All Forum Posts by: Kyle J.

There’s no standard Fannie/Freddie rules when it comes to HELOCs. HELOCs are just products of the individual lenders that offer them, so each lender can/does create their own rules.

The good news about that is, if one lender can’t do what you need them to do, simply call other lenders until you find one that can. 

If they won’t accept an offer of cash-for-keys, there’s really only one way to recover possession of a property from tenants who refuse to leave voluntarily. The new owner will need to file for eviction. 

@Keith Minick One of my rentals also has a mortgage with about 28k left on it. With that low of a balance, I’m guessing a very small portion of your payments (like mine) is actually still going towards interest. 

I just looked at my last statement and only about $90 of the monthly payment is going towards interest, and all the rest is going towards principal. So that’s one of the reasons I choose not to pay mine off. What would I do with an extra $90 per month?

As for the rest of the money going towards principal, I don’t really see that as increasing cash flow if I were to pay off the mortgage since I already have that money. If I were to pay it off, I’d just be taking that big chunk of money that I already have (liquid and readily accessible), and tying it up in the property where it’s not liquid or readily accessible and having to now wait for it to come back to me in small chunks (in the form of monthly rent payments). 

When I look at it that way, it’s just never made a lot of sense to pay it off. 

(Not to mention I can make a better return with the money by investing it than I can by paying off the mortgage which is at a fairly low interest rate.)

@Babu Ramadoss  This question comes up all the time, and often the best choice just comes down to a personal one based on things like: your individual goals, your level of comfort with debt, where you are in your investing career, etc. 

What I can tell you though is, if you're new to investing and are just getting started acquiring properties (and plan to keep acquiring them), having the larger payments associated with 15-year mortgages is going to impact your DTI ratio a lot more than the smaller payments of the 30-year mortgages. So you could find yourself with the ability to borrow less if all your mortgages are 15-year mortgages, especially early on when you're trying to fix-up/stabilize your properties and maybe there's not as much cash flow coming in. The larger debt payments are going to even further reduce that cash flow, and your borrowing power towards future properties.

If you're really dead-set on having your mortgages paid off in 15 years though, perhaps a good compromise would be to put them on 30-year mortgages but make extra principal payments as if they're 15-year mortgages. Those extra payments wouldn't be required, so you could stop anytime you needed/wanted to, and they wouldn't count towards your DTI ratio for future lending calculations.

Just something to consider.

Another option, if your wife’s income is enough to qualify on her own, is to just get a traditional mortgage based off her income. You don’t have to include yours (unless she doesn’t make enough to qualify on her own). 

My wife and I did that before when my wife had just started a new job. The loan officer said it’d just be easier to only use mine and there was no reason to include hers since we qualified without it.

(You both can still be on the title if you want.)

Anyway, just another option to consider. 

Chances are, the seller is not going to get the current tenants out prior to closing. In fact, if I had to guess, it’s probably why he’s selling (i.e. tenant is “between jobs due to COVID”, hence he probably can’t evict her).

In any event, as to why to do the estoppel, it’s to confirm the CURRENT terms of the tenancy. Sounds like things have changed since the lease agreement was originally signed and he’s now giving her some kind of rent discount (either $1100 due to her reduced  income or $1000 due to the inconvenience of the showings, it’s not clear).

Either way, assuming that was done verbally, the original lease wouldn’t reflect it. You’d need an estoppel to effectively get that info.

And yes, they could lie on an estoppel, but at least you’d be clear on what the CURRENT terms of the tenancy are as they alleged them to be, and then the buyer can make an informed decision on whether or not to proceed to closing.

And if you do close, you get to hold them to whatever they said on the estoppel because it’s presumed to be true AND binding on both the tenant and landlord. (Reference: Estoppel Certificates)

I see no reason not to get one. There’s no disadvantage for the buyer. 

Both the seller and the tenant sound a little “fuzzy” on the terms of the tenancy. I would request an estoppel certificate be completed to clarify exactly what the terms are, and the current rent amount is. Doesn’t seem like anyone knows ($1,100 vs $1,700 for rent would make a big difference).

@T. Harris  Yes, according to the interest tracing rules, you'd deduct the interest against rental property 2.  

Absent any proof that the renter caused this damage, or language in the lease that makes the tenants responsible for these types of repairs, I (as the landlord) would pay for this.  (I actually have paid for this before the one time I had a rental broken into when the tenants weren't home.)  It sucks, but it's just the cost of doing business.  

If you truly have a suspicion that the tenant is responsible, have them provide you with a copy of the police report.  If it was really a burglary, surely they would want to make a police report.  If they refuse to make one, that would be pretty telling.

Just my two cents.  Others may have different opinions/ideas.

Brent - I'd suggest starting a new post or emailing support @ biggerpockets.com.  I'm guessing they just might not be seeing your posts under this 5 year old thread.  However, I am also experiencing what you are describing.  I no longer get any forum alerts whatsoever.  I emailed BP Support about it and they were very responsive.  They couldn't fix it, and I still don't get them (and haven't for months), but they were very responsive (same day response, sometimes as quick as a few minutes).  

So give them a shot.  Perhaps they'll be able to fix it for you (or figure out what the larger issue is and fix it for all of us).