All Forum Posts by: Kevin McDonald

I have four properties (Live in one, rent two, rehabbing 3rd rental as we speak). I got started in real estate by buying a unfinished house (had to get HELOC on personal residence to purchase), I finished building the house (doing most of the work myself) when I was done I got a Cash out 30 year mortgage and paid back my heloc for what I has into the property. I moved into the new house and rented out my old residence. Next I used the heloc again and purchased another foreclosed house (2nd rental) that needed work for under market value. I fixed up the property rented it out, and in 6 months I got another 30 yr mortgage for (70% of house appraised value) and that was enough to pay back my HELOC for everything I had into the property. I bought another rental (3rd rental) and I am currently rehabbing the house, when I am done I plan on doing the same thing and I should be able to get a cash out 30 year mortgage for 70% of the value which should pay back my heloc.

I plan on repeating this multiple times am I able to do this or is there a limit on how many loans I can get this way?  I have also heard I can only get 10 mortgages total, is it possible to do 10 in my name and 10 in my wife's name as long as we can qualify (not sure if we can)? 

The only disadvantage I have had so far is paying all the closing fees (recording taxes, other fees) when I purchase property originally and in 6 months I have to pay them again. 

I self manage all my properties, and all my properties are within a few miles of my residence making them easier to manage. 

Thanks

I did a 80% cash out loan about a year ago. I bought a property which was half built at a discount price (less than land value). I finished building the property myself (I used a HELOC on another property to finance the whole deal). When I was done I had tons of equity so I got a 80% LTV 30 year mortgage to pay back my HELOC.

I am getting ready to acquire my 3rd rental property and it is already starting to be a pain collecting rent payments.  I want to start using an electronic rental payment service to make it easier for myself and my tenants.  I was curious if any of you use electronic rental payment services and if so what if you have a tenant who insists on paying cash?  Do you require the tenant to use the electronic payment service in the lease or do you offer it as an option? 

I know a lot of old timers are set in the way they do things and just prefer paying cash, I would hate to loose a good tenant over requiring them to do something they don't want to do. 

I have done some research and it seems a lot of people seem to like erentpayments.com on this forum.  I looked through the questions and answers and don't se any instructions for somebody wanting to do a cash transaction. 

Thanks

Kevin    

Thanks for the advice. 

Yes, I bid 89% on asking price on last one.  The next one I was going to try to start at 80% of asking price (cash offer no inspections) and see what happens.  I just didn't want to go too low and have them not even counter offer.  My thought was try for a 20% discount and be willing to go up to a 10% discount. 

Thanks

kevin

getting ready to buy my 3rd rental property.  bidding on ones that have been on market for over 100 days.  The last one I bid 11% of asking price and my bid was accepted.  In the past low ball offers have not been accepted in my area the banks just lower the price every month or two by 10%.  Will banks counter offer on low ball bids?  I was going to try to offer 20% down and see what happens.  

Thanks 

Kevin

I just had a new tenant move in, my rental ad and lease agreement states this is a NO SMOKING rental.  I went to the property to do a walkthrough with the new tenant (the movers moved everything in late Saturday night I met with them first thing Sunday morning for a walk through).  I noticed the moving boxes and furniture (couch) smelled really bad of cigarette smoke.  I had a friend with me and they agreed it really reaked of cigarette smoke.  I have no proof they are smoking in the house, and maybe the last rental they were allowed to smoke in the house.  How would you handle this situation should I remind them again this is a non smoking house?   

A new tenant just moved into my rental house (year lease signed).  He asked if he could hang a rack above the kitchen counter to hang pots and pans on it.  I told him I need to think about it.  Am I being unreasonable if I tell him he cant?  I know this rack needs to be fastened into the trusses or brackets tied to the trusses.  I just finished doing a really good paint job on the whole house , and feel if they leave in a year its going to leave 4 massive holes in the ceiling which will need to be filled and now the whole ceiling will need repainting. 

I almost want to say if you want to hang it, its going to be a professional person go in the attic and add in proper bracing to hold the rack (at renters expense) and when you leave the rack stays.

What would you do?     

Thanks for the advice/comments.  My plan is to not cash flow it at all right now, I will just keep all the profits to pay for repairs, months not rented, etc.....  I am really looking at long term plans.  Once I have a good nest egg to pay for a few months not rented and extra money for repairs, maybe at that point I will start taking out some of the profits.  

Thanks again. 

Do people really get 2% on rent of the purchase price?  At least where I live there is no way this rule will work.A house that sells for a 130k (that doesn’t need any work) will get about 1200 to 1400 a month rent; no way would it ever get close to 2600k/month.  A 200k house will get 1800/1900 rent.  I just can’t believe there are places in the US where I can buy a 100k house and rent it for 2k dollars a month.

I just purchased my second rental home, my strategy is buy foreclosed homes that need minimal work; most of these are cash only sales "AS IS" fix them up and rent them out. I use my HELOC to purchase and fix up and in 6 months get a 30 year cash out mortgage and pay back my HELOC. I am an extreme DIY'er, I do most of the repairs, and will sub out major tasks (I work a fulltime job, and as I get more houses I will have more done). I self-manage, do my own advertising, leases, work, etc….. I only want to buy houses close to me (within 5 miles) so they are easy to take care of.Here is my last deal:

Paid $108000 for house (3 bdrm/2ba, 1450 sqft rancher, nice flat yard).

$2500 settling fees (don’t have exact amount just a guess)

$2250 in supplies to fix up

In six months when I get 30 year cash out mortgage another $2500 (guestimate) in fees for new loan.  I have signed year lease tenant moving in 30 days from purchase date on this property.

Total investment that will be on loan in six months when I get a 30 year mortgage to pay back HELOC is $115250; 30 years @5% (guess on interest rate) payment is $619/month.Taxes, HOA fees and insurance are $241/month. So my cost per month is $861 per month.

I am getting 1400/month rent on this property, which is the going rate for a property of this type in my area (I did tons of research on rental prices).  My profit (not accounting for expenses are $539/month).

I would love to make as much as I could but I just don’t see how it can be done in my area, basically if you were going to have everything done, and have a property manager you would not make anything in my area.  This house I got sold for 240k in 2008 and should appraise for about 150k now.

My plan is long term, just looking for some extra income when I retire in 15 years; I plan to get 10 properties.

I just wanted opinions on my deal.

Thanks