Real Estate Investing: Help me understand how a self-sustaining rental is a bad investment. |
- Help me understand how a self-sustaining rental is a bad investment.
- Have young adults found the treasure of investing?
- Paying down your mortgage early... Good or bad idea?
- Moral dilemma with selling homes to large institutional investors
- Selling my investment property to my tenant give me some advice
- Anywhere not experiencing housing boom?
- First year in review - 3 properties in Spokane, WA
- Why I Am Investing In The Colorado Front Range Long Term.
- Insurance for a flip?
- Struggling to get my head around CAPGAINS on sale of a rental
- FSBO
- What would be your investment strategy if you’re in my shoes?
- CryptoSwap Finance - Bullish DeFi ICO of 2021 – Everything you need to know - Features Overview - Products launch in May. Gain 50x short-term.
- To sell or not to sell..??
- Single family
- Appraisal for 4-plex multifamily with additional non-conforming unit
- Tax efficient way to handle front foot fees?
- International Land Equity line of Credit?
- Investors with multiple properties: do you diversify or do you specialize?
- SF: Explain TIC refinance to me
- Down Payment Donor
- Northern VA (Bristow, Linton Hall) townhome
- YAY! Passed Perc Test!
- Advice on Writing Letter to Landlord About Purchase (Laying out financials)
- Requirements on an owner occupied property
| Help me understand how a self-sustaining rental is a bad investment. Posted: 15 Apr 2021 02:19 PM PDT If all costs included (including repairs, vacancies, income taxes, and fees) subtracted from your rental income is 0, how is that a bad investment if in a stable market (over 30 years)? Is the thought mainly driven on the assumption of 20% down? For example, if I were to get a home with only 3% up front (NET, not just down payment) on a 2.5% fixed rate, that self-sustains rent... I don't see how that isn't an amazing investment. Its just equity building in the background, and eventually becomes positive cash flow as inflation will generally increase your rental income and only increase your secondary expenses (mortgage, the largest expense, remains the same). Then a massive cash flow spike after 30 years. Please feel free to poke holes in this logic, but keep in mind, I am INCLUDING recommended expense averages for income taxes, repairs, updates, and vacancies. [link] [comments] |
| Have young adults found the treasure of investing? Posted: 15 Apr 2021 09:01 PM PDT I feel investing has become a popular topic on the internet from what I've seen. A big example was the big "GameStop war" or I've seen an increase of real estate/stock market on social media (YouTube, tiktok, others). Maybe I have a skewed view as I am into investing and it's the majority that shows on my recommended. Do you think it is just a trend or has the majority of young adults have found the real treasure of investing? And specifically do you think real estate prices will be competitive in later years due to the increased knowledge? [link] [comments] |
| Paying down your mortgage early... Good or bad idea? Posted: 15 Apr 2021 10:16 PM PDT I was reading another post and someone mentioned there's no point in paying down a mortgage at todays ridiculously low rates, especially with the stock market yielding returns at 10% consistently. That's making me re-think my strategy. I've always been kinda old school, paying off debt as quickly as i can, but that poster made a good point. Rather than pay down 3% interest rates, I could put that in stock instead. I currently have a condo , duplex, SFH and my personal residence. The first is paid off, the rest are at 3.2% interest and less, all paid down 20% so no PMI anywhere. Thoughts? [link] [comments] |
| Moral dilemma with selling homes to large institutional investors Posted: 15 Apr 2021 06:40 AM PDT This has been bothering me for a while now partly because I unknowingly helped create the problem that we see in the housing market today packaging and selling large numbers of houses to institutional investors . The lack of supply is largely due to the fact residential single family housing has become an institutional asset class over the last decade. We now have large homebuilders switching business models and building to rent, rather than to sell. This article talks about it. in a builder trade magazine and here is a WSJ article. This is going to have long lasting negative ramifications as we are seeing the largest asset most Americans will own in their lives being transferred to these funds. As a result, we are seeing rental prices as well as home sales prices sky rocket. Some has to do with Covid and prices will surely come down some, but long term this is going to have negative effects on all of us if these funds keep buying up entire subdivisions of brand new homes with regular homeowners having to compete against institutional cash. I can tell you first hand Blackstone was overpaying for properties back in 2012-2014 to the point where other investors could not even compete. It seems this is where we now and it's not going to be a good situation for smaller investors or homeowners if this continues. I have considered only selling to direct homeowners and even putting in a deed restriction (which I know isn't the smartest thing to do investment-wise). Curious to hear how others feel in the industry? [link] [comments] |
