All Forum Posts by: Cameron Davis

It is my understanding that the appraisers don't work for the banks. They are sort of randomly assigned to do appraisals... a law that was created after the housing crash. Sorry, but I don't know enough to give further advice on your post. My opinion? I'd go with the better value, but I wouldn't like a 5-year fixed rate unless I was SURE that I wouldn't hold the property longer than that. I suggest getting at least one more quote... they are free and quick.

Take a close look at the numbers, people. Either the Proforma should say $500 instead of $650, or the Rehab should have a dollar amount. After viewing the video, it doesn't appear you can get $650 without fixing it up.

I have used Brian Culliton a few times and he's good with reasonable prices. Tell him I sent ya! You can PM me for more info.  He's at 317-997-7260

@Joe DeLuca

Welcome, and congratulations! It sounds like you're going about things very deliberately and intelligently. I think a triplex hack is the perfect way to start. Just remember, as rentals, you want to renovate with sturdy, good-looking materials. Don't overdue it, or you'll be bummed when you look at how much you've spent, and even more bummed when a tenant wrecks it!

Good luck!

Hey @Dave Mosher

Think carefully about your observation: I see places everywhere being bought, but I don't agree that they are all making money.

I own properties in areas that I wouldn't personally live in, and I have a property manager. Most investors will tell you that the real killer is turnover/vacancies, and that's my biggest problem. My nicer properties have tenants that stay longer and take better care of the property. Even though my monthly income doesn't look as good, when I look at the past 2-4 years, I can see that they cash-flow just about the same, yet are less problematic.

You don't have to invest in A class neighborhoods, and if you don't have much money to start out you can certainly invest in less desirable areas and still make money. But do yourself a favor and stay away from D class, or "war zones."

You've asked some good questions. I don't know all the facts about your current rental, but if it's not cash-flowing, I'd probably "trade it" for one that is. In other words, yes, sell it. If it's $50k and renting for $600/mo or less, that's not great. There are places like Indianapolis and Milwaukee with $50k duplexes that rent for $600/side.

If your property isn't losing money and you want to keep it, I'd try to find a way to increase your rent (renovations, etc) or cut your costs (change insurance, refi, etc).

As far as amortization, my feeling is that you either want no loan, a very short loan (so you will own it free and clear soon), or a very long loan (so you can cash-flow better). If you're worried about the cost of interest over time, well, you have the option of making additional payments towards the principal, but it's nice to have a low minimum payment when you don't have much cash, or you have a vacancy.

Sorry if I haven't answered all your questions, but I'm sure there are other members with better ideas than mine.

A condo is cheaper, but what about the HOA fees?
In any case, you need to make sure that the HOA will let you use it as a short term rental. Many have restrictions... even for long-term rentals!

As far as the users' preference of view over space... I'd have to guess that it varies from person to person. Depending on where the rental is, that might have an affect on what people are looking to stay in.

I don't think walking away is the best idea. Not that your mom cares, but it will destroy her credit (if the mortgage is in her name). If the loan is $17k, needs $20k of work and would only be worth $42k, that's not a great margin for somebody to make a profit. How sure are you of those numbers? I'm sure other members will probably have better ideas, but I'd call the mortgage company and tell them, honestly, what her situation is. They don't want to foreclose.

One question to ask yourself: If you didn't already own the SJ property, would you buy it today? From your description, it doesn't sound like a great investment as a Buy & Hold, so I'm guessing your answer would be "No." If that's the case, it seems like you should sell it. You can then buy your duplex/triplex in Monterey. Even if you have a slightly negative cash flow while living there, your payments should be relatively small. And if you move in 2-3 years, renting out all units should produce positive cash flow.

Yes, you get some tax benefits from owning investment property, but don't over-estimate those numbers.

I think it depends on how passive you want to be. Flipping is a job. Collecting rent is fairly passive. I prefer to buy & hold. Sure, you can make $30k on a flip. With buy and hold, you don't do much work, and you can also make $30k... it's just going to take a few years. But then you'll make another $30k over the next few years. And then another $30k, without doing much of anything!