All Forum Posts by: Heath S.

@Jon Holdman So basically the 2% rule doesn't apply unless you are buying a house at 25K?  It seems to be a major guideline used on this site to help people gauge a rental, I know its used as a ''loose guideline'' but maybe it shouldn't be a guideline.

@Michele Fischer A couple of my properties are in Metro Detroit and I still don't even get close to 2%.  Maybe a home in the ghetto with section 8 housing can meet the criteria?  

Thanks for the feedback though, both of you.  And if anyone finds a 2% property in AZ let me know!!

I have a few rental properties as of now and I am looking to purchase another one in the near future.  However since I became a member of BP I have read a lot about the 2% rule and out of my 5 rentals, not one of them meets that rule and I have not come across anything that looks to meet that criteria.  I am in the Phoenix Market and would love for someone to show me a property that rents for 2% of the price.  I always looked at cash on cash and tried to hit 20% return on cash, but I am interested to hear any examples of homes that people have bought or any that they know of for sale that meet the 2% rule.

Please don't tell me about the house that you bought for 35K in 2010 or 2011 that rents for $700.  I am more looking for examples in todays market.  

Thanks!!!

I would replice them even thouw u are in the historik distract.

@Joel Petersen 

 I agree with @Bob E. just find a cheap broker to hang your license with and make sure that you are being ethical about your deal, but I wouldn't necessarily try to find a mentor within that brokerage. I use DPR Realty as my broker. Its $25/month, $350 per transaction and around $300 annually for E&O Insurance. They have good support and a lot of agents, so you may be able to find someone doing flips with them.

@Martin Scherer Yes, lending is that strict. It has actually loosened up recently. How many properties do you own? If you have more than 4, a lot of lenders won't do it. Some will go up to 10 financed proerties through fannie mae. Are you still getting a W-2 and paystubs through the HOA that you work for?

I agree with @James Wise 

I have had the same situation come up and if they are paying the rent, I don't really care as long as he isn't causing problems.

@Dennis Nemitz 

I would go with the 20% down unless you want to spend the extra 5% to have a lower monthly payment.  As far as returns on the property, you will have a better cash on cash return with less money down.  And I would consult an accountant, but I'm pretty sure that either method would allow you to write off the interest and depreciation on the property as an investment property.  You would also be able to write off any furniture and housewares that you purchase for the property over a period of time (I think 5 years).  The distinction of 2nd home(vacation house) vs investment property is simply a distinction that the mortgage lender needs to make to qualify you.  An investment property has more strict guidelines, therefore you need a larger down payment. 

Hope that helps!

@Joel Petersen  Hi Joel, I am an agent in phoenix and can recommend my broker. I pay $25/month and roughly $300 per transaction.  It works great because I mainly use my license for personal reasons as well so it's low cost and they have good support.  Let me know if you have questions. 

@Bob E. 

 I am from GPP myself.  And great advice on finding the sellers that are looking to get out of the landlord business.  I have started digging into portfolio lenders and did find some that will do up to 10 properties, however they need 30% down.  I am looking in Tempe mainly for my rentals, so that usually means 200K price point or higher.  Are you finding any good cash flowing rentals in other parts of the valley?  

@Brian Gibbons Pistons and Lions, my friend.  Arizona teams take a second to the home town teams!

@Camronn W. Just take the property out of the LLC and put it back in after you do the refi. The bank may say something if title changes just prior to your application so I would run it by the banker prior to taking out of the LLC, but this option may work.