Hey guys, how's everyone doing?? Alright let me give you a little back round first I guess... 21, go to UConn, just purchased a house 80/20 mortgage... What I ended up doing w/ the house was buying a 5 bedroom house so I can rent 4 other bedrooms... Already have 4 signed leases, pulled credit on everyone, and renting each room for $600 a month, and we split utilities 5 ways. So I decided since I wont have to deal w/ trying to get a mortage for a while it would be ideal to do a AOR... Did the AOR the day I closed on the house...
My goal in the AOR was to get basically sign up bonuses through cc's and through cardoffers.com
Applied for all cards on 12/28/06 Card Status CL Offers AMEXDelta - differed - approved 10k - CO AMEX Starwood - instant - 10k - CO Discover platinum card - instant - 1.5k - CO Citi American airlines - differed - approved waiting for card - CO - 6k Chase Sony - differed - $150 sign up bonus- approved 2.5k Chase united airlines - differed - approved 2.5k Citi® Diamond Preferred Rewards American® Express - differed - approved 1.2k Bank of America Student Visa Platinum Plus - deffered - CO - approved, 2k
CO = Card offers Not bad i think for a college student Previouse CL - 23k New CL so far - 34.7k total CL - 57.7k
Also ended up applying for Citi's EZ checking and 5% mma acct. I ended up opting not to do the BT as most of my cards did not have those incentives, did it mostly for flights, and sign up bonuses (Travel a lot).
Ended up also doing cli on AMEX so got a total of 39.7 more from AMEX, and got my providian randomly increased to 6k. So total CL as of now is 100.4
Now apparently this thread is more about the house I bought, so I will give a little bit of information on the house Original asking price 299k I got for 269k Leases are from Staples just edited a little, had my attorney look over it and said they are alright. All utilities in the house are split 5ways. Making it litterly free for me to live here I asked about insurance and had to shop around in order to get a company that didn't care that non relatives were living w/ me. I thank you all for the P.O. Box suggestion, but I think I am going to opt to go for a lock and key mailbox as also was suggested.
Yeah, well I think everything in life is a gamble... But what I did is I have about 19k saved up from working past couple years plus scholarships etc that went over what I owed for school.. so instead of using that for a down payment, I figured it would be better to have that as a "back up" fund to cover the months that I don't have renters... And since there is a shortage of housing around UConn I think it was a pretty decent idea..
Along w/ the AOR i figured it was best to do it now since I can't see anything in the near future allowing me to have to use my credit for at least 6 months as I already have a house, and I own my car... But thanks i guess in retrospect it is very unusual haha
This kid is going places. I'm more impressed with the house and finance arangements (basically letting roommates pay for house) than I am the AOR!
Absolutely awsome!
Freakazoid
Thrifty Member
posted: Jan. 7, 2007 @ 8:18p
I agree about the leases. Hopefully it's not costing you a cent to live there.
You're credit scores will likely drop a good amount, but since you have your mortgage, the only other major thing you need to worry about would be a car or refinance.
I did a similar thing a bit after I closed on my house and ended up fine. The problem came when I was in sudden need for a car (at the nadir of my FICO drop). Of course if you have some on hand savings and don't want anything fancy, you're set.
MOZZY
Tired Member
posted: Jan. 7, 2007 @ 8:38p
Be careful of your mail. Especially the new cards which will come in and the frequent BT cheques which will show up sporadically.
b0mbrman
Broke Member
posted: Jan. 7, 2007 @ 9:02p
Engineer said: This kid is going places. I'm more impressed with the house and finance arangements (basically letting roommates pay for house) than I am the AOR!
Absolutely awsome!
Yup, I've been doing just that for years...I'm amazed more people don't do it
Congrats on figuring this out early OP
PolarDude
Senior Member - 1K
posted: Jan. 7, 2007 @ 9:37p
b0mbrman said: Engineer said: This kid is going places. I'm more impressed with the house and finance arangements (basically letting roommates pay for house) than I am the AOR!
Absolutely awsome!
Yup, I've been doing just that for years...I'm amazed more people don't do it
Congrats on figuring this out early OP
With that many roommates, there can be other risks any landlord would have. I have considered doing this also, possibly renting the 5th room out to a roommate, and just collecting rent. I've had flaky roommates in the past, alot will bail after a month or 2, and some bring over weird characters, and lots of drama. I never bothered to pull credit, but my competition didn't either. Some realtors I know, they just collect the Credit app fee, and pocket the money, and approve everyone.
toycats
Member
posted: Jan. 7, 2007 @ 10:00p
GL! You are going to need your AOR monies to cover what happens when the at least one of the other folks renting from your place will be short a month or won't even pay at all. Don't even count the damages done when one comes home drunk and does stuff they won't remember. College student, homeowner, slumlord, AOR king all at age 21. I'm impressed!
sumeyedea
Broke Member
posted: Jan. 8, 2007 @ 12:25a
I don't even know where to start out.. I would quote all of you for praising me... thank you so much...!!
