All Forum Posts by: Lucinda Hamre

 Agreed, and this knowledge isn't something you just find in a book. That means you will learn while great deals slip through your fingers or you'll jump at horrible deals because you just wanted to buy something. David Greene talks alot about finding your team members. Finding people of character who will tell you the truth is invaluable!

 I completely agree! You learn the hard things *when you need to know it!* You can read books, watch videos, talk to others, but nothing causes you to learn better than doing it! BTW, find a mentor or partner. Better to get 5% of a great deal, and learn why it was successful, than lose $30K or more. If only I'd found that person FIRST....

Wonderful! Thanks so much! No one was giving me a clear answer and I appreciate it.

@Stephanie P., thank you for setting me straight on something I thought I understood, but clearly did not. I own my small hobby farm outright and have no current liens against it. The house sustained some damage that is not an insurable loss. It's significant enough that we are considering demo and replacing with an existing house that will be moved off it's lot and onto a new foundation on our property, then having an appraisal done to determine if we sell. 1. I have cash sitting and waiting with more than 60 days seasoning. It's sufficient to buy the existing house outright. 2. I also have a preapproved HELOC that should be sufficient to move the house, but not enough to do the basement, hookups to existing rural water and utilities. The HELOC shows up as $75K, but with a balance of $0. Does seasoning apply in this case? I thought this would be easy, but it looks more complicated than I thought. Is this a different scenario for my primary residence than a rental?

@Erica Gordon, if the availability is holding you up and you need to pay rent, may I suggest that you consider a house hack instead? If I had considered this house hack strategy, I would have been able to convince my husband to buy a rental property LONG before we did. 

What if you ended up waiting for 9 months or so for the "right" duplex property to show up? In the meantime, you are paying rent that is likely higher than a mortgage payment while you wait, and wait, and wait. In less time and with a smaller downpayment, you could buy a single family residence and rent out a portion while you live in the rest Your pool of applicable houses that will pass FHA inspection is also probably greater.

I know a husband and wife that bought a historic house that was a bit of a stretch when they bought it. They converted an upstairs bedroom suite into a very nice loft and rented it, with kitchen and laundry access, to traveling nurses. Granted, it had very nice, upscale furniture, but the rent paid for a significant portion of their mortgagw and allowed them to save for a larger home once they had a baby on the way. Under current rules, after a year, you can likely  find your perfect duplex and afford the downpayment. You can rent the full single family dwelling or sell it in 2 years. 

Take it from an older person. I WISH I had done this. Just screen carefully and don't spend the "extra" money that you are accumulating. In fact, if you are single or without kids, get a second job so you make more, save more and interact with your roommate less! Happy hunting!

Consider that, under current tax code, you can then sell your primary residence every two years and not have to pay capital gains tax. You don't get that benefit with a rental property, but do have other potential tax strategies.

We always think that people who file for bankruptcy are sociopathic spenders who don't care who gets burned in the process, but overwhelming medical bills are one of the top reasons this happens and frankly, it could happen to many of us. 

Depending upon the person's income, ask if there are specific niches that might help. For example, veteran's affairs, social services, vocational rehab and private agencies are all places that provide help in my area. They can sometimes tap into pools of money to help ensure that rent is paid if the potential renter cannot make the full payment or needs help with a more substantial deposit. If there are persistent mental health issues, there are also agencies in many areas that are interested in getting people into long-term, stable housing; one in my area has a "Bridges" program that pays for the deposit and first month's rent to secure housing.

I agree with everyone here that mom & pops usually have more relaxed requirements. I work very hard to be felon-friendly because of my work with past substance abusers. Felonies usually knock others out of the applicant pool by a management company. I also really like any screening that takes into account a person's personality traits besides just their ability to pay. And, how clean is their vehicle? That's a good indicator of how clean they are in your home.

First, don't just think short-term! First, rip out carpeting, pad, all window coverings, and any low-cost flooring. Open bags of barbeque briquettes in each room. A professional ozone generator costs under $200. Close rooms and let it run for at least a day. Do not run it within 1 hour of people in the house! Then, hire cleaners to come in and wash floors, walls, ceilings, fixtures, fan grills, floor grills, and especially inside and outside of all cabinets and shelves with TSP (trisodium phosphate). This, and thorough cleaning of ductwork PLUS cleaning of furnace blowers and filter replacement may be enough.

If not, move to next level. Use Kilz or another blocker, preferably oil-based, on the walls and ceilings, possibly the floor and subfloor; you may also need to do this inside and outside cabinets (personally, I'd take a couple down from the walls to check behind, where nicotine tar can hide). Replace the kitchen and bathroom fans. Nicotine smoke is very corrosive and they fail much quicker. Replace all electrical receptacles. 

Good luck! It might be the 'smell of money,' but it might also be LOTS of time, maintenance. When done, bring in someone with smoke allergies and see if they breath okay. Seriously, this can be a really big hassle, so do it right!

Chris, I so agree! I waited over 2 decades to get my husband on board.  Finally putting skin in the game has forced us to stretch and learn. You can get caught in the "what if" game forever!

We bought a commercial property (4200 ft2 home facility that is a handicapped-accessible 8 BR, 2 bath home, with 2 additional ensuite units that have dedicated bathrooms) that required significant work. As newbies, we were not prepared for the significant work required to the fire suppression system, fire doors and other deferred maintenance issues. But, we turned this into a lodging house for short-term, month to month rentals, with city approval for Airbnb rentals in the future. As newbies, we made MANY mistakes and went way over budget and took far longer than planned. Still, we redeemed a building that was sitting idle and brought it to a great condition again. People walk in and say, "wow, this is nice and far bigger than we thought!"

We were approached by a city official and asked if we would consider selling the property to a nonprofit for a daycare center. We said, "let's talk." The informal negotiations have been ongoing for almost 18 months. We've stumbled and bumbled enough. We have options and such mixed feelings; we really like this property:

1. Lease to purchase, which they will likely want to explore so that they have lower out-of-pocket expenses up front; they want to alter the interior walls and totally change the bathrooms to accommodate their needs. But we are concerned about putting additional money back in once they change so much. We are not sophisticated enough to figure out these details and our lawyer basically said "uh, no!"

2. Basic cash out, hopefully with a 1031 exchange. But we have nothing identified and are not accredited investors so that we can reinvest in something else.

3. Carry owner-financing to get them going. Again, this is a risk if they fail and then have altered the floor plan significantly. But, it could provide us with cash flow over 5 or 10 years, or even longer. With rapidly increasing prices, we question if the bubble will pop. We have begun to see a correction in the market in NW MN and NE ND.

4. OR, get our poop in a group and figure out how to attract better renters, then do a BRRR for $125K original input. If the house was HALF filled, we would have ~$500 per month over costs. Even with a cash-out refi, we could still get cash flow if we could figured out how to put more people in the house and keep harmony. We have been working on systems to make life easier and more efficient.

I have stayed at a couple of hotels for business since COVID. While they have had good discounts, I have been disappointed. Aside from very basic accommodations, you have nothing. The pool and sauna are closed, as are workout rooms, and where I stayed, there was only  in-room coffee and no breakfast or snacks. The hotels I used also required social distancing in the public areas, making it feel very cold and uninviting. I chose the hotels because many Airbnb sites were closed during the last year in northern MN and NE ND, or I would have preferred to stay there (usually cleaner, quieter and safer for a woman traveling alone).