All Forum Posts by: Victor N.

@Thomas Kareeparampil, congratulations on your accomplishments so far! It looks like you will be able to accomplish your goal of 30 units by age 30. 

@Andrew S. TD Bank will do a HELOC for the non owner occupied 3 family. They require that you do not own more than a total of 4 properties mortgaged or not

Maybe for large apartment buildings that will make sense but for 1-4 units I don't see the need to request a seller's tax return. 

Tax and water bills are available online. You can also obtain electric and gas info easily. A quick inspection gives you an idea of the condition of the roof and window, and water heaters and boilers/furnaces have a manufacture date on them to help you budget for their replacements.

I guess it will be easier to have all that info in one place ready for you. So are you also willing to give your tax return to the seller? After all, he can claim that he needs to make sure that you can close the deal!

@Brie Schmidt, I've heard about that strategy before but from my understanding it required you to be heavily involved in the process and be very disciplined which is difficult for me and most people.

What worked for me is the old boring extra principal payment. My mortgage payment is set up on the mortgage co. website. It is set up so that each month, they deduct an extra $200 which is applied to reduce the principal. So even if the mortgage payment changes due to an increase in tax or insurance an extra $200 is still applied to reduce the principal. If your automatic payment comes from your bank account then your additional principal payments might be reduced if there is an increase in escrow ( tax, insurance for example).

I started with a mortgage of $104,000 in October 2013. As of today, Im about $20k lower. The mortgage including escrow is about $1200. The extra $200 totals $2400/ year or 2 extra payments a year! The property has a nice cash flow so the $200 was very easy to do. I might even increase it next year! The extra monthly payment works for me!

I thought it was "standard" ( the prudent thing to do) to have a mortgage contingency when you are using financing? 

@Mike Oquendo dealing with section 8 tenants is not easy but not all of them are bad! I've had section tenants for years  so I know exactly how you feel.

If the tenant pays rent on time and keeps your property in good condition, my suggestion would be to "suck it up" and not take things personally! You could have a "nice" non section 8 tenant who doesn't pay rent on time or is rough on your property.

If you really want the tenant out, simply contact his case manager at the housing authority. They will give the tenant a moving package so that the tenant can start looking for a new apartment.

But more importantly, you should not post online that you will no longer accept section 8 tenants nor should you tell that to potential tenants. It's considered discrimination and it is illegal. Look it up and you will find countless landlords who were heavily fined for doing just that.

@Isiah Ferguson, great situation to be in but there's no right answer to your question because it all depends on YOUR risk tolerance.

That being said it's better not to be on both extremes: too conservative ( paying down a property aggressively to own it free and clear before moving to the next one) or too aggressive ( leveraging every single property to the max). Most people fall somewhere in the middle and I suspect by your comments that you do too.

If I were in your position, my first move would be either:

1) get a HELOC on the primary residence. The HELOC fees for a primary residence are only a few hundreds at most. YOU DO NOT HAVE TO USE THAT MONEY NOW OR EVER. And as long as you do not use it, there are no fees and no payments to be made. You can consider this as a real emergency fund! Then I would invest about $100k out of the $140K into 1 or 2 cash flowing properties depending on how much they cost in your area. That $100k should cover acquisition ( down payment) and repairs to have the place ready to rent. This means that you will have a mortgage on the 1 or 2 new properties. An extra bonus of the HELOC with $0 balance is that it should boost your credit score because a HELOC is listed as a revolving account and looks like a credit card account on your credit report. Off course, that's only if you carry balances on your credit cards. If you payoff the card balances every month, then there wont be that much impact since your revolving credit usage is already close to $0.

2) buy a new primary residence ( $100k max for deposit and repairs) and move out of the duplex. You can get a lower interest rate and it's much easier to obtain a mortgage for a primary residence. And if it's a HUD home, owner occupants usually have about 15 days to bid before investors are allowed to which is also an advantage.

But if properties are much cheaper in your area, stay put at your primary and buy another rental with your own cash and when it's up and running you can then look at leveraging the 2nd rental and still keep you primary free and clear. It's all about your risk tolerance leve!  You got where you are today with sound judgement so I'm sure you will make the right decision this time too! 

I still use Craigslist but Zillow has provided more leads. One of the advantages of Zillow is that it sends your ad to other websites like Hotpads and Trulia. Also, most leads with Zillow show a basic Tenant profile such as income range, credit score range, how soon they are looking to move, etc

But one of the things I don’t like about Zillow is the fact that it pulls and makes available all your property records such as date of purchase, price etc which I prefer not to share with my tenants ( even though the info is public record).

I also cultured a relationship with a local organization that help people find a place to live and also pays for the rent, after they had responded to one of my ads years ago. They are similar to Section 8 but better. Now, when they have a need for an apt, they call me to see what I have available. It’s awesome to rent an apt without any ad.

Finally, I usually let my current tenants know when I have an apt available and I’ve gotten new tenants that way too.

I’ve never used Facebook but will try it!

https://www.yahoo.com/news/m/659b494c-7748-3b2f-8f...

What bothers me the most is the reaction of people who think that the landlord is a bad guy/gal, very rich, too greedy, etc... Happy to see that a few take the side of the landlords!

Will the new law help or hinder the availability of rental units? Will it slow rent increases? What do you think?

@George S.  HELOCs are great if you can get them. To answer your question, banks do no look at planning to use the money to purchase another property positively. So  be careful what you tell them during the application process. Once you close, you are free to spend the funds any way you chose!