| Selling my investment property to my tenant give me some advice Posted: 15 Apr 2021 06:03 AM PDT My tenant wants to buy my house. He's pre qualified for much more than what it's worth. However he doesn't have much more than 5% down for the down payment. My worry is that the appraisal will come back short which he won't be able to cover. If I put it on the open market I'm guessing I'd get offers willing to cover the appraisal gap . My house is one of the nicest in the neighborhood and much poorer quality homes are selling in days. I'm worried there may not be comps to justify whatever price we agree on. [link] [comments] |
| Anywhere not experiencing housing boom? Posted: 15 Apr 2021 10:09 AM PDT I've been looking at real estate all around the country and every single place seems to have a "crazy market right now". It's there anywhere right now that's just stagnating? People are saying it's low supply in cities, but also that covid is causing people to flee the cities now that they can wfh. Something has to give right? Do you think we'll see a market correction or is this just the new normal across the board? [link] [comments] |
| First year in review - 3 properties in Spokane, WA Posted: 15 Apr 2021 10:21 AM PDT Last year my work, like many, went fully remote. As it became more clear that Covid wasn't going away quickly, my employer declared remote work would last until further notice. I (28M) live in Seattle (work as a business analyst for large corp) and was always curious about real estate but recognized it wouldn't make sense in Seattle. I had some friends in Spokane and knew it had a bit of a negative reputation within Washington, but it caught my eye as it became clear that cash flow was very possible. I suspected that the world would change with remote work becoming more possible, and that people would be attracted to the west coast, no state income tax, and relatively affordable. I did a lot of reading online, mainly using Reddit and various Google searches. I didn't like YouTube gurus, podcasts, or BiggerPockets (beyond the basics). I called a bunch of realtors, found one that understood real estate investing and was hustling for me, then booked an AirBnB for a month. My primary focus is cash-on-cash return because it makes the most sense for me when comparing across investment options - with this chunk of money (equity + closing + reno), how much can it make for me each year? I toured a bunch of houses, submitted offers that didn't get accepted, then found one that finally got accepted. The first house had an additional unit and both the primary and ADU had tenants that had been there for 4+ years. Like I mentioned, it cash flowed well, though it wasn't in a particularly nice area. It required about $8k for some improvements and updates and was fairly simple. The steps were scary at first, but by the end I was confident in scouting houses, leveraging my realtor, working with loan officers, preparing my documents, and working with tenants. I figured, why not do it again? Having been a college student that lived with many roommates in communal housing, I was interested in the idea of getting a house near a college. College students at an expensive private school typically have parents that pay their rent, plus with 5+ tenants it's easy to bump up rent without creating large resistance when it only impacts each tenant by say, $25. To me though, $25+ per person means $150 to me over 6 tenants. That's $1800 extra per year. All that to say, one popped up on Redfin that interested me, so I checked it out and put an offer in at asking price. While I knew the first one was a great deal, this one seemed like just a good deal. The appraisal came back $15k higher than my offer, so I felt solid. No renovations needed on this one. I spent a few months managing these properties without too many concerns. I was living outside of Spokane but found it easy to manage the property, despite having a plumbing issue, a break-in, and some pesky mice. It was easy working with the tenants by being upfront and timely. I called local service providers, got the best quote to value, and had