All Forum Posts by: Mike Day

Hey all. The last time I bought a house in LA was 2011, when deals were everywhere, and now I’m thinking of giving it another whirl. Is there anyone flipping there right now? How hard is it to find deals under these market conditions? What profit margin is reasonable? Any other hints? Thanks so much.

Hi all. So I was just getting my jollies by reviewing my escrow statements today, and I noticed I'm being charged each month for PMI, even though I put 20% down. I understand you can write to your lender and request they take it off once you reach 80% equity, and I'm going to do that. I had no idea until now this loan had PMI on it - is it even legal for them to do this when you put 20% down?? I never agreed to this, unless they snuck it into some fine print I signed at closing.

@Shawn Holsapple

Do you have a particular local lender to recommend? :)

Your situation is pretty complex, but after reading your post a few times I think I understand the question. So basically you have a property that you are currently living in that you have a HELOC on, and the bank is going to force you to close the HELOC once you convert it to an investment property, and you want to retain access to the ability to take out funds whenever you want without doing a conventional refi - is that right? My first question is, how is the bank going to know that it's now an investment property? I don't think the bank is going to raise a ruckus about a loan that's paid fully and on time. Also, some banks will do HELOCs on investment properties. If you make enough phone calls, you'll probably find one. Does that help?

Thanks to all for the replies. I personally like to keep myself pretty highly leveraged and am comfortable with that, so it looks like I'll be turning to a portfolio lender once I get a few more properties. Time to make some phone calls!

Hi all. So I currently am holding a single rental property and am planning on financing 2-3 more in the near future. This means I will hit the limit of 4, after which most banks will not issue more loans (even though Fannie Mae allows up to 10). I wanted to survey the community to find out what other investors have done for property number 5 and up. Right now the most likely path appears to be finding a local portfolio lender to do the loans, or refinancing several properties together into a commercial loan to reduce the number of loans down below 4 and getting another conventional loan. How have other people dealt with this? Does anybody know of a national lender that will do 5-10 properties? Thanks!

Or take out the gas stove and put in an electric one. Or redo the lease when it comes up so that tenants pay utilities. I'd assume it's going to be this way year after year unless you take some action.

Hmm, I'm in Indy and have a different perspective. Renting out a house valued around $60-$70k and renting it out for $700 sounds reasonable. The part that I'd exercise great caution about and would not recommend for a first-time investor is an out-of-town rehab. Too many things are out of your control and there's too much potential for you to get ripped off. If I were you, I'd get a good real estate agent, have them help you assemble a list of investment properties that you can immediately rent out without repairs (doable in this price range), fly out and take a look. Neighborhoods vary from block to block here. If you want to know if it's trash or treasure, you have to see it for yourself. A $700 rental house is not necessarily in a slum.

Hi John. I'm going to send you a PM in a minute. :)

People always say seek out a legal expert, etc., etc., and I also think it's a good idea, but I'll try to give you some hints based on my experience and research. Insurance and entities such as LLCs are two different layers of defenses. If your insurance doesn't come through for you, you have the protection of the entity you set up to fall back on. If you do things properly, the LLC's business is the LLC's business and you can't be held personally liable if, say, a tenant slips and falls on the property. As your net worth increases it becomes more critical to have that kind of protection, as you have more to lose and are frankly a more attractive target for people who might try to sue you, frivolously or not. Personally I think you should have at least $300k in liability coverage, and consider getting umbrella coverage on top of that.