All Forum Posts by: Mark Stone

Thanks Melvin, I wouldn't want to stay living in the triplex so would likely have to refinance into a non-owner occupied loan therefore with a higher rate, but since I currently have an ARM and PMI I guess it would still make sense to do so.

Also, I spoke with LO about their program for medical professionals and he basically said that with a condo purchase they require a minimum of 10% down, and the rate is about 1-1.25% higher. He thought it would therefore be a better idea to do traditional 5% down, get a lower rate, but pay PMI until have the 20% equity. Any thoughts on this? Would save money on the mortage over 30 years per my calculation and in the beginning the route with 5% down with PMI only seemed to be about $50 more a month and get to keep $15k in my pocket.

Thanks!

Hey everyone, 

I have a few questions and was hoping I could get some insight from those with more experience then myself. Thanks in advance for any help you can provide.

I currently own a triplex that was purchased in August of 2015 as an owner-occupied, with an FHA mortgage originally with 3.5% down. I have since remodeled 2 of the 3 units and am not entirely sure it's current value (estimated about ~$300k), however I am looking to purchase a new property roughly 25 miles away in Tampa for $300k and am trying to determine the best financing route to go.

I was thinking about refinancing the triplex to get rid of my PMI and get a fixed rate (currently have a 5/1 ARM bc knew I planned to remodel and refinance quickly, but hindsight wouldn't do that again). And then doing the new property as an owner-occupied. I would still want to put minimum down but not sure if I would necessarily need to do FHA as I have pretty solid credit (was unaware of non-FHA loans with less than <20% down when purchased first property).

Other options might be to explore a second FHA mortgage if I can meet their requirement of relocating for work, which from my understanding is done on a case by case basis, however not sure this would be a good idea because would have my PMI on old property still unnecessarily and still have the 5/1 with rising rates.

If I were to get a new loan as an owner-occupied who I be required to refinance the triplex anyways bc I would no longer be living there, or would it simply be harder to obtain a 2nd owner-occupied loan when I would be moving to a similar sized unit.

And last thing I could use some advice is on a program by Regions for medical professionals where you can put down as little as 3% if you meet their requirements of being a medical professional in your first 7 years out of school, has anyone heard about this program or similar ones? 

Thanks for any help you can provide!

I really appreciate all of the advice you guys. 

I don't think she is about to go willingly, but it is definitely my best option. She even mentioned in our conversation how she knows how costly eviction can be so that she knows I don't want to have to do that. 

I don't mind giving her back her half of the deposit (without even charging damages, after a quick walk through that the place is all of a sudden in shambles) and I even offered to hire some guys off craigslist with a moving truck and lend a hand myself with the move. (and thoughts on liability doing this part?)

From my readings on Fl law, if she tries to stay I would assume the earliest I could file is April 1st, but since that is a weekend it will really be on Monday April 3rd. Then she has 5 days to file a response, and then I would have to get an officer to remove her which would likely be on Monday April 10th.

Great advice on staying out of the transaction with the car and also documenting that the deposit (or half of it was returned) 

Thanks again everyone!

...and Andy D, retrospectively I should have got rid of them a long time ago, but I was always chasing rent and would get it near the end of the month in full, so didn't want them to not pay once they knew I was evicting them....so many lessons learned the hard way. I am sure I will laugh about them one day!

Hey thanks for the ideas Lynn, especially the verbage for new leases I draw up ... yeah I inherited both the tenants with the property and am excited to finally be getting rid of them.

I did read that filing a "Holdover Tenant Eviction" seems to be faster than a Failure to pay rent, per a local guy on this site.

http://danpolicastrolaw.com/how-to-evict-a-holdove...

But I just feel bad she has no family and 2 little kids, don't want to kick them out on the street :X

Thank you in advance for any insight or advice you can provide! I will explain in detail the scenario below but will start off with the abbreviated version (TL:DR) version first.

Thanks!

TL:DR

Tenant suppose to be out end of March but has no job so couldn't find a new place; BF aka help now in jail. She has 2 little girls and no where to go.