them get the work done. Sure, I could've handled some of it myself if I lived locally, but I like being elsewhere. I always check Redfin and found another one pop up about a block from my college rental. I had my realtor do a video tour for me and decided I really liked the idea of having the two homes so close together. This was very similar to the other college house, so I knew there'd be some economies of scale. My realtor spoke with the selling agent to get a sense for what other offers were coming in at. Definitely some room for collusion there, so I was a little skeptical but I trusted my realtor enough to follow his advice. The market was hot and I ended up offering +10% over asking price. I knew my cash on cash return would suffer for a few years potentially, but I trust the growth of the area and the ease of increasing rent. I was surprised when it appraised for $18k over my offer. All in all, it's been easy managing the three properties. I've built relationships with the tenants and as a young adult I find it easy to work with college students. I understand that phase of life having just lived it. My plan is to self-manage until I feel overburdened by it, or I regret it. I decided I want to learn the hard way on this one, since most guidance is to have a property manager especially when I live far from the city. So there you have it. I definitely have learned a lot, while also feeling very inexperienced. I'm mostly self-taught and it probably shows. Putting 25% down on each property was likely a mistake, though it made my offers competitive in a hot market. My plan is to hold them for a long time. Also, the first two appreciated very well so far, but I imagine that won't stay. Since my focus is on cash on cash return, buy and hold, the appreciation to me is reassuring but also a bit irrelevant. If anything I'd prefer the market to stay lower so that I can buy more. Any advice? I have a lot to learn, so fire away. Home #1: Specs: 3B / 2Ba + ADU Studio Financing: 25% down, 3.325% 30-year Listing Price: $165k Purchase Price: $180k Appraisal: $180k Renovation: $8k Rent: $1200 + $640 (-$200 in utilities) = $1640 Estimated Value Today: $237k Home #2: Specs: 5B / 3Ba Financing: 25% down, 3.5% 30-year Listing Price: $285k Purchase Price: $285k Appraisal: $300k Renovation: $3k Rent: $2600 (they pay utilities) Estimated Value Today: $340k Home #3: Specs: 5B / 2Ba Financing: 25% down, 3.575% 30-year Listing Price: $305k Purchase Price: $340k Appraisal: $358k Renovation: $0k (so far) Rent: $2400 Estimated Value Today: $346k [link] [comments] |
| Why I Am Investing In The Colorado Front Range Long Term. Posted: 15 Apr 2021 12:38 PM PDT I am a commercial broker in this market. I welcome your feedback. I am sharing my perspective because I want to facilitate a debate on the best long-term markets to invest in in the USA. In my biased opinion, the Colorado Front Range has the most long-term potential for growth and the least downside of any region in America. Prove my thesis wrong! Top Reasons For Long Term Growth Potential Control of Water Resources Colorado's water comes from snowmelt and some of the nation's most prominent headwaters (Colorado/ Arkansas Rivers). Water in CO is naturally replenished every winter even with changing climate conditions. Colorado's water supply has implications for most other western states, so it is always safer to be close to the source. Critical Military Infrastructure & Headquarters https://militarybases.com/colorado/ These military bases are not going anywhere and maintain a steady base of consumer demand in the front range. Colorado is a key piece in our nation's defense system and the heavy-duty military presence in this state attracts other businesses in key industries. Aerospace Industry & Cyber Security Headquarters The below links are for the Colorado Springs area, but this should give you an indication of how deeply rooted these businesses are in the Front Range markets. Did I mention most of your federal tax dollars are going to these defense contractors? The feds have set up a permanent pipeline of money, jobs, and infrastructure spending for this region to protect and enhance their military assets, so I think this factor limits the downside of the commercial markets in the region. http://www.metrodenver.org/industries/aerospace/ Growing Tech Hub https://siliconmaps.com/rocky-mountain-tech-map/ Every few months I read about another small to mid-sized tech company relocating from California to CO. The area between Denver and Boulder is attracting tech companies left and right. Tech companies are making their way here because this is a great place to live which attracts talent and cut costs from California. Not to mention we already have a relatively