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Buying Condo with Cash - Some Questions

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I am planning to buy a condo (300k) in Chicago mainly for investment purposes, the building has number of units owned/leased by investors and getting loan from Freddie/Fannie will be very difficult.

some other items for background purposes:
-My primary home is already paid-off and have no outstanding debt. 
-I have tenant already identified for the property which should show that I will be able to make the payment


As this is cash transaction, I am worried and concerned about the clean title and transfer of ownership. I have real estate attorney and they provide me following details. Is this enough or anything else needs to be added:

1.  The Seller buys a title insurance policy for you.
2.  The title company will not allow the transaction to close unless there is good title and if they make a mistake, you have a claim against the insurance.
3.  The Seller provides you with an Affidavit of Title that his statement that he has not put liens on the property that might otherwise not show up on title.
4.  The Seller give you a Warranty Deed, which warrants that title is good.

Are there any other concerns or precautions I should take considering this is cash purchase.

Thanks in advance, and please advise.

Edit: removed confusing item

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If I cherry picked anything, it was simply that I used realistic numbers based on the market in the building in which I ... (more)

DTASFAB (Aug. 28, 2017 @ 3:44p) |

Why not? Rental income is income. Or is it only enough to sustain your retirement?

scripta (Aug. 28, 2017 @ 5:19p) |

typically they only give 75% of rental income.

plus my finances are complicated from rentals, tax sales, tax liens, flips... (more)

solarUS (Aug. 28, 2017 @ 5:59p) |

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fatuser789 said:   
1.  The Seller buys a title insurance policy for you.

  That's kinda like the seller of a used car telling you he will take it to his mechanic to check the car out for you. The insurance is for your benefit. YOU should be the one buying it. You don't think the seller will find the cheapest possible policy with plenty of loopholes?

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atikovi said:   
fatuser789 said:   
1.  The Seller buys a title insurance policy for you.

  That's kinda like the seller of a used car telling you he will take it to his mechanic to check the car out for you. The insurance is for your benefit. YOU should be the one buying it. You don't think the seller will find the cheapest possible policy with plenty of loopholes?


Some states are like that. Sometimes the seller pays for the title insurance and sometimes the buyer pays for it. It's great here when a national bank sells a foreclosure property and pays for the title insurance when normally it's the buyer that pays, just depends what the bank is used to doing.   

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That's a good point. I will mention this to attorney that I would like to select the tittle insurance company and the seller can reimburse me.

Any other items?

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I'm confused - this is a cash purchase, but you're only ready to pay 20-30%?

Regardless of who actually pays in number 1, 1-4 seem rather standard in any real estate purchase?

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fatuser789 said:   That's a good point. I will mention this to attorney that I would like to select the tittle insurance company and the seller can reimburse me.

Any other items?

  The only risk here is the unethical real estate agent on the other side and the whole title co scam setup.  Usually they specify a title agent in the listing (selected by the listing agent NOT the seller, that's why the whole title co setup is such a racket - usually the actual customers dont shop around or select them, but just "trust" their Realtors who don't care because they're not the ones paying.).  The title agent listed is one of their "friends" who might refer others back to the listing agent.  If you specify your own title agency in the offer (which is where it's specified usually), the listing agent may strongly advise the seller it's a bad idea to allow the other title agent because "they trust" the one they had selected and handicap your offer when presenting to the seller.  

If there's one specified already you have to weigh the possibility versus the wasted funds just going with the one specified.  Possibly better off just lowering your offer by the expected fleecing $$ and using the one the listing agent wants.  (Or possibly not)

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Is your family giving you half of the money in cash?

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My mistake, this is full cash payment and no one is paying me.

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Slightly off-topic, but I'm curious how much is the monthly rent?

The ROI is usually worse without a mortgage. Keep in mind that your purchase price should be less and your sales price will be less than similar properties that don't have the all-cash requirement (usually happens when > 50% of the units in the complex are tenant-occupied).

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scripta said:   Slightly off-topic, but I'm curious how much is the monthly rent?

The ROI is usually worse without a mortgage. Keep in mind that your purchase price should be less and your sales price will be less than similar properties that don't have the all-cash requirement (usually happens when > 50% of the units in the complex are tenant-occupied).

  Monthly rent is around 1800-2000. Compared to other recent sales in the same building, it seems that I am getting much better price. 

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Title is from Chicago title, which is supposed to be one of the top title companies in the city. Seller is the original owner since the building was built. Any experience or feedback on the title company?

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Chicago Title is huge, should be fine. Since you may have a choice, entitledirect is often recommended here for being one of the cheapest.

Is there a monthly HOA fee? How much is it? Only one other concern I'd have is if a bunch of units were owned by the same entity that could take over the HOA.

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scripta said:   Chicago Title is huge, should be fine. Since you may have a choice, entitledirect is often recommended here for being one of the cheapest.

Is there a monthly HOA fee? How much is it? Only one other concern I'd have is if a bunch of units were owned by the same entity that could take over the HOA.

