All Forum Posts by: Martin Warren

I signed up with a property manager to lease and manage my single family rental and it has been almost 5 months and still no renter.  This is a very reputable property manager in my area (several people recommended them).  I have asked them if there is anything I can do to help get it rented and they keep telling me that it is a great house and they are confident that it is priced correctly.  They have already dropped the price by $75/month.  From what they say, they are showing the house 3-4 times a week but nobody has put in an application.  They even told me that houses in this price range are the easiest to rent back when I signed the contract.   I have an investor friend that owns three similar houses on the same street and he has never had any trouble renting them.  Is this common?  Are they not doing their job or does this actually happen a lot?  Do I have a crappy house?  Can I get out of this contract?  What can I do?  Thanks.

@Jesse T. 

Also, the 30 yr is a mortgage that will be sold on the secondary market.  The 15 yr was bank loan from a local bank (no appraisal fee, no escrow, etc)

@Jesse T. 

The bank is charging me an "administration fee" of $895 plus a $231 discount fee.  I know I can get rid of the discount and take a slightly higher interest rate, but the $895 is not negotiable.  I asked a banker friend of mine about it, and he explained to me that they are charging that fee because the loan amount is so low and they need it to hit their margins.  If it was a $150,000 loan, I could negotiate it down or maybe even get them to waive it all together.  That is not an option on this small of a loan.  I have checked with another bank and the closing costs were very similar.

Just looking for some advice.  An offer has been accepted on my first rental house.  Closing costs were much more than I was expecting (and what was originally quoted for me) on a fixed 30 year mortgage so now I am exploring another option.  Here are the details:

Option 1:

Purchase price:  $37,000

Down payment: $7,400

Closing costs with 30 year mortgage: $2743 plus $987 pre paid costs due at closing (tried to negotiate some of the origination fees but the bank wouldn't budge one penny)

Monthly payment with 30 year:  $272.72

Interest rate:  4.5%

Option 2:

5 year balloon amortized over 15 years

Same purchase price and down payment

Closing costs:  $1527 with no escrow so no pre-paid costs up front

Monthly payment:  $327 (including insurance and taxes that will be paid separately)

Interest rate:  4.75%

The bank only charges a $350 renewal fee at the end of the 5 years

Monthly rent after management will be between 585 and 630. 

I know this is not a ton of info on the deal but hopefully someone can weigh in.  I am at work and had to type this up quickly. 

I want to buy another home this year and the $2200 difference in closing costs will help me to do that sooner.  I understand the cash flow will not be as great and that's what I'm weighing.  Seems to me that saving that $2200 up front would make up for years of the difference in cash flow.  Opinions?

Just looking for some opinions here.  I know there are probably several different ways of doing this.  How do you generally work the closing costs?  My realtor suggested offering more on the purchase price and requesting the seller pay all closing costs.  I have also read some opinions that say to offer less towards the purchase price and also offer to pay all closing costs.  Or just split them?  Just looking for some pros/cons for each option.  Thanks in advance. 

@Matt Leavell 

@Jon Huber 

@Ricky A. 

Thanks for all of the feedback.  It is much appreciated.

@Account Closed 

I plan on using a portion of the cash (up to 10k) for the initial investment (down payment plus any repairs) and saving the other 10k for maintenance, vacancy, unexpected expenses, etc.  I have a friend that is a realtor and plan on working with her to help me find the right home and rent it out quickly.  For my first property, I would like to find something that does not need many repairs.  I understand that a 30-40k house will more than likely need some repairs, I just want to avoid anything major.  I also plan on being the landlord myself for my first few houses.  I will see how it goes from there and will consider a property manager if needed. 

I am an insurance agent in Alabama and have recently been introduced to REI by a client. I insure about 60 single family dwellings for a guy in town and have been picking his brain each time I've met with him over the past year. I have ordered several books and have started reading them while getting financially ready to start investing. I just wanted some advice since everyone seems so willing to share their experience with the newbies. I have about $35K in equity in my $165k primary home (15 year mortgage). I have $20k cash set aside for my "real estate fund." This is separate from my personal savings (emergency fund). Between my wife and I, we have about $12k left in student loan debt, and about $17k on my wife's new car. We make a decent living between the two of us and are usually able to use about $2000 a month to either save or pay down debt. Should I continue to pay down the debt and not invest until I have no debt other than my primary home? Should I go ahead and try to get a loan and get into a rental and get the ball rolling? In my area, I can purchase a home for about 30-40k that will rent for 400-600 a month. Just curious if anyone has any personal experience with this type of situation. I am trying to be patient and wait until I'm financially ready but I'm also itching to get into the business because I know a lot of people talk about investing and never do. Give me some advice/motivation please!