well-educated labor pool in place. https://www.builtincolorado.com/2020/09/03/palantir-denver-headquarters-colorado-tech-hiring https://blog.usajrealty.com/posts/latest-companies-moving-to-denver Top Tier Airport Infrastructure According to Wikipedia, Denver is the 16th busiest airport in the world. Having a high-quality access point for tourism will continue to help businesses in the state grow. https://en.wikipedia.org/wiki/List_of_busiest_airports_by_passenger_traffic Established Tourism Destination Colorado is a premier ski destination for enthusiasts around the world. But that is not all we have to offer. Anyone that likes the outdoors can find something to do out here that they cant do at home. We have world-class trout fishing, hunting, river rafting, and a whole lot of hiking to name a few. Functional State & City Governments I do not want to get into politics and this is just my opinion. Colorado has by far the most functional State government I have dealt with, and local governments tend to be relatively well run and not mired in corruption like California. From what I have heard and seen in the Denver area, getting building permits and plans approved can be done on a reasonable timeline (4-6 months.) In LA it was taking 18 months and even if you were connected it would take over a year. Quality Education Resources https://www.usnews.com/news/best-states/rankings/education CO has by any measure some of the best K-12 education resources in the country. This is due to a continued commitment by the state and money from taxing cannabis sales. While the education system across the country has been crumbling over the past few decades CO has made massive improvements and is poised to continue to have a well-educated workforce in the long term. Not to mention quality higher education from the CU system as well as other good schools like Colorado College (Alumni) and Denver University. Legacy Medical & Legal Cannabis Market This ties back into the Functional State government point I made. CO was the first state to fully legalize cannabis and even after almost a decade and other states jumping on board CO still has the most functional cannabis market in the world. While other states completely bungled the process (California ), Colorado has created and maintained a profitable market for operators with good prices for consumers. The cannabis industry is also augmenting this state's tourist appeal and gives CO worldwide name recognition & cache. One day there will be banking reform for this business and potentially federal legalization in the next 10-20 years. If this ever happens Colorado will be poised to be a main cannabis production hub for the entire country. Top Tier Entertainment Venues & OK Profesional Teams https://www.redrocksonline.com/ Denver has one of the best concert venues in the world (Red Rocks) and some great smaller venues like the Fillmore and Ogden. Once things get going again I plan to spend a lot of time in these spots catching artists as they make their way across the country. Most tours stop in Denver because it's on the way from one of the coasts and we rock. Broncos, Nuggets, and Aves are professional sports teams with middling to low prospects the near future, but that can always turn around. Weaknesses Forest Fires They get worse and worse every year. I would never own a property in the western united states outside of the city grid. Long term the fire risk is too great. In California, it is almost impossible to get fire insurance in some areas. This trend will certainly apply in the mountains here if it is not already. Even if your property is fine the smoke does limit outdoor activities and can make the air quality horrible from July- September. Every part of our planet will have to deal with the fallout from global warming. Forest Fires is Colorado's cross to bear. Land Locked No oceans case you did not notice. Other markets with ports do have a competitive advantage in this regard. Traffic Bottlenecks & Needed Infrastructure Expansion Daily traffic is laughable compared to what it was in California, but it will continue to get denser as people keep moving here. I-70 is not in the best condition and is the most crucial transport route in the state I-25 in Denver will be like the 110 in 10 years, but this is not necessarily a bad thing from a real estate perspective. Building Wear & Tear Lots of snow in the winter can be tough on roofs and the salt from the roads is corrosive so buildings out here do require more upkeep than more temperate markets. Overall Potential For Density Real estate is a supply and demand story. There are not many natural barriers that limit horizontal expansion. Other than the mountains, Front range markets have vast swaths of land to expand into so in theory, the upside potential for price expansion can be limited by this factor. 0 CommentsShareEdit PostSaveHide [link] [comments] |