  Yes, the monthly HOA fee is around 330. This is high rise building with many units and not sure whether they will have enough control to take over HOA. But, I will ask attorney to verify it as part of attorney review.

Any other precautions for a cash purchase? I am nervous and want to make sure I perform the necessary due diligence.  

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For a condo, I would make sure to review the condo documents/bylaws, ask the trustees for a copy of their latest reserve analysis, ask for a history of past assessments and planned future assessments and, if possible, get a copy of trustee meeting notes.

Are you getting an inspection? Obviously a condo is a different case than a single-family home, but the inspector could still identify issues with the unit and the building structure, roof, etc.

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I worry about cash reserves and maintenance reserves.  Who is on the board?  Are they business minded or qualified to be business like?  Is there an outside accountant/auditor like a corporation that you invest in?   Study up on the HOA terms and covenants. Can the tenant put nails in the walls to hang photos, paintings etc. Most condo common walls are owned by the HOA .. not the owner of the unit. What maintenance is the responsibility of the unit owner vs the HOA? What happens when the kids above or adjoining your unit overflow the bathtub or a pipe breaks? Is the electric system adequate for your tenant. How much sound proofing is in place between units? Will your tenant be allowed to use the common amenities or have overnight guests?

Set aside an emergency fund for the investment property in addition to your personal emergency fund.  Add a few years HOA fees and expenses.  Keep good records for your taxes.

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Another question. I am thinking of registering condo on the name of llc instead on my name. Is this a good option?

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You can if the time and expense of a proper LLC makes sense to you. If you don't do it right, you could lose the liability protection that an LLC is supposed to provide.

You can also look into trusts. A trust could own the property with your LLC being the beneficiary. We have some old threads here discussing this.

The most common recommendation lately is to skip the LLC and just get adequate insurance (landlord + umbrella). But, unlike most people, you are not getting financing, so you have the trust and LLC options.

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scripta said:   You can if the time and expense of a proper LLC makes sense to you. If you don't do it right, you could lose the liability protection that an LLC is supposed to provide.

You can also look into trusts. A trust could own the property with your LLC being the beneficiary. We have some old threads here discussing this.

The most common recommendation lately is to skip the LLC and just get adequate insurance (landlord + umbrella). But, unlike most people, you are not getting financing, so you have the trust and LLC options.

  I am not sure that I will have enough time to form LLC and get closing done by end of this month. 

So, I was thinking of getting landlord insurance and umbrella coverage to protect me against any issues. As there is no financing, I am more concerned of unnecessary litigations and protect my other stuff. 
 

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If you want to avoid unnecessary litigation, you have to make it difficult or expensive. One way to do this is by making it difficult to find you or to attach the property to you.

A standard purchase is public record and will forever be tied to your name (a historical record search will show your name even if you aren't the current owner). If the property is purchased by a trust (one that doesn't have your name in its' name), nobody will know that you own it unless they get a court order to see the (non-public) trust documents. To be more precise you wouldn't "own" it, you'd just be the beneficiary of a trust that owns it. After the purchase, you (well, not you -- the trustee) could update the trust document (which is not public) to make your LLC the beneficiary of the trust.

Again I'm not recommending any of this, just relaying the info I've read.

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Can i just do the land trust and not go through the hassle of creating llc.

Refer to link below, it still provides the veil and privacy. With this coupled with landlord insurance and umbrella, it should be fine right?

http://www.ctlandtrust.com/faq.htm 

Identity Protection/Privacy Of Ownership/Internet Privacy

Under a land trust, unless required by law, the identity of the real owner is not disclosed to the public, keeping parties involved confidential. This can help keep an owner’s personal, financial information out of the public record and off the internet.


Or after the closing is done under Trust, I can use the following steps to create LLC at my own convenience.

  1. Deed the property to your land trust. (On state records Property is shown as  ABC Trust) - At the time of closing..
  2. Create an LLC - After closing is completed, and then work to create LLC
  3. Make yourself as Trustee of Land Trust
  4. Wife and husband to be beneficiary of Land Trust
  5. Transfer Beneficial interest to your LLC
  6. LLC Benefificarys are both yourself and your Wife
  7. Have an Operations agreement which talks about charging order (Covering outside protection)

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I'm pretty sure that (1) a trust does not provide any "veil", as in, it doesn't limit liability like an LLC does, and (2) the name of the trustee is public record, which partially defeats the privacy protection. You need someone else to be the trustee if you want the full privacy that a trust can provide.

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Got clarifications from the attorney; When the deed is recorded, the Land Trust (Chicago Title Land Trust) is named as the owner under the Land Trust Number. It will be like "CTLT Trust 1111 dated Sept 2017"./ CTLT is the trustee, and the beneficiaries could be me and/or my wife, and could also name successor beneficiary or beneficiaries. I will still have landlord insurance with umbrella insurance,

I hope this make sense.

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Did lot of reading and this is most concise paragraph on land trust and llc:

Land trusts are an excellent tool in the investor’s arsenal, but the investor must be savvy enough to fully utilize the trust’s benefits. Not only will the trust provide the investor the desired level of anonymity, but if used in conjunction with an LLC, it will afford the investor excellent asset protection. If anonymity is the only concern then the land trust can achieve this result. However, for the investors that also desire protection, the land trust must be used in conjunction with entities that provide asset protection.