More background:

-So, I have a tenant in the back unit of my Triplex on a month to month lease; bf also on lease but he is now in jail for foreseeable future for breaking probation. I gave them notice at the beginning of March in writing that I wanted to end the lease at the end of the month of March. They had led me to believe they had found a place and were leaving. She now says that fell through, and she can't find a job in order to rent new place. Has 2 young girls living with her. She wants to pay week to week until she can find job and a place to move to ASAP. Has money from filing taxes but not enough to last much longer than end of the month. 

-BF (and even GF to a large extent) have been horrible tenants; front tenants almost wanted to move out bc of them being insanely loud in the middle of the night

-BF has drug issues and was bringing people back to the property to likely sell

-I wouldn't mind giving her another week if she paid me a pro-rated amount for the first week of April and then I got her to sell the additional car they bought (old mustang) in hopes that gives her enough money to move out easier.

-My main concern is if I give her another week will that make the lease automatically go for another month or something, and I don't want BF getting out soon and coming back to live there. 

-Could I end the current lease and draw up a week to week lease with only her with stipulations that the BF couldn't live there?

-Or in the next few days should I help her sell the extra car and then kick her out with enough money to at the very least go stay at an extended stay hotel until she can find a place?

Thanks again for any input. 

I have a question about Buy and Hold strategy that I was hoping some of you could give your input on and perhaps point out the flaws in.

I feel like I keep running into properties that have been flipped recently and look very nice/completely re-done, however they are in horrible areas still. The people doing these are probably buying them cheap and obv just flipping the property for a quick property so I can see how that would be lucrative. 

However, it go me thinking about the best way to make money on buy and holds in an area that is becoming safer and nicer. Do people ever go about buying a property in an up-and-coming area with the intentions to rent it out for cheap right away, with their main goal to wait until the area has become a little safer and nicer, and then sink money into it with rehabbing it and charge the higher rents? Because if you were to rehab it right off the bat you would have to put additional money into it and may potentially not get much higher rents due to the fact that people with incomes that can afford your property don't want to live in that area yet.

The area I am referring to is in Tampa, Fl. I am sure this happens in many markets and yes there is some speculation involved with whether or not an area will improve enough to make this worth while, but if you buy the property at a decent price, then you could potentially still be covered if the area never does in fact improve.

Thanks for any input.

good to know @Ricardo P. Thanks for the correction!

If I am not mistaken Simply Safe would require WiFi tho. If you will have WiFi then there are numerous option that are easy to move around.

I purchased an Oplink system off Amazon for $300, and it works great (if you have wifi). It will alert you real time on your phone when an alarm goes off and you can pull up the live feed of your cameras whenever you want.

Search Amazon for 
"Home8 Oplink Video-Verified TripleShield Alarm System" 

I have read a trick that they will allow you to have an additional FHA loan if you meet the criteria of moving closer to work or something along those lines. Not sure the exact criteria though and whether or not it would be relevant in your case.

Well I did a regular FHA loan on my triplex owner-occupied. It was only 3.5% down, and all the units needed rehab, so it let me keep my cash to focus on repairs. Doing this you do get hit with PMI due to the low equity in the property. Rates are low right now so if you end up taking longer then expected to rehab or can't force the equity to 20% post-rehab then refinancing to get rid of the PMI may be pushed back longer and lead to a higher rate when you refinance. You also could be inheriting a property with bad tenants unknowingly since you didn't select them, so need to do your due diligence on obtaining solid proof they were paying rent consistently or you could get stuck covering a higher part of the mortgage. Also, if you have a triplex or quad, that is 3-4 times as many things that can break down of course which can be a nuisance if the property is older or if you arent't too handy fixing little things. I don't know all of the ins and outs of the FHA 203k since I haven't done it but the money they give you for rehab I believe has to be done by a licensed contractor, so if your goal was to do most of the work yourself you may not be able to. Of course you could just do the 203k loan amount for big repairs that are beyond your scope of capabilities.

Like I mentioned before though people have great recommendations on here, but you need to figure out what works for you and what you enjoy. My goal starting off was to slowly build up a stock of buy and hold properties. I have learned with my first one though that dealing with tenants is not my cup of tea, so property managers may be in my not to distant future or I may switch to at least properties dealing with higher quality tenants. 

People have suggested flipping on here too, which can be great money, but if you are new to RE in general it might be a steep learning curve and be more risky until you know more. For example, I wouldn't feel comfortable jumping into a flip right now unless my first deal was with someone who has already done a few and has learned the ropes somewhat.