All Forum Posts by: Trevor Schmitt

They can. The sale price may have to be approved by the lender at that point. 

Sadly, many people won't take the initiative to do so and will sit there and let the bank take the keys.

Sounds like you are doing some great things @Benjamin Sulka! 

Seems like the only thing holding you back from launching forward is the financing part. You should allocate some time to find a potential partner, or someone who would cosign a loan for you in order to get the party started! 

Speak to as many lenders in the area as possible... talk to local banks, big banks, mortgage brokers, credit unions... 

There is nothing hurt by shopping for a loan. After have a dozen conversations it will become clear what your best option will be. 

1) The appraiser will value the property as it is now.

2) You should find an experienced agent that can run a CMA for you and give insight on current value and ARV. (A good agent will be able to guide you through all of these questions firsthand.)

3) Obtain bids from 2-3 contractors minimum for each major job. 

4) Talk to as many lenders as you possibly can. Nothing hurt with "shopping" for a loan. 

5) I would advise against being dependent on obtaining a HELOC to furnish the property. If money is that tight with the deal, it may not be a great option. You do not know how high the interest rate on that HELOC may be when you are ready for it. You could become to leveraged pretty easily, especially if rehab costs end up coming in high... which they always do.

If there is a PM in place and the property is performing well, I would leave it that way. Keep that time available for other income producing activities. It can be easy and tempting to try and take on all of these tasks because you are capable, and it could save you money... but if you are trying to scale it is far better to start delegating right away. I can say this from experience and making the mistake to take on too many responsibilities. 

With that being said, it is still VERY important to manage your property manager well. Set expectations right away and hold all parties accountable. Have a system in place that forces you to check in and ensure things are being done right. This also was a lesson I learned the hard way... I just let a PM do their thing... and it ended it disaster. 

@Caroline Gerardo I agree with you. The pendulum will start to swing back and more young people will join the industry. The average age of the construction worker today vs. a couple of decades ago is astonishing. 

The construction industry currently has a shortage of 650,000 workers according to a recent CNBC article.

Also noted in the article, "The construction industry is now paying 80% more than the average non-farm job in the United States." 💲

Seems crazy that there is such a shortage in workers for the construction industry when the pay in way above average. 🤔

I am optimistic the trend of construction worker shortage will start to reverse as the wages increase, and money starts to become tighter for families.

What do you think will happen first?
1) More individuals join the industry and fill the gap.
2) Technology takes the place of the missing workers.

The resident score is supposed to provide a better predictor of your rental outcomes, as opposed to the credit score. I wouldn't have a problem with that. 

If there is still concern, you could ask for referrals from their last two property managers / landlords! That is my favorite technique to get the information you are really looking for. 

A "house" is a free standing, single unit property IMO (not very philosophical, I know) 

On the other hand, a "home" could be a bunch of different types of properties, including a house obviously. 

If you change companies, you should certainly be able to "roll over" your 401k funds to your new company's 401k without any penalty. 

As far as cashing out your 401k... there is really no way around paying taxes on those funds. 

I would suggest contacting a tax professional to get the exact cost of doing so. Once you know that, you will be able to decide if it is worth taking the cash out to pay off rental property mortgage and high interest debt.