All Forum Posts by: Cheryl C.

Timely subject. Jason Watson and Joel Owens, can either of you expound on the type of activities that "count" toward the 500 hours? I believe that the IRS does not allow time spent on bill paying or accounting activities . It's also my understanding that travel time to a rental does not count. Am I correct?

Also, does time spent looking for and analyzing potential acquisitions count? How about time spent on here learning stuff???

Thanks guys. I had a feeling it was about the amount of work involved. I'm going to try Citi and some others. Jeez, I miss no doc!

In 2011 I had no problem on a refi of my primary despite having over 20 rentals. I am trying to refi again and running into roadblocks. Does anyone know the fannie/freddie guidelines on this? I'm not concerned about DTI, reserves, etc. - just whether any of the mortgage limits apply to your personal residence. In the past it didn't matter - you could always refi your primary (if you qualified). Any one have info on this? I could go down a point or more at no cost if I can find a lender.

BS Econ - IVY (was also captain of IVY Champ team all 4 yrs - now in Athletic Hall of fame and still hold a lot of records).

JD

No others lawyers here????

Childhood - cut lawns, shoveled snow, baby-sat, cleaned and painted my mom's apt. houses, had a bait stand at the lake (to make gas money for the boat and water-skiing), lied about my age at 15 to get a cashier job for 30hrs/week in high school, had a full-time summer job and worked another 30 hrs all through college. Worked full-time and went to law school at night.

Well, you definitely need to know the lease terms for the other unit and view it (ask tenants if everything is working, etc.). I'd get estimates for a new roof and exterior painting (also fix-up of other unit, if need be). How old is the septic system? I got burned on one a few years ago and it cost me over 3K to put in a new tank (mine was ancient and had collapsed on itself). That was not an item I could put-off. Do the units have circuit breakers? Use your estimates as negotoiating tools.

If things are still the same in Upstate NY, you won't be looking at much appreciation. How is rental demand in the "sticks"? If fair market rent is $500 per side, then you are looking at 1K income per month less piti, reserves, etc.

I'd start at what you think is the right price and then deduct the deferred maintenance items (roof, painting, etc.). Once you agree on a price (as low as you can) then you negotiate the financing. There are alot of great things about owner financing. In fact, you would have no chance of buying this place without it. If you have paid on time for 4yrs, they should feel pretty good about you as a credit risk. I assume your credit report is good? Owner financing will save you a lot of closing costs (bank fee's, etc). Do get owner's title insurance and, probably, a good inspection. Older people are sometimes reluctant to carrying the financing for more than a few years. I'd ask for 30yrs at 4% and take it from there. They may want a balloon earlier (3, 7, 10yrs). You need to educate them on the benefits to them of a long-term, safe, stream of income to get the longest term possible. In they insist on a balloon, still have it amortize over 30yrs to keep your payment down and build up reserves. I wouldn't agree to a balloon of less than 7 yrs - preferrably 10. Do you at least have an emergency fund or line of credit available in case something goes bad (eviction, major repair, etc.).

Hi Elizabeth! I'm from Ithaca (long since removed). We used to refer to Slaterville as "the sticks"! What are the numbers as far as rents, taxes, etc. Does the LL pay utilities or is it separately metered? I've bought many properties with owner financing over the years. Why do they want to sell? Do they need the cash or are they looking for a stress-free stream of income. Perhaps they are leaving the area? Since they are not paying a commission, they can finance the whole thing without having to bring money to the table. I'd ask for as long a term as possible and as low a rate as you can get. It's up to you to determine the value. This can be done by looking at comps (if any exist) or looking at rents vs expenses. It seems that they have taken care of a number of expensive items. Is there any delayed maintenance? Roof, etc. Expensive items that may come up soon? Give us the numbers.

Rather than have a bunch of different contingencies, I'd just put in a 30 day "feasibility study period"... you can find the purchase not feasible for any reason or no reason. I agree on using the local Board of Realtors contract.

Jon Holdman, I think you misread James Crow's post. He appears to have a deal with the heirs on an estate sale. Their uncle is the executor and wants to run the contract by the estate attorney.

James, I don't think I would give the guy a problem over a $500 deposit (paid to an escrow agent) but I will say that attorneys are known to be deal killer's. I had someone back out based on "attorney review" and the stated reason was "price"! Price is not the purpose of legal review, imo. Anyway, I'd shoot the attorney a copy and state that you would be happy to discuss any of the provisions with him. I doubt that the uncle will back off his request.

Don Konipol, I went way out on a number of limbs early on. You have to if you don't have any money!

Jon Klaus, I like the plan. I've had one since I was in my late 20's.

I had to explain the concept of "leverage" to a friend recently.

Check the financials and reserves. Make sure there is no special assesment coming your way. Is there a limit on rentals or any other nonsense coming up. I once owed I of 8 and could have bought all of them over 4 yrs. Sounds like the condo fee may be too low. I bought one in FL and got hit with about 20k in a special assesments within a year. How may are investor owned as this can limit financing options ( consider resale). Is there a recent engineering study that talks about reserves. I always ask about delinquent fees and owner vs. renter ratio.