All Forum Posts by: Seth M.

Originally posted by @Roy N.:

@Seth M.

Not sure if it would be the same in the U.S.A., but here if your tenant is active duty, you take the judgement to the military and they will garnish his wages.

Same deal here, according to my lawyer it is relatively easy to garnish military wages. My concern, the only tenant with income is responsible for child support on an already low wage. From his perspective bankruptcy would look appealing...I assume.

Originally posted by @Account Closed:

Go to court get the Judgment.  Most people don't realize that a Judgement is good for several years.  When it is time to expire, you can renew the Judgment.  Therefore, one day, this judgment will haunt them, and you have a chance of collecting your money.  You can also turn them over to a collection agency.  I did and 11 years later received my Judgment in full.  (Less the cost to the Collection Agency)  Also damages can be written off at the end of the year if not paid.  So it's not a total loss.  But I have to admit, you sure did take a loss that's for sure!

Nancy Neville

 Good to hear Judgements can be renewed when necessary. It was a big loss. 11 years is a long time to wait, but much better than never recouping cost. I do expect a nice tax return this year!

What happens if a person with a judgement against them files for bankruptcy?

In November of 2014 we had the wife of a husband-wife tenant pair inform our property manager she would be moving out. She included a letter signed by her husband stating he assumed all liability for the property. The following month rent never came. When the property manager followed up with the husband he said he had moved out and wouldn't be paying rent anymore (5 months left on lease @1250/month).

Our property manager filed an eviction notice with the court, gave the tenants required time to collect belonging before taking the unit back. 

We were left with over $15k worth of damage and unpaid rent before the unit could be rented again. I compiled all paperwork in the case and hired a property lawyer to take the case to court and receive a judgement against the tenants. Because the tenant is active duty military it is a lengthy process leading up to the court date due to VA law requiring ample notification time through a Guardian Ad Litum.

The court date is set for July 13. If the tenant shows up a trial date is set. If he doesn't the judgment is in my favor on that date.

I'm concerned after I receive the judgment for the damages I still won't receive the money this has cost me, not to mention the addition of the legal fees. Although the judgement will be against both the husband and wife they are now separated with the husband paying child support (x2) and the wife a full time student. 

Has anyone been in a similar situation with a favorable result? Any advice? 

Originally posted by @Paulo Gama:

Hello BP community.

I am looking into single family homes in my area to purchase, then rent (investment).  The reason being the great schools and very low availability of home rentals in this area. Can folks give me positive and negatives between two and three bedroom houses?

I am trying to establish which home will be more desirable to rent based on bedroom count.

Thanks in advance for your help.

 Regarding rental income a 3 bedroom unit will no doubt command higher rent, but...the ease of finding potential renters at each size depends on your regional demand. We have a few rentals near a university in Northern MN. Rent is $400/bedroom for 2-4 bedroom homes rented to students. Cash flow is higher for a 3 bedroom vice 2. When you reach 5 bedrooms the per-room rate drops and turnover becomes slower, negating cash flow gains. 

Two questions we answered before purchasing:

-What size has shortest turnover (we discussed with local property mgr)

-Who are desired renters (college students, families)

By catering to your desired renter base you'll be better armed to evaluate available properties. Ultimately, I'd look at both and let cash flow make my decision.

Originally posted by @Freddy Pettiford:

@Jonathan Taylor SmithCheck this article out. I think it answers your question in good detail. 

http://www.veteransunited.com/valoans/second-tier-entitlement/

The article is right on. It describes my scenario exactly. I received a benefit entitlement letter from the VA before purchase of our second VA home.

I agree. By using the VA loan you are confirming you are purchasing a primary residence and plan to live there for at least a year. Military orders trump this, buyers remorse does not. I've used the VA loan twice. I still own both properties, one as a primary residence, one as a rental.

I believe you sign paperwork at closing stating you will live in the property for at least 12 months. You risk a legal claim by your lender if you move out early, if they choose to follow up. This may be unlikely but is a risk.

I appreciate the advice. Encouraging to see similar suggestions from both of you. Because we're comfortable with the area I like the 3 property route. As a bonus, it leads to a huge ROI down the road as the mortgages are paid down.

The biggest challenge I see will be securing 3 additional mortgages. The larger companies seem to cap investment mortgages at 5 or 6 properties per person. 

Are there mortgage lenders out there willing to offer loans to people with 7-8 mortgages on their name? I'm comfortable with standard home loans and would prefer to go that route as our portfolio expands, but am finding it to be more and more difficult.

Thanks again for the advice.

My wife and I own 4 rental properties titled in our names. All were financed using 30 year banks loans with 20% down. 

2 were past residences (VA Beach and Southern MN), 2 were purchased as rentals (Northern MN). All are 3-4 bedroom single family homes.

We intend to purchase future properties in Northern MN, focusing on the student market. Purchase price range is $120k-$160k for the low maintenance 3-4 bedroom homes in the area.

With the sale of our primary residence in CA next summer we expect to have $140k to invest in additional rental property.

I'm looking for opinions regarding the following questions:

1) Better to pay cash for 1 home or 1/3 down on 3?

2) Knowing our current rentals are mortgaged under our names would it be smart to put new properties in a trust from the start or continue under our own name?

Additional notes - our current student rentals in the area consistently cash flow $350/month including all expenses. Not breathtaking based on the high purchase price (>$100k), but consistent with a strong tenant pool.

This is my first non-introductory post on BP. I'm a big fan of the BP podcast and am excited to join the forums!

Hello BP community. I'm 32 years old. My wife and I live in Southern California, but are from the Midwest originally. We own 4 rental properties. 2 bought as investments and 2 purchased originally as primary residences. All are financed through 30 year fixed rate loans. We plan to expand our rental property soon. Our desired end state is early retirement made possible by 10-12 rental properties. Although living in CA we plan to focus our rental properties in Northern Minnesota. 3 of 4 rentals are there now. The lone albatross is located in VA, a leftover from a past primary residence. As our number of homes grows I'm becoming very interested in LLCs and creative financing strategies. I was excited to find the Bigger Pockets blog, enjoy listening to the podcasts and am looking forward to learning and participating in the forums!