All Forum Posts by: Mike Hanneman

I would look to find other lenders as you only checked two. Find some portfolio lenders. Good advise from above.

I would try to wait paying for cash as all your capital will be tied up in only one property.

I believe you are correct that there can be more money to be made. There is still compitition though as there is whenever there is money to be made. However, Vacation rentals require more time, more capital to get started, ( needs to be furnished ), plus usually the places that do well with vacation rentals are in higher priced areas.

Depending on the area you are looking it could be more risky, vacations are usually the first place where the average american cuts their budget during tough times.

As long as your new appraisial meets the banks guidlines then yes PMI will be taken off. You need to mask and check with your preferred lender as some banks can require more equity then the standard 20%.

Remember you'll have to pay closing costs on the loan so figure that in to your numbers or pay it out of pocket.

Removing PMI is a smart decision it's money that does nothing for you. All though your's is not that much, I have seen alot higher from other people here.

Prime first to save money on paint. Primer is cheaper and if the blaocks aren't painted already they will really soak up the paint. A sealer primer is what you will want to use first. Then you can use your standard exterior paint. Go to one of the big box stores or you'll be paying more. Behr and Valspar are rated just as high as all the other paints with their own stores.

Look into a CPA first/also. They will be able to steer you in the right direction. It will probably be cheaper too.

@Dave Visaya just a question, but do you ever contribute anything meaningful in any of your posts?

@Christina Harris

@Christina Harris As for renovations, you need to see what the comparables for rentals in your area are? Most of the time a person can convert their home to a rental with ease. Rentals aren't like selling where you want everything as close to perfect to fetch top dollar. With rentals you want the stuff that can cause problems, either liability or with future maintenance issues resolved without spending too much but still doing it right.   

The first step to renting out a house is learning your state landlord/tenant laws and making sure you can comply. Then getting your system/process in order. You should look into reading some books about being a landlord before just jumping in. Most books on the matter shouldn't take oyu more then a few days to a week to read.

If I was in your shoes I would be actively shopping for another property. When I find the property I was looking for and have it under contract I would then do a cash out for my down payment but not till then so I'm not giving my bank money for no reason. You will have plenty of time to do this as closing takes a bit. I know because I have done this a couple times now.

It depends on your risk level and the assets you already have. If you have a large nest egg then yes I would get an LLC. However, even with an LLC I would still carry umbrella insurance to protect against any liability against you. All an LLC does is limit the amount the party the sues you can get to, so you still need umbrella insurance. Also an LLC does not protect you if you go and do something stupid, i.e. drunk driving and hit someone, they can get to anything that you have LLC or not.

If you are going to be using a lot of leverage with the property then don't put it in an LLC yet, mainly because you will not get as good of financing terms. Just an umbrella policy will do.

But you should talk to an attorney as this is just info on the internet.

Now is the time to start doing your due diligence. Check title and see what liens are in place if any and all other $$$ owed. You have the hard part taken care of, getting the owner to agree to the deal. Now it's on you to do your part to make sure you won't end up paying more then you intended.

Steve Vaughan so true. As good and as fast as leverage makes you money, it can take it away twice as fast. Still have to be smart, not everyone can invest on an island with so few limited land.