All Forum Posts by: Trey Brown

@Gary Ahu

Have you found a lender that will finance a property at that price?

It's fairly difficult (but not impossible) but to find a lender who will offer a mortgage below $50k. So if you're using 75% LTV, you may have a hard time finding a bank that will do anything below $65-68k.

No matter what though, you should make sure you’re going to be able to finance the property before you purchase with cash. If not, you’re tying up almost $50k that you can’t get back until you sell or wait years for your rent to eventually pay you back.

Good luck!

@William Doom

Shoot me a pm if you’re still looking

@Ted Kawabata

Does your lease say that the tenants are responsible for pest control? 

Also, if you can't see them during the day, check in the dishwasher and around the the water heater with a flashlight. 

That being said, as a tenant, if I have a GREAT looking unit, and you couldn't prove that there was a roach problem during the final walk through, and later came back and deducted pest control from my deposit, I'd demand you refund it. Depending on how you read the law, there's an argument that the landlord is actually responsible for pest control.

- “Landlord is required to supply at all times during tenancy…a unit in a clean and safe condition and the premises in a habitable condition…"

- "Uninhabitable - ...Defects or conditions ... unhealthy such as cockroaches or mold..."

Not saying that I wouldn't have my tenant also pay for pest control if there was an actual infestation that they were responsible for, but if their unit is spotless, and you don't see an infestation, I would expect some push back from the tenant. 

Good luck,

Trey 

@Christopher Lane

I don't mean to come off as an A$$-Hole, but what have you done to prove to your wife that this isn't a risky move? 

From what you've written, it kind of sounds like you have the "Shiny Object Syndrome." You went into sales because you thought it would be shooting fish in a barrel, you invested in bitcoin and watched you're money almost reach 10x, but didn't pull the trigger to sale. Your parents owned rentals locally enough to collect rent, but you're talking about out-of-state investing, and those are two completely different things. You also said that you can't lose in real estate if you're smart about it. That comment alone makes you seem ignorant to what real estate investing truly entails. There's a million and one ways to lose money in real estate. So I'm really not seeing why your wife should trust you. 

Now, to talk about your plan. You want to take $50k out through a HELOC to purchase a rental. The house that both you and your wife live in. Your wife's home. And you want to tie that up in a rental that makes $471/month in cash-flow. It's going to take you 15+ years to get that $50k back. HELOCs work great for flips and BRRRRs, but not long-term rentals.

Secondly, I hate to break the news to you, but you don't make $160k/year. You're making $160k THIS year because you're deployed. What I would do is squirrel away as much of that as you can (which should be all if you're in Kuwait and your wife is taking home $100k) and use that money to invest more passively that being a landlord. Maybe she'll be on board with that. 

Take that money and lend it in a 1st position mortgage. Then you don't have to worry about tenants, toilets, and termites, but instead on an investor paying you exactly what's written in the promissory note. 10% return is fairly easy to get, and if the borrower doesn't pay, you get a house. That's a lot easier to convince someone than taking on $100k+ in debt, for the potential of $400/month. Maybe once you show her that you can actually be successful at it, then she'll be more on board. Roll the interest into purchasing a rental. But I don't think your first move should be a rental, especially if you're not on board. 

Don't give up or resent her because she doesn't believe in you're investing goals NOW, but instead show her that you can be successful.

And don't try to hide it behind her back. Unless you really don't want a wife, but also don't be the one to ask for a divorce. Because any smart woman (she's a nurse for crying out loud) isn't going to stick in a marriage where the husband thinks it's a smart idea to hide something from her, especially when she's already told you her opinion on it.

Best of luck 

@Gerry Harris

That's awesome. It sounds like you're on the right track. 

You should also read The Automatic Millionaire if you haven't. I personally think that anyone with debt (especially bad debt) should read that book.

Best of Luck! 

@Gerry Harris

The first thing you need to decide is if you're disciplined enough to use the cash-flow you intend on buying to build wealth. Whether or not you should quit your job is irrelevant until you can look in the mirror and honestly believe that you have the right mindset to become financially free. 

To be frank, you should already be out of debt. $45k/year is ~$3,750 per month. Even if you were in a 30% tax bracket and took no deductions, you still have a surplus of money each month after living expenses. Had you put that surplus towards your debt, over the 5 years you've been working, you'd be debt free. What makes you think more income is going to change your life if you're not already in that mindset? 

If I were you, I'd put that $100k you're getting into a CD, even if it made 0%. Figure out how to pay off your debts, with the income and expenses you already have, and make it automatic. Once you've become disciplined enough to live like that, then you can decide if you're ready to invest or pay off debt. But until you're mentally ready to not look at the cash-flow as income, but instead a catalyst for wealth, I don't think you're ready. 

Again, not trying to be rude or anything, but I think you're putting the cart before the horse.   

@Isi Nau

That looks great! But unless this is a classified as a multi-unit, you can't get it for 5% down. You could potentially get it for 10% down, but not 5. Still a great job on the rehab though! I like the finishes. 

@Sarah Singh

@Account Closed is absolutely correct with the taxes. They'll take a lot off the top. 

You're also going to have to pay about 30% towards income tax. AirBnB's are the new fad. Wait until the market starts to correct, job growth declines, and fuel prices begin to climb again. In general, people are going to take less vacations, especially long-distant vacations to the middle of the ocean. 

I'm not saying this is going to happen right now, but I would advise against running your numbers based off what income you could potentially make from AirBnB. Run the numbers like a long-term rental, and if it's still a good deal, at least you'll have a back-up plan instead of a vacant vacation rental that can't keep itself above water. 

@Nate Rohlf,

No kidding. I thought that was a typo on the price when I first saw it. 

The 3bed is at least Under Contract now, so hopefully that gets out of the way soon.  

@Dave Passey

There has definitely been a slow down on Oahu. There’s a slowdown all across the country. Hawai’i is no different. Last year it was common to have multiple offers on just about every open house. Now those houses are sitting for 2-3 months before a contract is drawn up. Prices started  coming down in April out here. So I wouldn’t put a lot of weight in your assumption it’s because of the season.