All Forum Posts by: Paul De Luca

To @John Warren's point, it can be advantageous to fill a vacancy in the winter because there is less competition so there's a better opportunity to stand out.

I believe that is mortgage fraud if you do not live in the property for the minimum required amount of time, specifically "occupancy fraud". 

Investopedia defines occupancy fraud as a scheme used by investors to qualify for higher loan-to-value ratios and lower out-of-pocket costs on purchases, in addition to lower mortgage rates. Occupancy fraud occurs when a borrower claims that the home will be owner-occupied to obtain favorable bank status when the property will actually remain vacant.

Educate yourself as much as possible about flipping/real estate investing. Read all the books, listen to the podcasts, and try to find a mentor. Find a flipper in your area that can show you the ropes. Provide some sort of value to them and take it from there.

The property must be used as a principal residence for at least one year. If there is more than one borrower listed on the mortgage, FHA requires at least one to satisfy the occupancy requirement.

@Serge Sefekme

I don't know any agents in your market so I recommend making a forum post in your market (VA/MD/DC) saying you are looking for an investor-friendly realtor.

Good luck!

Hey Serge,

Congrats on beginning your journey! I would recommend you start investing by house hacking a 2-4 unit property. Look to get connected with an investor-friendly agent in your market to get the ball rolling.

What information are you looking for specifically? https://www.census.gov/data/ta... and https://www.census.gov/data.ht... .

Also, try the Bureau of Labor Statistics https://www.bls.gov/

Looks like a good deal, although I'd make your vacancy rate somewhere between 5-10%. Your loan interest rate also seems a little high at 4%, given that many rates are far below that at this time. But, it still cashflows well at 4% so if you get a lower rate the additional cashflow will be gravy. Not sure of your credit score or financials but you may be able to get a more attractive rate. Your should talk to your lender for more info.

I assume the property is already in good condition since you're budgeting $114/mo (3% of Monthly Gross Rent). If it's not in the best condition I'd recommend bumping that up to 4-5%. I also noticed that you did not budget any utility expenses for this property, so I'm assuming that the water expense will be covered by the HOA expense and the tenant will pay electric and gas.

Good luck!

Hi Athita,

If your offer gets accepted, you or your attorney should request all tenant leases and the rent roll for the property. You should also request bank statements to verify that the landlord has in fact been collecting the rent amounts specified in the lease and on the rent roll. If they are unable or unwilling to provide the information, I would consider that a red flag. 

I always recommend that buyers get an inspection of the property, whether it's sold as-is or not. It will give you insight of the overall condition of the property and repairs that should be addressed ASAP. Some things noted in the inspection report will be items that you should keep an eye on for future reference or homecare. Unless it's a FSBO (For Sale By Owner), you will likely be communicating with the listing agent, which your agent should be doing for you.

If you have the opportunity, talk to the tenants to gauge their overall experience in the property. Do they have a good relationship with their landlord? Is the landlord prompt about making repairs, or is there a bunch of deferred maintenance? If the tenants don't have anything nice to say about their landlord, their relationship could be strained. Sometimes landlords sell to get away from bad tenants. 

Congrats Caleb! How many bedrooms are you renting out, and how did you find your tenants?