| Posted: 15 Apr 2021 08:13 PM PDT I am in escrow on my first non lived in flip and want to get it insured for the renovation. What companies have youguys had luck with for this type of insurance? Thanks in advance! [link] [comments] |
| Struggling to get my head around CAPGAINS on sale of a rental Posted: 15 Apr 2021 03:50 PM PDT Using Turbo tax premier, i figured it would walk me through it but i can't find a thing. We bought the property for $130K 8 years ago. lived in it the first year. Our gross income is $120K, AGI is around $90K So we owe around 15% of the $60K, right? [link] [comments] |
| Posted: 15 Apr 2021 06:31 PM PDT Decided to sell a house. Wanting to sell by owner but have a realtor friend who says she has clients that are looking to buy a house. If I sell to one of her clients, do I owe her a full 6%? [link] [comments] |
| What would be your investment strategy if you’re in my shoes? Posted: 15 Apr 2021 07:53 PM PDT My wife and I are in our mid-30s living in HCOL. We make 6 figures income. We recently added an ADU to our primary house making it as a duplex to house hack. The rent from the other unit pays for our PITI. We refi-d back in Jan 2021 for 30 year at 2.375% with balance of $475k - currently value around $950k. We also had a SFH as a rental that we cashed out last year before COVID and added another unit turning it to a duplex as two detached houses. I'm planning to fix the front house in a few months to bring the house rent up to market value. It should generate around $2600/month. I refinanced this property a few months ago with mortgage of $380k at 2.75% for 30 years prior to completion of the project. This property is valued at least $900k. Each month I pay roughly $2100/month (PITI) so the back unit covers this PITI. Front unit will cover cap ex, maintenance, and any other future expenses. Our goal is to grow our rental portfolio and buy more multi-family units in the future. However, I would like to ask this community what your thoughts/strategies are in terms of moving towards this goal? I'm bullish on real estate and would like to take advantage of the low interest rate. These are the options I could think of right now:
Question is...what would you do? Thank you! [link] [comments] |
| Posted: 16 Apr 2021 01:40 AM PDT CryptoSwap Finance is a decentralized exchange that runs on Binance Smart Chain (BSC), and enables uses to SWAP BEP-20 tokens in a trustless and permissionless manner. The platform is fast, cheap, and user-friendly. CryptoSwap Finance has many features such as farming, staking, and trading exchange that enable users to earn and win tokens. That is CryptoSwap in summary. In this article, we will look at the features of CryptoSwap and the problems it solves. Blockchain and smart chain technology have opened a floodgate of innovation. With BSC, it is now possible to develop decentralized finance projects (daaps) with unique features such as decentralized exchanges (DEX), firming, staking, liquid pools, and lottery, which enable users to earn and win tokens in various ways. CryptoSwap Finance is a decentralized finance protocol that offers these features, among others that that enable users to earn higher with the least transaction fee and high transaction speed. Products:
Final Thought The above core features of CryptoSwap enable the users to earn and win more tokens. The users can also directly take part in the voting process to suggest ways of improving the project. CryptoSwap is designed to ensure that the users obtain optimal benefits. Website: http://www.cryptoswap.finance Whitepaper: http://www.cryptoswap.finance/whitepaper.pdf [link] [comments] |
| Posted: 16 Apr 2021 12:30 AM PDT Summary I have a small property in a suburb of Kansas City, MO. I've had a renter in it for the past 5 years that has never missed a payment and very rarely contacts me about anything. I owe $57k on it and the interest rate is 4.5% with a payoff date on the current schedule of 20 years. I think I could get around $100k for it, but I haven't talked to a realtor about comps yet. Maybe even more with the way things are right now. It's cash-flowing ~$300/mo right now after standard expenses, vacancy rate, repairs, etc. My earned income is too high to take RE depreciation in current years. Options
