All Forum Posts by: Mason Liu

Similar to @Bjorn Ahlblad, I just keep a lump sum of cash set aside for properties in a money market fund and keep that consistent. That way I have peace of mind, and can budget the 5/5/5% for CAPEX/Maintenance/Vacancy without worrying about if a huge expense comes at the beginning or all at once.

I prefer and pay for Propstream. Can't really comment on the difference in accuracy between the both though.

Technically, it is a 1.7% COC return. Thought I'd point that out.

I would agree with the general concensus that this isn't really a deal. Even though it cash flows $200/month, you're paying over 10% above market value for the 0% interest rate for 10 years. For you to just get back to $700K market value, that assumes a 1.2% rate of appreciation on your property over the next 10 years compounded. This is not even considering the opportunity cost of being able to put your cash in money market yielding 5% risk free (off of $140k, that is $2.8k every year, whereas in cash flow you're getting roughly $2.4k every year now). Sure, rents and values do tend to grow over time, but this just doesn't seem like a huge deal.

If you can talk him down that $700k to get closer to true market value, that would be a big difference.

@David Ramirez talked about SMS and Coldcalling costs, I will chime in with direct mailing.

Cost per mailer can range anywhere between $0.40 to $1.50 per letter depending on where you buy from and how customized it is (IE Robot handwritten vs computer text, yellow mail vs designed envelope). I won't give a cost per contract because it really does depend largely on the mailer you send, lower quality mailers will yield lower call back rates than high quality ones.

Hey Sarah,

First off, congrats on getting under contract on what sounds like a great deal. Assuming you have spoken to multiple lenders (credit unions and local banks included) and are not getting any traction there even after presenting the underwriting details to them, I would say the next course of action would be to raise private money. If you truly have a great deal and an execution plan in place to take down and manage this deal to bring up revenues, you should be able to raise money from private investors via networking.

If that doesn't work either, another option would be to present this to another larger scale vacation rental or motel operator whom would be able to fund the deal, and you can work either an equity split and you manage it, or you pass it off completely to them for an assignment fee.

Good luck with everything!

I would agree towards continuing to rent in your current market (assuming you do not want to move to a completely different city) and renting where you are at. 

At first, I was thinking another option would be to puchase an entry level home in a decent neighborhood that you are currently living in (say for example a 3 bed 2 bath) and renting out 1 or 2 of the rooms. However, doing quick math assuming a $650k purchase price and a 3% downpayment and a 7% interest rate, and your full monthly payment is over $5K/month with insurance, taxes and PMI. Even renting out each bedroom at 1.4k/month, you'd still be out of pocket 2.2k/month without factoring in any CAPEX/Maintenance/vacancy. It just doesn't really make sense given your salary.

Like others have mentioned, you can purchase a rental property that cash flows out the gate in many other markets. 

Personally, I'm invested in equities and real estate, from a long-term perspective.

History tells us that equities and real estate values appreciate over time. I have a very long investment time horizon and high risk tolerance, so I'm willing to put all my investing dollars into equities and RE regardless of short term volatility. I'm not invested in bonds as historically, those offer less upside (of course, because they are less risky), and I'm not worried about downside risk now.

Broad based ETFs, and some Single Family Rental properties, nothing too complicated. Just going to keep adding to the stock and RE portfolio with any additional discretionary income I have and keep chugging along.

Hey Stephan,

So if you have no intention of living in the property at all, you won't be able to get an FHA loan as that is for owner occupied properties only.

Talk to some more mortgage brokers. You may be able to find some investment property loans that require less than 25% down (at least I believe so, though it's been a while since I've asked about fannie/freddie investment loan quotes).

Unforuntately I won't have a good guess as I don't own any multifamily by the beach in Palm Beach County. Your best bet is to probably talk to a couple of insurance brokers to get a true idea.

Hey Maria! I personally have Universal as my insurance carrier in Palm Beach County. Lately though, it's been hard to get reasonable insurance quotes. I'd get a quote from Citizens, and then also talk to an insurance broker.

If you are doing an STR, I think that changes things as well.