And to answer some questions...
Yeah, I made to sure to run credit checks, along w/ getting first, last, and security deposit from each of the roommates... I figured it was a pretty sweet deal.. I havn't been home yet to update the AOR but thanks a lot for all the compliments guys honestly!! I didn't really expect this much feedback.. and I hope it works out well I'll be sure to update tomorow what the status is..
Also no it isn't costing me a cent to live there.. If anything I am making a profit.. although I think I might be factoring in a little less for repairs... I am setting aside $250 each month for repairs that might occur in the house... I don't plan on touching any of the money I get from the house, other than having it in a high % account for at least a year till it's large enough where I will feel even more secure and then I will start to do other things with it...
As about the mail and the balance transfer checks, I am kind of worried about that, but at the same time I am typically the first one to check the mail so I figure it wont be too bad.. And yeah I know my credit score is going to take a hit, but I'm pretty happy I already have a car, and in my family we have a winter beater i can use if worse comes to worse so I can't say I covered every angle because there are always unknowns in the equations... but I think i took some right steps thanks to FW especially the investment/rental property thread, first thing that got me addicted to this site!
treasurebeacon said: more importantly, I'd like to know where this house is located
in the bay area, to get 600 per room, the house itself costs about 750K+, by the same reasoning, it is impressive that you saved 150K by age 21
but if this is not the case its definitely worth looking into the location
He didn't say that he put 20% down, he said that he got an 80/20 mortgage, which is essentially two mortgages, one standard mortgage for 80% of the home's value and another (usually with a much higher rate) for 20% of the home's value. It's a way of avoiding PMI.
treasurebeacon said: more importantly, I'd like to know where this house is located
in the bay area, to get 600 per room, the house itself costs about 750K+, by the same reasoning, it is impressive that you saved 150K by age 21
but if this is not the case its definitely worth looking into the location
The OP is living in the house and a student at UConn (Go Huskies!), so a logical assumption would be that the house is somewhere in the Storrs area. My guess is Willimantic.
Hopefully you have all your insurance and utilities setup and don't plan on changing insurance policies (car, health, house, etc). I know most of these companies look at your credit report before service and it can effect your insurance rates or require a large downpayment to connect services (my girlfriend had no credit history and had to put down three months for electric and one month for cable/internet).
Congrats on the house purchase and using other peoples money to work for you. I would suggest getting a PO box with all those roommates and your large influx of credit coming in, you can't tell everything from people just on a piece of paper.
raiser14
Member
posted: Jan. 8, 2007 @ 8:53a
treasurebeacon said: more importantly, I'd like to know where this house is located
in the bay area, to get 600 per room, the house itself costs about 750K+, by the same reasoning, it is impressive that you saved 150K by age 21
but if this is not the case its definitely worth looking into the location
dev77 said: what's an aor?lol.. i never post in finance and even i know that one.
App-O-Rama..
Kanosh
Senior Member - 1K
posted: Jan. 8, 2007 @ 10:48a
Good story. Two comments.
1) This confirms my belief that after getting a mortgage is a great time to do an AOR. The worst time would be right before you need a mortgage.
2) OP, You might want to invest in a good mail forwarding service or a PO box. Roommates+inevitable moves after college are good reasons to choose one address that you can use more or less permanently.
YoungCuteFrugal
Member
posted: Jan. 8, 2007 @ 11:25a
Kanosh said: Good story.
2) OP, You might want to invest in a good mail forwarding service or a PO box. Roommates+inevitable moves after college are good reasons to choose one address that you can use more or less permanently.
Another option:
1) Require roommates to get a mailbox or use college box and not allow them to get personal mail at the home. Several renters back in my college town required this when multiple students lived in one dwelling. They claimed it reduced the issue of "lost" and/or "theft" mail.
PolarDude
Senior Member - 1K
posted: Jan. 8, 2007 @ 12:11p
I wonder if having so many roommates would cause a problem if there was a claim on his homeowners, assuming they don't know about them? What if there is a trip & fall type accident, because 1 roommate forgot to clean a mess near a walkway, and another roommate wants to find a deep pocket to sue. What will the insurance co think if they are a resident in the same house as the OP ?
