All Forum Posts by: Brant Richardson

It's time to see that third unit, you can't decide without seeing it.

As a carpenter you should be able to raise the height of the windows, put up railing, make them unable to open... something so a kid can't fall out.

How about a spiral stair case?  Maybe connect those two bedrooms to another apartment and make it one big one. You could live in that unit and deal with the steep stairs.  If you can't figure something out to make those two bedrooms work I'd pass.  

You might want to post more of your numbers for us to see too.  Expected rent, utilities, property tax, insurance, mortgage payment, what you are using as an estimated vacancy rate.

My contact in Kansas City found a buyer for my most under performing property.  Bought it in 2012 for 52k, sale price 95k.  Feeling pretty secure with a lot of dry powder now.  

@Jared Cheney

You described the kind of property I would not allow my friends and family to invest in.   I have been an out of state investor working in the KC area since 2013.  $700/mo is still low end, you will likely end up with damage and vacancies.  $50/mo cash flow will not cover your capex, it's fine for an appreciation play in California but not for a cash flow market like KC.  I got lucky and met an agent/project manager/property manager who kept me out of those areas.  The numbers look great when you are used to looking at California real estate but it does not pan out.  If you lived there to do all the work yourself and rented to people you know and trust then you might do well with those properties.  I invested in B and B- areas (rent 900-1100/mo) which are doing well but if I changed anything I would move up to even better neighborhoods (which is what my agent recommended from the start).  You want to move your search out into the suburbs, Independence, Raytown, North KC, areas with good schools.  Vacancies are the worst profit destroyer, not just because of the loss of rent but you also pay utilities, cut the lawn, then property management takes 75% of the first months rent for the work they do getting a new tenant in there.  So you really want a property which will attract a stable family, which is why being in a good school district is important.  For people who have been investing in KC for a while it feels like all the deals are gone but if you compare it to California its still amazing.  I can introduce you to my guy out there if you are interested. 

@Rigoberto Medina

Real numbers showing progress.  I love it!

I'm going to say it again. Try to get another credit card which will offer you 0% APR on balance transfers for the first year. If you transfer $10k from a 24% card that will save you $2,400 which you can use to pay down the debt. It takes a very small time commitment and its free. Take action on your next day off.

As a fellow Californian I can say you have your head in the right place.  Live in it, rehab it yourself, rent out rooms, convert the garage.  You have to be creative to make it pay for itself, then hold onto it for appreciation of rent and value. 

Go talk to a bank about getting pre qualified for a loan.  That will help ease your anxiety about the financing part.  They will run your numbers and let you know how much they will give you.  You should always keep your credit score in mind and improve it when possible, even if getting this first loan is easy.  

You consider yourself uneducated.  Change that and change your mindset about that.  Start reading a financial book per month, "Rich Dad Poor Dad" would be a great first book.  Get it used on Amazon.  Six months from now you will be more financially educated than a huge percentage of the country.  Listen to the podcasts on the Bigger Pockets website, they're free.

Construction work is fairly well paid and quite applicable to real estate too.  Becoming a contractor is years down the road but it can really give you an edge with flipping, rehabbing or other more creative changes to a property.  

If she is not in a good financial position she may not be approved for a refi without a cosigner.  I am in the same situation with a mortgage I cosigned for my mom, its a big one too at $600k. 

She can refinance as many times as she wants.  If she has refinanced since you cosigned and you didn't cosign on the refinance then your name should no longer be on the mortgage.

I wrote "I believe" because I am not real familiar with the FHA rules, but after a quick search it does appear you can have other property as long as the FHA will be your primary residence. I am sure somebody who is more familiar will read this post and chime in.

If you cosigned on your moms loan then it will be considered on your debt to income ratio. This effects your ability to borrow more. It may or may not be a problem with the first property buy but will certainly become a problem as you acquire more. A good first step while you are saving up a down payment would be to get your mom to try to refinance and get your name off of the mortgage. If you are on the title of the property as well then I believe it will disqualify you from getting an FHA loan (low down payment) in which case you should plan to pay 20% down on the first property.

Sounds like a good, conservative, realistic plan.  Not a get rich quick, no money down, high risk, fantasy.