All Forum Posts by: Matt Leber

Investment Info:

Single-family residence buy & hold investment in Cocoa.

Purchase price: $110,000
Cash invested: $22,000

My wife and I's first buy and hold rental property bought in mid 2016. We purchased the property with tenants in place and they have been great. We have not increased the rent since 2016, because we have decided that our great tenants are valuable to keep in place during our growth phase. We estimate that we can rent the property for an additional $200-300/mo with minor upgrades whenever our tenants move.

Investment Info:

Single-family residence buy & hold investment in Cocoa.

Purchase price: $110,000
Cash invested: $22,000

My wife and I's first buy and hold rental property bought in mid 2016. We purchased the property with tenants in place and they have been great. We have not increased the rent since 2016, because we have decided that our great tenants are valuable to keep in place during our growth phase. We estimate that we can rent the property for an additional $200-300/mo with minor upgrades whenever our tenants move.

What made you interested in investing in this type of deal?

It was our first deal. Probably not a slam dunk but it was important for us to get the ball rolling by jumping into a deal where the numbers make sense. We are proud that we got started with this deal at only 23 years of age.

How did you find this deal and how did you negotiate it?

MLS

How did you finance this deal?

Conventional 20% down

What was the outcome?

Everything has been easy so far. Our same tenants are still in the property and pay early each month. They have never missed a payment and we have a healthy cash flow.

Lessons learned? Challenges?

Great tenants who pay on time (and early) are valuable to your business. Keeping them in place can give you peace of mind while you scale to other properties.

Does anyone have experience with hiring a contractor to replace a portion of the main line going from house to the city sewer. I am getting it scoped tomorrow to see where the blockage is exactly but we think it is probably a root ball in the pipe (caused by nearby tree). I will probably have a section of the underground pipe cut out and have it replaced. Has anyone on BP hired anyone in the greater Orlando area to do this job that has done exceptional work and been affordable? Recommended contractors? Estimated cost? Thanks, Matt

Hello All,

If I wanted to season heloc funds for a 7/30 closing date on a rental property with conventional 20% financing, when would the funds need to be in my account by? Is it 60 days prior to closing or 60 days prior to my mortgage application? Or two monthly bank statements?

Thanks!

Hello All,

If I wanted to season heloc funds for a 6/30 closing date on a rental property with conventional 20% financing, when would the funds need to be in my account by? Is it 60 days prior to closing or 60 days prior to my mortgage application? Or two monthly bank statements?

Thanks!

Hello All,

My wife and I have recently started the process of applying for a fixed rate (4.5%) HELOC with $100K limit with a draw period of 10 years. We own a primary residence and 2 rental properties. The reason we wanted to open a HELOC is to give us flexibility and piece of mind in case major repairs come our way or if we spot an opportunity to buy a property that needs some work. We intend to keep the balance on this HELOC at $0 more often than not.

I spoke to my mortgage originator and asked him about Debt-to-Income requirements for their conventional loans. He told me that they start to balk once the client's DTI reaches 45%, making it harder to qualify. I asked him if having this HELOC sitting off to the side at $0 balance is going to negatively affect my DTI and his answer to me was "it will not negatively affect your DTI % unless you borrow against it and have a payment scheduled."  Does this answer check out?  It seems that I've read conflicting forums on the subject.  

Again, we plan to have 20% down plus closing $ in our checkings/savings accounts for our next property purchase - without having anything borrowed from the HELOC. Am I hindering my borrowing power & negatively impacting my DTI by just having the HELOC available?

Thanks in Advance,

Matt 

Hello All,

Recently my wife and I have bought our second rental property and have been self marketing it at 1500/month. Some info about the house - it is a 4/2 in a great area, but it has no back exit, so you have to walk through the front and all the way around to get to the backyard. We had a showing with a potential tenant this week, who offered to install a rear door, small concrete pad, dense sections to keep his dog in, and an outdoor light fixture. He said all improvements would be made upon my approval and in return I would drop the rent to 1400/month. Is this a totally bad idea to even consider? Your opinions are appreciated!

Recently, a home in an established neighborhood near me was listed as a rent to own with monthly rent payments of $1,000. However, market rents in the area are closer to $1,600/mo. With rent to own, would I be able to purchase the property for $1,000/mo and then turn around and rent it out to someone else at market rent? Or is there usually something in the typical rent to own contract that would prohibit this?

If this strategy is viable, is there usually a big up front payment or other pitfalls involved with rent to own properties?

Thanks!

Matt

Hello All,

I am looking to buy my first home to live in (Orlando, Florida) and to later turn into a rental property. I want to become a buy and hold investor and am looking for cash flowing properties. With this plan in mind, of course I want to buy my first home as a great deal!

I have heard advice on BiggerPockets saying that some investors will call on Craigslist listings in the rental category with hopes that the owner is tired/frustrated with the property and is willing to sell at a low price. Has anyone had success with this strategy? Here are a few questions I would like to ask:

1) Are there any specific characteristics that you look for in a Craigslist post to identify if that lister might have a higher probability of wanting to sell? (Lack of description, below market rent, bad pics, etc.)

2) Is there a good way to identify the posts of "Mom and Pop" landlords who might be a bit out of touch with technology or market rents? Is there anything specific that you look for?

3) How do these conversations generally go when you call someone who hasn't put their home up for sale? Any tips on how to structure the conversation or specific questions to ask the lister?

4) If you have had success with this strategy, can you please share the story?

Thanks everyone,

Matt

To this, I would say our budget is up to 180k, bc we do not want to overspend on a place we won't be living in long term. Ideally, we would move out and keep it as a long term hold rental indefinitely. We would like to have multiple properties in our portfolio 10-15 years down the line, bringing in enough cash flow monthly to offset one of our incomes. 

We will each be making about 50k/year and aggressively saving by trying to live on only one of our incomes. So, I would guess that we should have plenty of funds liquid to love into 2-3 properties in 10 years. Also, our jobs are 7-5, but offer some flexibility w frequent 3 day weekends. I think we can landlord if we hustle a little. 

We are both committed to expanding our passive income by living this lifestyle while we are young.  We would like to one day have plenty of time to do whatever we want with our kids/ourselves and not worry about money. 

Thanks