All Forum Posts by: Account Closed

@Simcha Davidman

I do plan to do the leasing and property management aspect on my own. I think it would be a good and healthy learning experience for me until I am comfortable hiring a company to do that for me.

Although I do not believe those numbers are the best or greatest I can get, I am comfortable with that for now. I am hoping to maintain profit (or I wouldn't) be doing this but I also believe that this property is a great learning opportunity as well.

Regarding the emergency fund. I am not sure how I feel about that yet, so I have played it safe by having the reserves I currently do. I think it will ease my anxiety until I feel comfortable with investing and things begin to go as smoothly as possible. I'm in this for the long haul so no matter what happens it will be a great learning experience to allow me to be more efficient and effective tomorrow. I think your idea of investing the money is a fantastic idea, but I want to learn more or have a partner/mentor willing to share their wisdom over lunch or some coffee (whatever they choose).

Any advice, insights, or recommendations that would be helpful are appreciated!

@Simcha Davidman 

Thank you for taking the time to respond to my post! Yes, I am very new to the BP family.

So, regarding your insight and suggestions or things to consider. As the vacancy rate, I scanned over the ? in the calculator and I chose 3% based off the area and what I know that tenants stay for. I was comfortable with that number but maybe I should consider putting in 8% from now on for all of my potential rentals; THANK YOU!

In regards to the maintenance and repairs I did choose the 5% option and that is because the mechanicals and all major expenses are in excellent shape and I believe that IF something would happen and the home warranty will not cover it I do have a 1-year emergency fund set aside for this reason. Again, I only chose 5% because of the condition, BUT from now on I will focus more on 8%-10% as well as take risk into consideration as I did with this potential property. With the repairs that need to be done, I do have experience fixing, replacing, or repairing each aspect of a property.

Regarding the leasing fee; I don’t recall if I chose 7% or 10%, but I do plan and will take care of that on my own. As my portfolio grows this property will possibly be grouped in or I will attempt to do a 1031 exchange.

Finally, the refinance aspect; I did adjust that from 1- month, 3, 6, 9, 12-month refinance and it didn’t change the numbers at all outside of what the refinance option of 6-months displays. I will refinance as soon as I can. I’ve also considered getting a home equity line of credit, but there are some rules that go with using that line of credit to finance another property.

In the event this all works out, I believe that this could be a good start to my first rental property. I just need to finish the lease and have 2 different lawyers that I am able to talk to (from referrals) that I was going to have look over the lease to ensure that all aspects are covered and if there are any loopholes or “weak spots” that need to be addressed to make sure I am completely covered. Thank you again for taking a moment out of your day to share your thoughts and suggestions. If you have any more thoughts or concerns, please feel free to offer them!

@Tiffany Stevens, I had a contractor come in and give a high estimate of the max cost. The home is actually in REALLY good shape. The only issues that need addressing are the 5 windows and POSSIBLY the furnace. I will have the furnace serviced if possible but the estimate is built-in for the two of them.

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*This link comes directly from our calculators, based on information input by the member who posted.

@Nick Giulioni thank you for the encouragement and the suggestion!

Good morning Bigger Pockets Family!

Unfortunately, because of a time crunch, I ended up getting myself into a tight position purchasing my current home. I have been looking at many different options to create more income to set aside for investing as well as savings. Although I do have concerns with having two children both of which will be with me 50% of the time (one being a newborn) I have decided to find a roommate. My questions are:

Do I treat them as a regular tenant (background check, online payments, etc)? What do you recommend to do with the additional income? I have over $80k to invest, $8k in personal savings, and 34% of my current income going to household expenses (mortgage, taxes, utilities). Do I pay down my mortgage to create higher equity for a HELOC? Do I use it to invest in rentals? What are your suggestions? (I realize this is loaded and options seem endless). I am 35, looking to have my first rental property in the next few months. Currently, I am focused on single-family and small multifamily properties. Ideally, I will find mobile home parks and apartment complexes to invest in. Thanks in advance and Happy Easter! - Blessings

@Mitch Messer, excellent! Thanks so much. Yes, they do have a son. He has been there helping to move, but he did not want any part of the negotiating with his parents. I can look into the "subject-to" option as well. Thus far, I feel I have handled the situation well. My mom and the current owners have not felt offended or pressured by my approach. I realize this is a very difficult time for them. It is unfortunatet that i found out last minute or this may have been a little easier to manage. unfortuantely, because of the short window and family friends, I have to be just a little more discerning. Thank you again for your insight!

@Theresa Harris, you are absolutely right. I have gone through all of that, especially, since this is a friend of my mom. I have tried to remian, patient, understanding, sympathetic of his situation. I have also suggested allowing his attorney and myself to work out of the details and all he would have to do is give power of attorney to work on his behalf to get the deal done. Again, I recognize this gentleman is overwhelmed, but time is closing fast and I want to be able to help both of us out. 

@Mitch Messer, Hi! I apologize for leaving that critical piece of information out. The home is located in Pennsylvania. He stated he has contacted the bank and they are willing to work with him and myself to keep the home out of foreclosure, but he continues to go back and forth as to what he wants to do. Thank you for the repsonse!

Hey, Bigger Pockets Family!!!

I am looking at a home that is in pre-foreclosure status in an "A Class" neighborhood. These people ran into a very difficult time and currently suffering from major health issues. The wife just had a stroke a few days ago and the husband is on oxygen and currently having tests run for cancers. They are planning to just walk away from the home and allow it to foreclose. Fortunately, my mom has developed a friendship over the past few years with them. I approached them to try to buy their home before it went into foreclosure. The couple is much older, probably in their 60's, and already have a place they are currently moving into. The house needs about $15k in repairs due to hoarding, animals, and smoking. A few days ago, the husband said they didn't want to deal with anything and planned to let the home go. I [resented a few offers I felt were reasonable but unfortunately, he unloaded all the aforementioned health concerns right after my offers. He states he doesn't care about making any profit but isn't true based on his expectations. 

When fully repaired, the home can resell at $140-$150k. He owes roughly $70-$75k on the property and wants to sell the home for $100. I offered $80 cash, he picks the closing date, and I would help him move. The home will be foreclosed on May 10th. Any suggestions on how to handle this situation? P.S. this would be my first flip.