All Forum Posts by: Michael Perry

So My first property ever should be closing in the beginning of October... Yay!!

But I'm not sure what to do here. I want to set up an online rent collection account. Maybe with Cozy. I went to my bank and asked them to open a second bank account for me with a completely different account number. They told me no, they can't do it. They said if I form an LLC / Corporation then they will open a business account for me. But they won't allow a private individual to have a second separate bank account with a different account number.

I'm being told that I shouldn't put my property into an LLC until it has no more loan obligations (I probably won't be alive that long).

What should I do? I don't want my tenants to have my personal account and routing number. I don't think I want to form an LLC without putting a property under it. I was thinking I could just open another bank account at a different bank. Is that my best option?

Please let me know what you all think.

Mike Perry

Hi Tim,

I've been told in that situation cash for keys is the best solution. I would offer him $500. If that isn't enough, it's up to you if you want to go higher or just wait him out.

Mike

Megan - You can always talk to other lenders as well, try doing a Google search on down payment grants then approach lenders and ask them about it. It's worth a shot, right? =)

Michael Cohen - I second Megan's question, is there a way I can get the seller to cover more of the closing costs? If so, that would be awesome.

Megan again - The deal I'm looking at is about 1%, not 2.5% and it still seems like an ok deal. I wouldn't recommend dropping your offer that low based on the 1-2% guidelines. Seller will likely reject it and figure you are lowballing him. Also, I've been told by pretty much everybody in my local circle that is working with me that the 50% rule is pretty high for expenses. They often tell me 20-30%, including repairs and maintenance is more likely. Of course, I don't know for myself, that's just what they're telling me.

Mike

Hi Megan,

I am at the same spot you are. I just got my approval letter for $225,000 about 2 weeks ago, so I'm looking for a property.

I've decided to get a quadplex.

I have learned a few things so far. First, my real estate agent has turned me on to some kind of down payment grants. Apparently, you can get a grant that will cover up to 4% of the purchase price to cover the down payment. I have asked her a few times. "You mean I will never have to pay this back? It's not a loan?" She assured me it is a grant. So, I guess I will be using that. You should ask your agent about grants to cover the down payment. My approval letter actual says my buying power is based on the grant, so I know it's true. Also I have found information on Google about these grants. They do seem to exist.

The lender told me that because of the grant, my interest rate will be 5% instead of the 4% I normally could expect. Being that I'm a working stiff who only has a 401k account to borrow from to do this, I think one point of interest is worth it.

If this doesn't work out for you, you can get an FHA loan for 3.5% down payment. That being the case, you will have to live on the property for a minimum of one year.

I have been told that closing costs can be expected at 3% of the purchase price. I've also been told this does NOT include inspection and appraisal. I was told inspection and appraisal will cost me $500 each out of my pocket.

I live in Las Vegas, so these things might be different for you.

I am planning to use a Property Manager. I have already called a company and they quoted me $50 per month per door. So that's 3 units, $150 per month total.

Also, you will have to expect to pay PMI which insures the lender in case you default. You get ZERO benefit from this insurance, but you have to pay for it. Expect this insurance to cost about 1% of the purchase price per year. That's what I've read, it's not experience, I haven't yet been through this.

I've been told to expect utilities to cost about $100 per month. That's water, garbage and sewer I think.

I've read that Homeowner's Insurance and Landlord Insurance can be expected to be in the $200 per month range. I hope it's lower.

I hope this helps you and great luck to you.

Mike

Rick: Thanks for your reply. The neighborhood is already bad, I look at it more as providing a service. Good idea with the cameras.

Zack: There are cages you can buy and have installed that are specifically designed to protect vending machines and still allow them to be used easily.

Art: Thank you for the information. I have gotten with the city and found out I do need a business license to do that, they have a specific license for vending machine owners. They also told me that it would be allowed with the current zoning.

Deanna: I'll be blunt and honest with you. The entire neighborhood is already junky looking and there is already a lot of outside foot traffic from the residents of the entire street. They all like to simply "hang out" outside for some reason. My thought was to try to capitalize on that. I can only control these 4 units and there are probably 20 similar buildings on the same street that I can't control. I figure I can probably get $500 or more a month out of a soda vending machine without a whole lot of effort. All those residents walking up and down the street kibitzing with each other must get thirsty, especially in the Las Vegas heat.

Thanks for your responses, I am still welcoming anybody who has thoughts on my idea.

Hey Everybody,

So I'm thinking about buying a quadplex that's on a street with eight almost identical quads on each side of the street total. The outside wall of unit #1 faces the street. The street is not in walking distance to any convenience stores or shopping of any kind and it's a low income area. None of the other buildings on the street have vending machines on them. Several residents seem to enjoy hanging out outside along the street throughout the day.

My thought is to put a snack machine and a soda machine on the side wall of unit #1 of this property. By doing this, the machines would easily be visible to all the residents of almost the entire street. I'm thinking it could easily bring in hundreds each month. If I do this, I will get a cage installed around the machines to prevent vandalism and theft.

Do you all think this is a good idea? It's in Las Vegas, Nevada. Is anybody aware if it's legal to do this? I'm having some trouble finding any information about this, but it seems like a HUGE opportunity to me. I'm thinking since I would be the property owner, I should be allowed to have vending machines on my property, right?

Mike