All Forum Posts by: Nathan Seltzer

I love Dave Ramsey and these replies have really impressed me with their depth of understanding. Having your fridge and washing machine on a 22% credit card is bad. Having a 30-year fixed loan at 3.25% on a property generating substantial positive cash flow is good. 

Which type of person is Dave trying to reach? I doubt he would tell successful real estate investors to stop utilizing debt, and they shouldn't tell someone with car payments of 40% of their monthly income to go take out a loan.

@Felipe Ocampo I am new to investing but an old hand in dealing with people trying to con me (I'm a car salesman and craigslist veteran). Her response is evasive and inconsistent, which are both flags that she is not dealing with you in good faith. Ask yourself: 

• Why is she asking if her son can do the application if she's being truthful when she says she is financially capable? 
• Why would it be easier for her son to do the application from another state, if she herself is in your state and she's going to be the one responsible and living there full time?

I would pass. But I'm not experienced in this!

@Greg Jeanfreau Well said! I'm about to make my first rental purchase in Texas and here you can withhold the tenants deposit if they don't give you 30 days heads up (assuming its in the lease). My planned policy is to base rent increases on a few factors:

• What is the market doing? What are comps renting for?
• What are my expenses doing? If expenses are flat, I can afford to be more flexible with rent.
• How good is the tenant? Does he pay rent on time, pester me with small issues (or worse, fail to report big issues), take care of the property, get complaints, etc? If he is a good tenant, I save money and hassle by freezing his rent or pacing it slightly beneath the market.
• Do I plan to sell soon? If so, I need higher rents to justify a higher sale price based on cap rates.

Am I missing anything? This is just my thinking going in.

@Tyler Roicki I'm trying to get advice on what the best thing to do is from multiple sources. Of course I already spoke to my agent about this and I do fully understand what the option period is. I'm asking here because I want additional opinions.

@Simon Castillo Its tough to estimate repairs because the problems could have multiple causes. It definitely has pest issues, which we will address, as well as sealing up entry points, etc. I'm going to be doing a lot of the structural work myself, like fixing window and door frames, etc. I think we will spend about $3000 initially and another $5000-7000 over the next year fixing everything else and rectifying the AC issue. Don't know for sure.

The seller won't repair anything besides the roof. It cash flows well at this price, even without increasing the rent to match the market. I don't trust my gut because I don't have any experience.

I really appreciate your replies.

Greetings! My wife and I are about to purchase our first property and I wanted some advice from the internet.

Our plan is to purchase a duplex and live in one side while renting the other side, which will almost cover our mortgage.

It is currently a big time sellers market so our options are limited, as is our negotiating power. We currently have a property under option that has a few major concerns.

1. The price is rather steep for this property at $165,000. The units are a 2/2 ~900 sq.ft. and a 3/2 ~1200 sq.ft. Rent at the moment is 1625/month for both units combined. This is below market, and market rent is approximately $1850/month.
2. The property is very run down and the inspection showed it needs a lot of work. Mostly minor things, but a number of serious things, including significant wiring problems that could be safety problems, undulated siding all over, sediment in cold side water connector, HVAC not cooling sufficiently (return vs supply temp). The roof is being replaced by the owner's insurance company, due to storm damage.
3. There are tenants in leases in both sides. For us to get a 20% down conventional loan, our lender is requiring us to move in within 60 days, so we will have to buy out a tenant from his lease, or else put down 25% and increase our interest rate by 1%. No guarantees we can get a tenant to move.

After the inspection, we asked for $5000 towards closing in addition to the roof replacement. Does this seem like a good idea to you if they accept our amendment? We're out $650 in earnest money and the inspection if we pull out now, which isn't all that much, compared to getting a bad deal.