Considerations If I go with #1 I worry about not taking advantage of lower rates or selling into a hot market. I'm thinking I will at least do #2 or #3. If I go with #2 I worry about adding more debt to my balance sheet, and again not selling into a hot market. Both #1 and #2 should help me if inflation goes crazy, and would continue paying positive cashflow, but I'm not seeing the immediate impact of the tax savings for depreciation. If I go with #3 I'm selling into a hot market and I get to empty out my current depreciation bucket to offset the gain on the sale. My worry here is that I won't find something to get that cash back into right away, and it will melt away like an ice cube sitting in a savings account while I wait for the market to correct. After typing all of this out, I'm leaning towards #3, and I'll just have to be active and find something else to do with the cash besides let it melt. I'd appreciate any thoughts on something I may be overlooking here, or just general feedback. Thanks! [link] [comments] |
| Posted: 16 Apr 2021 12:27 AM PDT I hear a lot about duplexes, but had anyone had good experiences buying and renting out single family homes? [link] [comments] |
| Appraisal for 4-plex multifamily with additional non-conforming unit Posted: 16 Apr 2021 12:23 AM PDT Hello, I'm in contract with a 1950s 4-plex home with a non-conforming basement studio unit. (Still not completely sure what non-conforming means) On redfin and zillow, this property is categorized as a 4-plex. When I visited the place, it had 4 doors in the front leading to individual units and on the side was entrance to the basement studio unit. (Every unit has their own entrance, bathroom, kitchen) The seller bought this in 2006 and he said the basement studio unit was there before him. This is my first time investing in real estate and I'm worried that the appraiser might view this as a 5-plex. (The lender said if this happens, I would not be able to get a owner occupied residential mortgage but a commercial loan) How does the appraisal process work and should I be worried? What are some potential things that the appraiser can say that is a blocker? Thanks in advance. [link] [comments] |
| Tax efficient way to handle front foot fees? Posted: 15 Apr 2021 04:26 PM PDT Are there any tax saavy ways to handle paying these front foot fees? Aka scam fees private companies charge [link] [comments] |
| International Land Equity line of Credit? Posted: 15 Apr 2021 10:26 PM PDT Rookie here, please forgive any incorrect verbiage. If I buy a plot of land in Mexico (I'm in the US) outright am I able to leverage the investment into any kind of equity line of credit in the United States? It is undeveloped. Note-not looking for guidance on if the purchase is advisable. [link] [comments] |
| Investors with multiple properties: do you diversify or do you specialize? Posted: 15 Apr 2021 11:07 AM PDT There's two types of investors
Benefits of specializing: hyperfocused on your area of expertise, build deeper relationships, can get better deals. Benefits of diversifying: not tied to one asset type or geographic location, bigger safety net, can choose locations with more attractive returns. Which one are you? [link] [comments] |
| SF: Explain TIC refinance to me Posted: 15 Apr 2021 10:17 PM PDT This is mostly a question for the San Francisco market. How does it work when you convert a duplex to TIC from a mortgage perspective? Let's say I own a duplex and have a $1.5 mortgage on said duplex. I covert to TICs and sell off a fancy unit for $1.5. (Woohoo economies of scale!) I keep my owners unit. Option 1: I want to keep the cash to invest and not pay off the original mortgage. Option 2: I want to pay off the mortgage. How does this work practically and with the bank? [link] [comments] |
| Posted: 15 Apr 2021 10:10 PM PDT Hi, my brother in law is donating money to help for my second home's down payment. The lender asked to see his bank statements where it will show the money he is giving me came from a loan my brother in law took. I know that I'm not allowed to get a loan for the down payment, but would my donor getting a loan be seen as negative or prevent the lender from moving forward with the loan? [link] [comments] |
| Northern VA (Bristow, Linton Hall) townhome Posted: 15 Apr 2021 03:09 PM PDT Hello my investors! I have decision to make, and need your help making this decision. I have a property that I bought in 2019 April at Linton Hall, Bristow. It is townhome, paid $345k. Last year due to relocating my work. Unexpectedly, I became a landlord, within few weeks of transition. My tenant is moving out end of this month. (Monthly cash flow is -$200) Currently I live in Columbus (apartment in Powell OH), and was thinking about selling my townhome in VA to buy a house in OH (Powell). (Due to management changing in our apartment, they are offering month to month rent) Based on Zillow, estimated house price is $407k. With current market, I am comfortable to say, I. An get about $430k. (What is your thought?) I am not sure what is the right move here.
