All Forum Posts by: Jeff Wallenius

@Abed Asghar You are correct in the fact that the west coast makes very little sense for buy and hold investors unless you can put significant time and energy into drumming up leads and finding deals. The Midwest is an excellent option for investing but you also have to be very careful. Any house in these areas that is priced below $30-40K will be in D class neighborhoods. Even if these homes are marketed as "Turnkey" they are not appropriate investments for out of state investors. If you lived in those areas and this was your full time job, to maintain and collect rent, you MAY be able to make a go of it. The numbers look great on paper, but the long term track record of these properties is terrible with tenant turnover and repairs eating all your supposed cash flow. Investing out of state provides a fair amount of hurdles to overcome, but there are many opportunities for investors. I'd be happy to share my experience and provide more details if you have more questions.

@Account Closed the terms for HML are typically one year, but may vary depending on your project and/or agreement with your lender.

@Jenny Smith if your in a negative cash flow scenario it's time to part ways with the property. If you sell the home you can do an escrow holdback if the buyer demands or requires a new roof. If the roof is in really bad shape the house may not qualify for conventional financing which then would require the roof to be repaired prior to closing. 

I'm a bit confused as you stated you did not have the $11K to pay for the roof (which seems hight to me) but one of your options is to pay off the house?

A lease option may work if you can get a good sized down payment, and you may be able to increase your payments to help cover all monthly expenses, but this is just a bandaid. 

My suggestion from just your post, is to liquidate the property and find yourself a better investment.

Looking forward to our meeting @Randall Hicks and hope to provide some answers and clarity to your post. Always great to meet investors in our local area!

@Lior Arama are you looking to leverage your money with conventional financing or is that not an option? 

I agree here, if your able to travel to the property you need to see the interiors of all units. Too many bad surprises to be had if you don't. Best of luck!

@Kelvin Lee if you have not been in Portland long, here's all you really need to know. Any law or regulation passed by the city council or Portland brass will not have the landlords or sellers best interest in mind. 

Pros

-Reduced down payment

-Reduced mortgage payment as your tenant is paying half so your cost of living is cheaper

-Up to date knowledge of your property and any problems that may arise

-Tenants know your next door and would most likely take better care of the place knowing this (theoretically of course)

-No need for property management as your next door

Cons

-Privacy

-Loss of potential cash flow (If the both sides were tenanted, you may pay your payment plus cash flow in your pocket vs. having to pay half the mortgage yourself)

-A difficult tenant will make living next door a nightmare

-If selling you can't do a 1031 exchange on a personal residence so unless you've lived in the property for two years there may be a tax burden if you've had an appreciation gain

Just a few off my head, I haven't been in this scenario.

As @Alexander Felice mentioned, this PM is taking advantage of you without a doubt. Incentivizing PM's is the best strategy and in the end will maximize your profits by reducing vacancy and maintenance charges.

The downside of these transactions is evicting a tenant for non-payment, especially if your in non-landlord friendly states like myself. A tenant may not be paying for a month, you begin the eviction process and they online pay a third of their payment. This can get tricky, so keep that in mind depending on where your rentals are located.