All Forum Posts by: Joel B.

So sorry, I forgot to put the second option in my reply. The second option is to refinance the mortgage and put it into your name. That process is basically selling the house from your grandmother to you. The challenge with that path is that you have to qualify for the new mortgage. If you can qualify for that mortgage, then the new mortgage will be in your name and the ownership of the home (deed) will transfer to your name. This is the "cleanest" way to do it since it changes the owner of the debt and asset from your gma to you.

So there you go. Two options for doing what you are wanting to do. Holler if you have any questions about is.

Joel

Henry,

This is a great story. Thank you so much for the details. I'm looking forward to hearing how this turns out. If it were me, I would lean towards letting it be a criminal matter first and then making it a civil matter if you don't get the outcome you were hoping for.

I would encourage you to resist going over the details with them. Just say that a gun was discharged from their space and that they are responsible for the damages. Don't try to fight about shotgun or this or that, just the important facts. I would actually not talk to them at all at this point unless you absolutely have to.

Looking forward to hearing what happens. Please post updates in this thread!

Blessings,
Joel

Howdy,

I thought I would post an update to this to let ya'll know what happened. I ended up purchasing a bigger house (4 bedrooms AND an office) that cost a little more ($467k) but was still a deal for the area. I have 4 bedrooms, 2.5 bathrooms, an office downstairs, and a 3-car garage. I mostly work from home now, so I'm home all day. I get to drop off and pick up one of my daughters from school every day and the other daughter stays home to do homeschool (she mostly schools herself). My girls are 12 and 13 and are very self-sufficient.

Six months ago I decided to Airbnb one of my extra rooms and it has been a WONDERFUL experience. I love hosting in my house and I love being able to work this business with my daughters. I get to teach them how to run this business and we generate enough income that I don't need to work a second job anymore.

I use the third bay in my garage for my wood shop. I have been building a lot of built-in cabinets for my house so that I have storage for stuff and I also don't have to purchase individual pieces of furniture. When I go to sell my house in the future, it will sell faster and for more money with all my built-ins. I will also have a lot less furniture to move since it will be built-in.

My house went up in value over $100k in the first year and is still going up. This area is going crazy with house prices. I already refinanced my initial FHA mortgage so I could dump the PMI. I'm now getting a HELOC so I can use the equity to buy my first short-term rental (STR) in Orlando. I used to live in Florida and will move back there (Orlando) when my daughters graduate from high school in six years.

Life is good and I'm so happy I bought a bigger house and started Airbnb.

Thank you all that posted with your thoughts and suggestions. I really appreciate all the feedback and comments.

Hi Mark,

I'll start by clarifying an important point. There are two pieces in play here, the asset and the liability. The asset is the house and the liability is the mortgage. The two are completely separate.

The deed (or whatever instrument your state/municipality uses) describes the asset (house) and who owns the asset. At this time, it probably says that your grandmother owns the house, but it would be good to double check to be sure. If the house was ever sold, the deed would be updated to reflect the new owner.

The mortgage describes the liability, who owes the money, the terms (interest rate, payment amount, etc.), and what asset (house) there is a lien on to secure the mortgage. The mortgage is the debt instrument and is completely separate from the deed/house/asset.

Now, with all that clarified, let me explain the situaion. First, you asked how to "take over" your grandmother's mortgage (the liability side). The direct answer to your question is that you cannot "take over" your grandmother's mortgage (the way it sometimes happened decades ago). The mortgage is a contract between the mortgage company and your grandmother, and the mortgage company doesn't want to change it. You CAN, however, just take over paying the mortgage and no one will know the difference. The mortgage company just wants to keep getting paid. If you continue doing that, they will be happy. They don't care where the money is coming from, just that they are getting paid. That leaves everything in place and keeps things as simple as possible.

If you go down that path, you may want to consider updating the deed (asset) to reflect you as the new owner. You DO NOT have to do this, but some people choose to do so because they don't want to pay for something that they don't own. If you didn't change the deed, you could end up paying a mortgage for 5-10 years and then find out at your grandmother's death that she gave the house to someone else in a will. You don't know how common this is and I HIGHLY ENCOURAGE you have a short 1-2 hour discussion with a real estate and/or estate lawyer to cover yourself.