What would you do? [link] [comments] |
| Posted: 15 Apr 2021 08:29 PM PDT I had been sweating since I bought this land to pass perc. This county where I'm at only has wells and septic in the area and still is somehow a very sought after neighborhood. (Houses, even 1500sf, don't go below $350K). So it's 2 acres and they had nice sandy dirt at 15'. He said I could build any size house for the property since I have room for a septic and everything passed with flying colors! We are over the moon thrilled! [link] [comments] |
| Advice on Writing Letter to Landlord About Purchase (Laying out financials) Posted: 15 Apr 2021 12:28 PM PDT Short and sweet of it, I truly believe it would be beneficial for everyone on both sides of this, but feel like I have one shot to lay this out in the best way possible and need help articulating it in the right way. I think he would get more $$$ out of selling to me now than waiting to fall apart and sell in a few years, and I really love the house and don't want to see it be neglected further. Okay, so I'm currently renting a home I love and would love to purchase and do the needed repairs before they are too bad/costly. My realtor called the owner to inquire if he'd be willing to sell (he uses a rental company and lives several hours away), which she said he was a very nice guy, but that he's using the home to fund his retirement and will just keep the house until it costs more to maintain. This is the part that kills me, I love this home and it's old features, but it is already starting to fall apart and needs many repairs before things get worse. This guy made his money back on the house years ago and wants to hold onto it until it falls apart in a few years and may end up just getting torn down or gutted. He doesn't want to do the upkeep to maintain the home and make it last longer (electrical updates, foundational supports that need to go in, fix garage before collapse, roof redone, etc), so his plan is keep collecting rent until one of these big issues needs to be fixed and then get rid of it. I know money is what matters to people and the heart of it isn't what is important (although my love for the home and location are my motivation), but doing math on this and talking to contractors/realtor I genuinely feel like me purchasing it from him now would be the best for him financially and trying to figure out my best way to lay this out in a way that doesn't scare him off, feel like I'm trying to trick him in some type of way, or upset him either. Basically, I know what I pay in rent and what percentage the rental company charges of that rent. They charge extra for tenant turnover when they need to place someone new and run credit checks and such. But if we look at the best case scenario for what the owner could make on this property, if I never move and there are never any maintenance/repair costs, it would still take the owner between 9-13 years to make the amount in rent that I would purchase the home for. However, I wouldn't stay here renting for 9-13 years, so there would be extra fees for new tenant placement. There will also be some very costly repairs within the next 5 years (if nothing is done to work on them now, which they don't want to pay to do). If I were to buy it right now for 3-4x what they purchased it for 10 years ago, they would have that lump sum of money for retirement right now, without any lost cost on repairs, maintenance issues, tenant complaints or turnover, liability, or any of the issues that come with renting a property. So I could pay him right now, what it would take him almost another decade to make from rent (but he will not get another 10 years out of this house without having to redo the entire garage and roof, plus foundation and electric that are going. I don't want it to sound like I'm just finding issues to scare him and have him wonder why I'd be okay with all these issues then if it's so bad, but my thing is I genuinely love this home and the neighbors that have owned and lived next door for 10 &16 years. They are people I would love to own a home next to, it's an area I love living in, and while I'm living here I could be working on these repairs now and continue working to bring the house back to life and maintain it instead of letting it just fall apart. I believe within 5 years he will have a costly enough issue that he will want to sell instead of deal with it, but I don't think in 5 years he will be able to get the same amount of money out of this home, especially if things are left to deteriorate and with how insane the market currently is. I love this home and believe I could start putting in the work now to bring it back to life and avoid more costly repairs in the next few years by getting on top of those issues now. What is my best way to present this information to him without seeming pushy or like a scammer? If he truly understands the numbers and would still rather hold onto it and sell once there is a big cost, I'll drop it and not ask again, but I would like to figure out the best way to present this to him to consider the value he could get out of it now vs in a few years when he has major repair costs that he doesn't want to deal with. I'm not someone trying to buy just to flip or make money, I just truly love the place and don't want to see it fall apart anymore and think we could both benefit from this deal, I think he'd take away more money now than he'd get out of it if he holds onto it without maintaining it and I could have neighbors I love and bring an old home back to life before it passes the point of no return. [link] [comments] |
| Requirements on an owner occupied property Posted: 15 Apr 2021 04:09 PM PDT Looking to invest in a small multifamily home with a friend of mine. In an effort to save some cash on the down payment we're trying to apply for it as a owner occupied property. Issue is I'm currently locked into a lease a city away. What are the requirements for me to be able to consider this my primary residence? Or if my friend co-signs on the loan is he able to live there and that still be considered owner occupied? [link] [comments] |
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