Can't the OP just get a locking mailbox, and get the mail himself each day? I had a PMB for years.. but couldn't justify spending $30/mo plus all the gas, and time it takes to go down there to pick it up. I'm getting rid of it in a few months. Perhaps if a cheap mom & pop PMB place is nearby, that could be an option, but I hope he can trust his roommates.
Can we change terms of the contract to the safest possible. No SUEing nonsense...whtsevr kind of.... OP.. or anyone, can someone post a very carefully thought out contract here... like a pdf... i'm thinking of the same...
PolarDude said: I wonder if having so many roommates would cause a problem if there was a claim on his homeowners, assuming they don't know about them? What if there is a trip & fall type accident, because 1 roommate forgot to clean a mess near a walkway, and another roommate wants to find a deep pocket to sue. What will the insurance co think if they are a resident in the same house as the OP ?
Can't the OP just get a locking mailbox, and get the mail himself each day? I had a PMB for years.. but couldn't justify spending $30/mo plus all the gas, and time it takes to go down there to pick it up. I'm getting rid of it in a few months. Perhaps if a cheap mom & pop PMB place is nearby, that could be an option, but I hope he can trust his roommates.
Just pay the mortgage faster, make some room for equity and get into the HELOC game!
sumeyedea
Broke Member
posted: Jan. 8, 2007 @ 7:33p
treasurebeacon said: more importantly, I'd like to know where this house is located
in the bay area, to get 600 per room, the house itself costs about 750K+, by the same reasoning, it is impressive that you saved 150K by age 21
but if this is not the case its definitely worth looking into the location
Yeah the house cost $269k, originally wanted 299k, the house is actually located in storrs ct about half a mile from campus and it's on the bus line... $600 a room is pretty standard around here for houses... apartments w/ no washer, drier, or dishwasher go for $550 a month... so charging $600 doesn't seem unreasonable... especially considering the location of the house
And yeah what I meant by 80/20 was that I got two mortgages... sorry for the confusion.
sumeyedea
Broke Member
posted: Jan. 8, 2007 @ 7:35p
Kanosh said: Good story. Two comments.
1) This confirms my belief that after getting a mortgage is a great time to do an AOR. The worst time would be right before you need a mortgage.
2) OP, You might want to invest in a good mail forwarding service or a PO box. Roommates+inevitable moves after college are good reasons to choose one address that you can use more or less permanently.
Yeah I just looked into that, makes my life much easier... thanks for the info about the P.O. Box...
sumeyedea
Broke Member
posted: Jan. 8, 2007 @ 7:36p
PolarDude said: I wonder if having so many roommates would cause a problem if there was a claim on his homeowners, assuming they don't know about them? What if there is a trip & fall type accident, because 1 roommate forgot to clean a mess near a walkway, and another roommate wants to find a deep pocket to sue. What will the insurance co think if they are a resident in the same house as the OP ?
Can't the OP just get a locking mailbox, and get the mail himself each day? I had a PMB for years.. but couldn't justify spending $30/mo plus all the gas, and time it takes to go down there to pick it up. I'm getting rid of it in a few months. Perhaps if a cheap mom & pop PMB place is nearby, that could be an option, but I hope he can trust his roommates.
I actually had to go w/ allstate because they are the only one's who don't care who is living in the house, I made sure to ask around called up a couple insurance companies and explain my living situation would be before actually getting one.
markkundinger
Senior Member - 2K
posted: Jan. 8, 2007 @ 11:59p
Sumeye, two thoughts for you:
1) Be real careful not to confuse the 0% money with other money (house money, personal, etc). You don't want to find yourself short in 12 months.
2) The income on $5,000 in 0% money is not going to be very big at all, in the grand scheme of things, not even one month's rent from one of your rentors. If things start to turn into a hassle, you can always just cut bait and pay all of the cards off.
stook2001
Senior Member
posted: Jan. 9, 2007 @ 1:17a
What is the plan for the house after you graduate? You have setup something of a rooming house. The property you own may or may not legally allow such a use. You are in a college town, I guess, but there is probably nothing preventing the town from forcing you to evict your tenants if they were so inclined. With you living there, such action is unlikely. But what about once you graduate? What is the plan for 2yrs from now?
There are plenty of shady property owners who operate for years without issue. Having said that, my ex-wife's father got into some legal trouble with a town for exactly this type of thing. When I was in college I wrote (and won) his county supreme court appeal in the case because he could no longer afford an attorney. If you are caught, these types of issues can get very expensive for the investor. The point is to make sure the property is legit for your intended use when you purchase it. This way your levered investment is secure for your intended use and for the next buyer when you decide to sell.
I am sure you have carefully considered these risks. Afterall, your post was more about the AOR than the house.
