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All Forum Posts by: Rumen Mladenov

Rumen Mladenov has started 5 posts and replied 238 times.

Post: New member from Delaware

Rumen MladenovPosted
  • Investor
  • Newark, DE
  • Posts 245
  • Votes 198

Hey @Brenda C.!

If I were you I would consider these my options, from best to worst:

1) Stay there and rent out a couple of bedrooms to friends who are not going to drive you crazy. Not everyone's cup of tea, but worked great for me;

2) Rent it out. You should make enough to cover the mortgage, taxes, insurance and repairs judging by the numbers, although you will probably not have much cash flow and vacancies are going to be hard on you.

3) Sell it. Even if you miraculously sell it for what you paid, you would lose $9 k realtor commissions and a couple of thousand in transfer taxes.

I agree that values are not going to go up anytime soon, but if you hold it long enough, you will pay off the mortgage and it will be yours. That is how I see all of my rentals - I do not much care what they are worth at the moment, all I care about is that my tenants make my mortgage payments, and in 30 years (or 15, depending on the mortgage term) I will have a paid off asset that brings me solid cash flow every month.

Post: Wholesaler looking for Mentor in DE/MD

Rumen MladenovPosted
  • Investor
  • Newark, DE
  • Posts 245
  • Votes 198

@James Stockton I am local, and I have some rental rehab experience. Good luck with your plan, though I should warn you that New Castle County is somewhat saturated with wholesalers. I am sure you see the "We buy houses fast!" bandit signs at every intersection, if you look at real estate for sale section in the local Craigslist 9 out of 10 ads are "We buy houses!", and I keep getting yellow letters and cards for my own rentals. Let me know if there is anything I can do to help.

Post: Not sure if I bit off more than I can chew this time?

Rumen MladenovPosted
  • Investor
  • Newark, DE
  • Posts 245
  • Votes 198

@Bridget D. how did it go? I am a landlord in nearby Newark, and I have not used granite in any of my rentals. I can replace a damage laminate countertop for under $200 myself, while damaged granite would cost $1,000+ and need professional repair/installation.

Post: Delaware?

Rumen MladenovPosted
  • Investor
  • Newark, DE
  • Posts 245
  • Votes 198

@Dottie Bee Rehab was finished yesterday, tenants are scheduled to move in this weekend. Not sure how they plan to do it in the snowstorm, but that is what they said... I will be happy to share the numbers at the meeting.

@Jeffrey Giffin I also vote for Newark or Middletown location, but if Wilmington works better for the others it will work for me too.

Post: Maxing out at 10 loans, what to do next

Rumen MladenovPosted
  • Investor
  • Newark, DE
  • Posts 245
  • Votes 198

@Joe Kim I am in the same boat, hit the 10 financed properties limit. I also have some sub-70 k mortgages, but they are fixed at a great rate and I would rather not touch them. I pay down HELOCs as fast as I can, and then pull money out to buy the next property. If I am short, I use credit card promo checks (like 0% for 12 months) to cover the difference, and then pay them off before the promo rate expires.

Meanwhile, I keep looking around for loan options. B2R seemed like a good idea, but the requirement to set up an LLC and get higher insurance coverage seemed like too much hassle. I saw a credit union booth at a local ice cream fair last summer, and asked them about loans for investment properties. The manager at the booth said they do not offer them, but they would consider doing that in the future, so we exchanged info. They consulted with me on how to structure the loan terms so it would be acceptable to me, and I have an application with them already to get a loan on a property I own outright. That was maybe the 50th lender I approached since hitting the limit, so don't give up!

Post: Rental #16 under contract!

Rumen MladenovPosted
  • Investor
  • Newark, DE
  • Posts 245
  • Votes 198

Congratulations @Dawn Anastasi! And yes, why 16? I set my goal at 10, and once I reached it I set my next one at 20 - how did you arrive at 16?

Post: How many of you are charging application fees?

Rumen MladenovPosted
  • Investor
  • Newark, DE
  • Posts 245
  • Votes 198

I do not charge an application fee. If two similar properties in the same neighborhood are available and one charges application fee while the other does not, where do you think a strong applicant would apply first?

Post: Keep on fighting or give up?

Rumen MladenovPosted
  • Investor
  • Newark, DE
  • Posts 245
  • Votes 198

Final update on this case - the former tenant agreed to my settlement offer, and just paid the $350 I asked for. I will notify the court to have the case dismissed.

The property has been fixed up and re-rented, no problems so far from the new tenants.

Happy new year, and much success in 2016!

Post: Debt to Income Ratio for investment properties

Rumen MladenovPosted
  • Investor
  • Newark, DE
  • Posts 245
  • Votes 198

@Mike Wood, I gave a simplified example. I actually have a W2 job that is more than enough to cover my living expenses. If my W2 income is $5 k a month and my primary residence mortgage is $1,000, that would leave my DTI at $6,000/$12,500 = 48% - still an unacceptable risk for most of the banks I approached...

When I had my W2 income and only one or two rentals, I had no problem getting approved for loans. I was a newbie, I did not know how to screen or evict tenants properly, and my tax returns showed loss after depreciation. Then I added a bunch of cash flowing rentals over the years and established a proven track record via tax returns, and suddenly I became unacceptable risk for the bank due to DTI.

Post: Debt to Income Ratio for investment properties

Rumen MladenovPosted
  • Investor
  • Newark, DE
  • Posts 245
  • Votes 198

What I find confusing about DTI is the way they calculate it. If you have 10 rental properties with $1,000 rent from each and $500 mortgage payments each, and the bank counts 75% of the rental income, the DTI would be $5,000/$7,500 = 66.6%.

Something seems inherently wrong with this metric if a solid rental portfolio that provides positive cash flow even after depreciation falls into the "unacceptable risk" category.