All Forum Posts by: Susan Maneck

You still have to earn enough to cover the mortgage. Not more than 41% of your income should go towards it. Part of the problem is where you live. Property is so expensive in Southern California. For 35K you could buy a house free and clear in Mississippi.

My advice is to go for a FHA loan. To get that you will need to live in the complex, but they will count the other units being rented out when they figure whether you can afford the payments. Also, if one of your parents is still alive they can co-sign for the loan. They are called Kiddie-condo loans and intended for college students like yourself. And no, it doesn't have to be a condo. http://www.mortgage101.com/article/fha-kiddie-condo-loans-first-homes-young-adults

I think most of your rentals were in the 39204 area which is much more depressed that the houses I own  in 39212. I own five rental properties in the neighborhood where I myself live and most of the houses are still owner-occupant. Before the recession you could count the number of houses that were rentals on one hand. But too many bought houses right after Hurricane Katrina at the top of the market, and almost all of these lost their house. As you know I'm a Jackson State Prof. and if I could add one course to our general education curriculum it would be a course in home economics with the emphasis on economics. Too many people down here don't understand how money works.  

I talked to a real estate lawyer about this a couple of years ago. He told me that it is actually illegal for local bank to deny a loan to an owner-occupant because it is for too little.  This is considered red-lining. They can deny us investors all they want, but not an owner-occupant. And it has to be a local bank. Wells Fargo, Bank America, etc. don't operate under the same constraints. 

Nope, but there is a little known program that could help this happen. We are all familiar with Section 8 vouchers but how many of us know that there is a program that could turn these tenants into homeowners? In 2000, a rule was approved for a Homeownership Voucher Program to allow recipients of Housing Choice Vouchers to instead receive assistance with a mortgage and other homeownership costs. Obviously this would be cheaper for the government because as you mention, once the down payment is made, they only have to make monthly payments of $450 rather than $750. However, usage of the program has been minimal. As of Dec 25, 2015 only 20,965 houses had closed as a result of the policy. My son did a study of this program as it applied to Jackson, MS. He found that the reason this program was so little utilized is that there was no one in the HUD office who knew how to deal with the banks. Of course these are not people with good credit so it is easy to see why the banks are reluctant to deal with them, but given the fact their mortgage payments are supplemented by the government, they really don't have that much lose. If the people default they are likely to lose their housing assistance permanently, it seems to me they would be less likely to default. But someone has to advocate for them.

Using a Real Estate attorney is another possibility, at least in Mississippi. I have done some closes without a Title Company, but never without Title Insurance.

 I see you are picking the higher-priced areas of in the Metro area. They have always been to pricey for me. The areas where I invest in South Jackson are much more labor intensive. but bring a better return on dollars spent. You might consider NE Jackson which is somewhere in between the two. 

 Oh, this is income tax, not property taxes? 

Is that considered a lot? I'm paying as much as $1700 a year in taxes for houses I paid 35K for. 

One thing I notice about inherited tenants good or bad, is that the rent is usually way below market value. Typically they have lived there for years often without any increase.