All Forum Posts by: Patrick Liska

you have in your numbers $150 / month vacancy or $1800 for the year, will it really cost you $1800 to fill a vacancy? how long does it take to fill a vacancy? you have to look into and Negotiate a PM's contract, I do think your numbers are right on. I have properties that do about the same but I do not worry about it, one way to look at it is that your costs are being covered by rent, with a little extra, you cant quit your job on it but the Tenants are putting Equity in your pocket for future use. As long as you are not loosing money your in good shape. your CAPEX is $75 / month, nice to figure that in, but what will that repair? when figuring costs like you did its good to figure that, but I do not not use that to determine if a property makes money, what I do is bank any additional money in the account, if your able to save enough in the account to cover your most expensive repair on the property, then the rest is yours ( usually replacing your roof would be your most expensive repair)so 10K roof with $275/m profit(200 + 75 for capex) will take you a little over 3 years to build up to pay for, without taking a loan out. in that same 3 years the tenants have built up about $7200 in equity in the property

@Joe S., yes I have, twice.

@Kate Barry I have never done it to purchase 2 properties, but maybe a lender will work with you on that. what you are doing is using the 1st house as collateral. say you have a 200K house, you have 100K in equity, most banks will lend out 70-80% so lets say 70% of the 100K equity, so you would have 70K to use. you find a property for 350K then you go to the bank and say you would like to buy the property but use the 70k in collateral from property 1 as the down payment, they then put a 2nd position lien on property 1 and lend you the full 350k for the new property, so now your mortgage is the full 350k and you have a 70k lien on the 1st property. should you fault on property 2, you will be forced to sell property 1 to cover the debt.

They would use the collateral (equity) in another property, usually with the same principal as an equity line. They do not actually take the money, but hold the lien or 2nd position mortgage, should you ever sell that property with the lien on it, they may either want that amount or ask you to switch the lien to another property, if you have a 3rd. I have actually bought property with no money down using this, another thing it does is help protect the equity in your property by showing that there is a 1st and 2nd lien on it.

Do you own other properties? Use them as collateral as your down payment, some banks may do that and put a 2nd lien on that property allowing you to put down less money on the 3plex

Garbage disposal is included in the property taxes

To add to what @Chris K. was saying, in PA, everything has to be "plain language", if everything you have is in legal jargon, it does not comply with the State law. call a couple of Attorneys and see what they would charge, any money you spend to get it right the 1st time will be worth it as you continue your Business, it will be invaluable in the long run.

What they are looking at is your credit worthiness, that new property could mean another loan and they want to make sure you can cover your debts, which yes, should be reflected in your debt to income ratio. Depending on your banks practices they may be weeding out loans and determining ones that they may want to sell off to another lender, not all banks keep their loans but you still pay them, the other lender may be a subsidiary of the bank. If you are new to them as an investor (2 years is still new), they may keep more of an eye on you until you have proven yourself to them. I have not had my Bank do this, nor do I have property of that size yet- all multi family up to 3 family.

2 blocks from the beach, you will get some salt air damage, there will be maintenance, but not like ocean front. I am currently working on an ocean front home in Monmouth Beach, which is not far from Seaside. During the winter there is a slow down off people but there is still enough people that live there year round. Seaside has one of the most popular boardwalks and at night is when it gets really busy by the boardwalk. Seaside does have quite a few family vacationers but by the boardwalk at night it becomes teen/ 20 year olds scene, it's kinda known as a party town.

Kyle,

It all depends on how much you feel you can handle, as you have heard from some, you should manage your self, and some, if you can afford to or distance is too great then hire a PM. my 1st property, I hired a PM right away, the property is 3 hrs away and I do not have 6 hrs or a whole day to shoot out there. I have heard from others that say they manage from that far, but it is up to you what you feel you can handle. do not get me wrong, you can self manage from afar if you have the right people in place in the area to take care of things for you, then you only pay them for the work done. I personally sleep better knowing everything is taken care of, repairs, $ collection, Evictions if need be,etc., they even take care of paying what utilities I am responsible for, with the exception of Mortgage, taxes and Insurance - I handle those for all the properties. I am a contractor and know what it is like dealing with people most of the time and taking care of emergencies, I did not need to deal with that with my Passive income Investments.