All Forum Posts by: Tommy F.

David Harrison IMHO you should walk away from this "opportunity"

@Rochelle Wilkinson Checkout this thread I commented in a few months ago about renting to parents, it could apply to your uncle.  

https://www.biggerpockets.com/forums/52/topics/341...

@Jose Corbera  Forgot to mention, the podcast is about paying-off a mortgage so don't dismiss it.  The speaker goes in more detail and will explain the benefits of a mortgage.  Take care!

@Jose Corbera You mentioned you want to learn, but don’t have time. I invite you to enroll in Automobile University. As you’re rolling through beautiful south Florida, listen to podcasts, courses on CD, whatever you can find. I’m going to get you started with two.

The first easy lesson is a podcast episode that will require you to listen several times to understand the concept. The speaker is a bit hard to follow on first listen, so give a few tries. Also, the first few minutes of the episode is not helpful, so bear with it, and on your follow-up listens just speed through to the key points. You can listen on Sound Cloud with your PC or download the podcast. Be sure to read the show notes.

https://moneyfortherestofus.net/mny044-mortgages/

The second easy lesson for you is an 8 minute Youtube clip and you can read the same article on the other link to better understand the info.

https://www.youtube.com/watch?v=zP0rP3X-nMg

http://www.edelmanfinancial.com/education-center/articles/1/11-great-reasons-to-carry-a-big-long-mortgage

Jose Corbera Pros and Cons to HOA. Your last post clarified this is a townhouse. Pros - the HOA takes care of exterior and grounds maintenance. Cons - there may be a limit on how many units can be rented, check the HOA covenants. Other Con, special assessments. Just when you think you're cashflowing nicely, the HOA hits everyone with a special assesment for some underfunded captial expenditure. Read the HOA financial statements when they're released.

Jose Corbera 4% for 30 years is cheap. Plus your after tax cost of debt is even lower. Moreover, inflation and appreciation are working in your favor. Assume a mere 2% inflation, your debt devalues at that same rate. Assuming you didn't buy at a market high price, consider a mere 2% appreciation each year. Your mortgage is a great financial tool. Now, the PMI you're paying is because you only put 3.5% down. And the HOA is another fee you could've avoided or minimized by selecting a different property. I encourage you to study more in depth about mortgages and you may come to better appreciate the deal you have. All the best!

Rich Davis Use Form 1040 Schedule E as your guide and create your own spreadsheet. Easy. No need for special software.

@Steven W.

You're saying you don't know who would want it and if it's not you, then move on. IMO you're not likely to flip the lot for any material profit. If the neighborhood is C++ with rentals, nobody will build a new house to owner-occupy. If you can get the lot on the cheap and think you can put another cookie cutter house on the lot then go for it. However, in a C++ neighborhood, is it worth your time and money? Another consideration is a vacant/burned-out lot next to your house will not be advantageous. It can become a place for people to hangout. Maybe it's time for you to sell your house.

@Steven W. 

You know your purchase price on your triplex and you know your depreciation basis on the triplex, so the difference is the cost basis of your land. Then just compare your lot size to his and at least you have a starting point on price. However, his lot has a pile of debris on it and he has to pay for clean-up. You can save time and pay a premium for someone to remove it for you. Speaking (typing) from experience (I've done it) save money rent a skid loader and construction dumpster and move the debris yourself. If it hasn't burned to the ground, you can get the local fire department to do a training burn and take it down to ashes for FREE. If it hasn't already been scavenged, pick-up all the charred Romex copper wiring and copper pipe. Depending on the size and age of the house, there could be a couple hundred pounds of copper and at +/-$2 per pound you can make several hundred bucks and cover your skid loader rental. However, do you want the lot? The lot already has utilities pulled to it which adds value. Building another house for investment/income property may present a challenge to get financing from a bank because you'll be seeking a construction-to-permanent loan. Usually, those loans are for owner-occupied properties. It's in a C++ neighborhood, can you put a manufactured house with a block & stucco foundation on the lot? A manufactured home provider may offer some type of financing regardless if you're owner-occupied or not. Hope this helps.

@Justin Sumulong Getting an MBA involves time and expense. Do you have the spare time to devote to school for 18 to 24 months? Does your employer offer tuition assistance? If you answer yes to both then I say do it. I did it and I would do it again, especially if someone else is willing to pay for it.  I definitely wouldn't go into debt for an MBA.  I went to a small accredited non-profit university. My employer paid a portion and I used military benefits. I got out of the classes what I put into them. It definitely helped me in my corporate job and it's helped me as a real estate investor.  Accounting, finance, and tax classes were especially helpful and transferable to both corporate and personal life. 

All the best!