If you do decide to update the deed, you run the risk of triggering the "due on sale" clause in the mortgage. Every mortgage has a clause in it that states that if the property is sold (deed changed to reflect a new owner) the mortgage is due in full. It is highly unlikely (and very uncommon) that that would actually happen (the mortgage company calling the loan) since the mortgage company is usually content when they continue getting payment, but you run the risk of that happening.

I hope that helps clarify the situation for you. If you want to chat more about this, message me directly and I'll pass you my number. Happy to help!

To directly answer your question, no, it is not wrong to make that purchase.

Hi William,

No, there is not. There are a lot of websites that offer services for rental property investors that will track some of that information, but I've not tried any of them. I stick with Quickbooks because that is what I'm familiar with, but you might want to give a few of them a try. Here's the ones I can think of off the top of my head...

• Cozy.co
• Appfolio.com
• Buildium.com
• Propertyware.com
• Yardi.com

Do some searches on here and you'll find other suggestions.

Hope this helps.

Blessings,

Hi Robert,

Yes, absolutely. In one simple word: Control. If you control both sides, you can pick the tenants that go in and the tenants that come out. That means that if you put a great tenant in one side, and the other side gets a bad tenant, you might risk losing your good tenant because of someone else's poor decisions.

If you control both sides, and one tenant starts to turn bad, you can evict them so that you don't lose both tenants and you can limit any risk to your property and tenants. This is the single biggest reason to own both sides of a double unit.

The risk you take on is that you no longer share the expense of the normal "shared expenses" such as a new roof, driveway, etc. I think the risks are outweighed by the rewards though. Controlling the whole property is totally worth it, especially if you can get positive cash flow.

Blessings,

Hi there,

Try looking on Craigslist and Facebook Marketplace for properties that are "For Sale by Owner." Since those properties don't hit the MLS, there are fewer people looking at them. Loop.net is good for commercial properties, and sometimes, small multifamily gets listed there. You may also want to post an ad on Craigslist describing the type of property you are looking for. If people know that there isn't an agent involved, they might jump on that opportunity since it nets them more out of pocket in the end. If you go down that path, spend some money to have an agent or lawyer review the paperwork to make sure everything is in line.

Another option to consider is to drive through the neighborhoods you want to live in and scout out properties you would be interested in. Send a letter to those addresses and ask if they would be interested in selling. That's also a great way to find distressed properties to get a deal on. You'll just need to be prepared to do some work after the purchase.

If you look for houses with more bedrooms, say a 4 or 5 bedroom house, you can rent out the additional rooms and make some money that way. Larger square footage may also be dividable in a way to create multiple living spaces. Just be careful here as you need to comply with neighborhood CC&Rs as well as city codes.

Talk to multiple realtors to see if any of them have any "pocket listings" or know anyone who is considering selling, but hasn't made the decision to list. That means you have to be open to working with a realtor that might not be your preferred realtor.

My last suggestion is to talk to local wholesalers. They do a lot of work finding deals, so instead of doing that hard work yourself, let them find you something. Wholesale properties will need work, so be prepared for that. This is probable the best way at finding under market deals that you can add value to and put your own finishing touches on.

Welcome to Real Estate!

Blessings.

@Jonathan Bell

You're welcome.

Howdy,

Great question. Head to Youtube for two good videos to get you started. I'm including links below.

Calculating Numbers on a Rental Property [Using The Four Square Method!] - YouTube
How To Analyze A Rental Property (The Quick & Dirty Way) - YouTube

Wholesaling is the process of buying a property for a low price, adding a small fee to that, and then reselling it for that higher price. For example, let's say you find a run-down house that you can buy for $50k. After it's fixed (called the After Repair Value or ARV), it would sell for $100k. You know it needs about $20k-$30k worth of work, so the all in price to get it turned around would be $70k to $80k. If you don't want to do the work yourself and make a quick buck, you buy the property for $50k, and then sell it to someone who will do the fixup work for, say $55k. You never actually own the property or do any work, but you make $5k on the deal because you found it and sold it to someone who wanted to do the work.

Brandon's videos give you the details on a long-term rental.

Hope this helps. Blessings!