PolarDude
Senior Member - 1K
posted: Jan. 9, 2007 @ 1:53a
stook2001 said: What is the plan for the house after you graduate? You have setup something of a rooming house. The property you own may or may not legally allow such a use. You are in a college town, I guess, but there is probably nothing preventing the town from forcing you to evict your tenants if they were so inclined. With you living there, such action is unlikely. But what about once you graduate? What is the plan for 2yrs from now?
There is a shady landlord in my town. He is a handyman, and the guy rigged up this house into about 10 rooms, out of a 4BR house. Some rooms have plumbing and wiring exposed. It is valued over $1MM on zillow. He rents out the rooms for 600-700, and always is advertising the place. I'm suprised he hasn't gotten busted yet, he's been doing it for years.
ls7corvete
Member
posted: Jan. 9, 2007 @ 6:20p
Sounds like my hero.
sumeyedea
Broke Member
posted: Jan. 10, 2007 @ 3:37p
stook2001 said: What is the plan for the house after you graduate? You have setup something of a rooming house. The property you own may or may not legally allow such a use. You are in a college town, I guess, but there is probably nothing preventing the town from forcing you to evict your tenants if they were so inclined. With you living there, such action is unlikely. But what about once you graduate? What is the plan for 2yrs from now?
There are plenty of shady property owners who operate for years without issue. Having said that, my ex-wife's father got into some legal trouble with a town for exactly this type of thing. When I was in college I wrote (and won) his county supreme court appeal in the case because he could no longer afford an attorney. If you are caught, these types of issues can get very expensive for the investor. The point is to make sure the property is legit for your intended use when you purchase it. This way your levered investment is secure for your intended use and for the next buyer when you decide to sell.
I am sure you have carefully considered these risks. Afterall, your post was more about the AOR than the house.
Plan once i graduate is to rent out the house... as to my current knowledge there is no problem w/ renting out the house as long as i register w/ the town as a landlord and meet all there fire safety rules.. I did go to the town hall and asked a lot of questions... So I mean figure as long as i am breaking no rules currently I am fine.. Plus when I was closing on the house, I asked my attorney questions as he is a landlord as well in the area and he told me I should be fine but to check up w/ the town hall periodically.
For 2 years from now, I expect to hopefully just rent it out completely, or if I opt to go to grad school at UConn will be the same situation... But currently it appears a less likely expectation.. I don't see UConn going anywhere anytime soon (except maybe down hill in bball this year) so I figure there will always be a strong market for rent.. especially since there are very few apartments given the size of the school, and also very limited on campus housing available...
You may trust your current roommates...but what about the next batch? What do you do for summer breaks??? It will be hard to study for finals AND find tenants for the summer months!!!
hotcouponmama
Senior Member - 2K
posted: Jan. 25, 2007 @ 11:29a
Great job on buying the house and getting others to pay for it. I found a house that I feel in love with in college - it was $200K at the time. I went to my dad to see if he would co-sign and I told him I would cover the payments. I had some money to put down on the house. He refused and thought I was out of my mind, that I didn't know what I was thinking and real estate was complicated. Ten years later, the house sold for 800K and is worth close to a million now! One renter in the house plus what I was paying to live in the dorms would have covered the payment! Something we'll definitely help our kids with...nice to see you could swing it on your own. Congrats!!
hotcouponmama
Senior Member - 2K
posted: Jan. 25, 2007 @ 11:32a
dgoedken said: You may trust your current roommates...but what about the next batch? What do you do for summer breaks??? It will be hard to study for finals AND find tenants for the summer months!!!
What he isn't paying himself over the course of a year, if he saves it he should have enough to cover the summer month and contingency. Living in the dorms these days is can be as high as 500++ ore more a month. So whatever he was using for rent before, it makes sense that if he threw that money in an interest earning account, he could make the payment for 3 months. And, not everyone goes home over the summer.
Skipping 9 Messages...
sumeyedea
Broke Member
posted: Feb. 14, 2007 @ 3:26p
disseminate said: sumeyedea said: dgoedken said: You may trust your current roommates...but what about the next batch? What do you do for summer breaks??? It will be hard to study for finals AND find tenants for the summer months!!!
Yes and no, how it always works out as from what I have seen, and have dealt with personally, the leases are 12 month leases.. so that covers summer, and the demand for housing is significantly high that most kids want to get good housing before they are left with the apartments that no one wants to live in (that still end up filling up because of the demand). So you put a add in the paper begging of the semester and by mid semesters you already have it filled up, and already have the deposit and everything on hand
Hey, good job on the house. I went to UConn and thought about doing it but never did. What general area is your house in?
It's on hunting Lodge Rd, right next to carriage and celeron.
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