All Forum Posts by: Malcom Smith

Landlord here: I've a new tenant moving in next week and during the walk-through he points out some minor issues on the walls in two of the rooms (previous tenant hung pictures so there's some pin holes and marks on the paint). So he wants those rooms repainted and also wants his bedroom repainted a different color.

He has a "painter friend" lined up to do the work so I offer my tenant $450 toward painting the two rooms and tell him he will pay for the color change in the bedroom as that's personal preference (nothing wrong).

Tenant says that's not enough money for his painter who wants $450 per room (total $1350) so we agree in writing he will pay me the $450 for the bedroom and I will get the painting done, covering the cost of the other two rooms myself (I know I didn't have to do this but I was trying to be nice).

So I paint the rooms myself (they are perfect) but he's now refusing to pay saying he thought he was getting a professional painter for his money.... and wants to pay me less.

He hasn't even moved in yet and I'm very worried I have a needy problem tenant. Am I within my rights to do painting myself? He has signed an 18 month tenancy agreement but not paid security, rent or the agreed painting cost. 

Can I withhold keys if all of this is not resolved before move-in?

Exasperated... 

2.2K off 60K is very good! How much of that is profit after you paid the lender, management, turnover etc?

The comment "just needs to exceed what your interest rate is on your note" is the one that's stated most often but most misleading to me to me.... 

An ARM might be a point better at most but doesn't change the numbers by much or change the discussion.

That small 3.625% interest rate I have turns out to be 62% of my yearly mortgage payments going straight to the bank. 

As for the time value of money, the bank has that covered in their favor too; in that the majority of my monthly payments in the first 15 year go to them covering their risk quickly, and leaving me with limited principle reduction. 

So when you say I just need to find an investment that exceeds my interest rate are we talking about the 3.625% or the actual 40-60%???

Here's my math. What is the right math for this discussion?

Thanks!

Hi All,

I'm doing the math on the benefits of investing 2K a month into paying my mortgage off early and it looks too good to be true so I'd really appreciate others thoughts on my math:

$755K, 28 yrs remaining on a 30Yr fixed @ 3.625%. $3,580 monthly payment

$448K in interest due over the remainder of the loan.

Accelerated schedule (no-refi): $2K additional payment per month will finish the loan in 15 Yrs

$217K in interest paid over next 15 Yrs saving 230K (448 - 217) in interest payments.

230K / 15 = $15K saved per yr for $24K per yr in addition payments = 63% ROI on the additional payments!

Is this right? I'm thinking this is the best ROI I can get on 2K.

Hi all,

Been lurking for a while now reading as much as possible and learning alot.

I call myself an accidental investor as I've never thought of myself as an investor having lost money the two times I was into munis and stocks. With a very well paying job I just concentrated on saving as much as I could but now find myself mixed up in a bunch of things....

The first property I bought was a fancy 450K penthouse condo which was great for the 5 years I lived there. My family expanded so we bought a 1Mil house, deciding to rent out the condo as values had dropped a little below what I paid. Cash flow was slightly negative but I could afford to hold it and thought why not albeit the mortgage was 5.875%

Two years after buying the house rates have dropped so I refi'ed from 5.25% to 3.625% and also saved enough to completely payoff the condo mortgage.

By paying off the condo I get the whole mortgage rate back as if I was invested in something else at that rate. I could refi the condo down to around 3% but having looked extensively I cant find any investments without risk that would give me an larger net return.

To top it off the bank I refi'ed the house with also gave me a 100K Heloc for 4% and told me they have ETF funds averaging 13% return.

So the accidental investor in me says to go safe, pay the condo off and enjoy being a landlord with 5% RIO.
The ambitious investor in me says refi the condo, put all the free cash and 100K Heloc into ETFs and enjoy a 10%+ RIO.

What's your vote?