costs between FHA and VA loans. That may drIve the FHA vs VA decision. Putting down 4% is next to nothing, so for me that wouldn’t be a determining factor. You may be better investing that 4% after the purchase to create value add. If you finance 100% of sale price and do a 30 year loan, you won’t pay the principle down far enough to cover 6% realtor commission to sell for 3+ years. If value goes down it gets worse. Set aside savings and/or pay down principle with this knowledge in mind.

@Peace Lily I think FHA underwriters view that as moving backwards, as if you were moving from a sfr to a duplex. It strains credibility to say you would occupy therefore they won’t give you the benefit of the doubt that you’ll occupy as your primary residence. The way to house hack is four plea first, then triplex, then duplex. 9 units all purchased owner occupied which provides superior loan terms.

Potential lessons learned - 1) Always review the HUD-1 closing statement carefully to make sure that security deposits and rents are being prorated properly toward settlement costs 2) Ask seller at closing about the payment history of the tenants and inquire if payments are current prior to signing closing documents (I need to remember this one)