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at 300k and 1.8-2k rent with a 330 COA fee, this isnt a rental investment, this is just speculation. you could get a better return on a muni bond.

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solarUS said:   at 300k and 1.8-2k rent with a 330 COA fee, this isnt a rental investment, this is just speculation. you could get a better return on a muni bond.solarUS is not wrong, OP, no need to give him red. Your ROI excluding appreciation will probably be about 4%. If housing prices start moving down or don't keep up with inflation, your ROI will be < 4%, and if they keep going up at the rate of inflation, it's exactly 4%. If you expect more, you are betting on appreciation above the rate of inflation, which is speculation.

The ROI would be a lot better if you had leverage (mortgage).

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scripta said:   
solarUS said:   at 300k and 1.8-2k rent with a 330 COA fee, this isnt a rental investment, this is just speculation. you could get a better return on a muni bond.
solarUS is not wrong, OP, no need to give him red. Your ROI excluding appreciation will probably be about 4%. If housing prices start moving down or don't keep up with inflation, your ROI will be < 4%, and if they keep going up at the rate of inflation, it's exactly 4%. If you expect more, you are betting on appreciation above the rate of inflation, which is speculation.

The ROI would be a lot better if you had leverage (mortgage).

As there is no mortgage, am I not saving on the mortgage interest payment. I am confused on the last statement? Additionally, I had rounded up the investment amount, its more around 260k, without being too specific.
 

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At 260K my estimate would put it closer to 4.5% then.

Your cash-on-cash return would be higher without a mortgage. I calculate ROI assuming the property value doesn't change as: (cash flow + principal reduction) / (initial investment), so when interest rates are low, the ROI can be higher when the initial investment is lower. With 25% down and a 30-yr fixed mortgage at 4.125%, for example, the ROI for the first year would be approximately 8.5% and it would increase every year after that (because principal payments increase as you pay down the mortgage). I don't know if anybody else calculates ROI this way, because the true ROI could not be calculated until the property is sold. My calculation assumes that the property value doesn't change and I use it for comparing different properties. Another reason ROI is better with a mortgage is because the interest expense plus depreciation is likely to exceed rental income and helps offset income taxes (unless your income exceeds the passive activity loss limitation), but without a mortgage the depreciation won't exceed rental income.

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scripta said:   
solarUS said:   at 300k and 1.8-2k rent with a 330 COA fee, this isnt a rental investment, this is just speculation. you could get a better return on a muni bond.
solarUS is not wrong, OP, no need to give him red. Your ROI excluding appreciation will probably be about 4%. If housing prices start moving down or don't keep up with inflation, your ROI will be < 4%, and if they keep going up at the rate of inflation, it's exactly 4%. If you expect more, you are betting on appreciation above the rate of inflation, which is speculation.

The ROI would be a lot better if you had leverage (mortgage).

I inherited a townhouse style condo from my father five years ago.  Got it appraised for estate purposes and pocketed the exact appraisal amount plus about $200 when I sold the condo less than two years ago.  I did not like condo ownership.

The building I wanted to move into is an 8-story mid-rise apartment condo, but I only wanted to rent, not buy.  At the time of my sale closing (on the property I inherited) I wasn't able to secure a lease in the building I really wanted to be in, so I used a more upscale and expensive corporate rental only highrise building as a fallback.  I signed a 15 month lease and lived there without issue for those 15 months.  Then a 1-BR rental unit became available in the condo building I wanted to be in from the beginning, and I'm living here now.  My apartment here is 20% bigger with 2.5-3 times as much closet space as where I lived for those 15 months prior.  The kitchen appliances and view aren't quite as nice, but I'm also only a 3/10 mile walk from my office now, so I'm much happier here.  Overall, this building is probably 85-90% as nice as the more expensive rental-only building, with a much lower snobbiness factor.

The 1-BR units in this building typically sell for around $350K and market rate for rent is $2000-2500, depending on factors such as overall square footage (not all 1-BR units have identical floor plans) and number of assigned parking spaces.  I'm paying $2250.  Common charges are around $450-500/month and property taxes are about $4-5K/year.  I don't know if my LL has a mortgage or not, nor do I really care, but after crunching the numbers, assuming no mortgage, he has $350K in dead money that can't be invested elsewhere, and he's making a return of roughly $16,500 in profits ($27K in rent - $4.5K taxes - $6K common charges), which is an annualized return of 4.7% on that otherwise dead $350K.  It's not bad, but it's not great.  It's better for him because I'm a good tenant, I pay rent on time, and I take care of the apartment.  Still, he is responsible if anything breaks due to normal usage, wear and tear, age, etc.  With a good tenant, this is a net-positive investment for him.  With a bad tenant, it would look a lot uglier.

In another nearby city with a slightly different rental market, there's a co-op building that's somewhat similar to the building I'm living in and allows rentals.  Those 1-BR units sell for about $240K and rent out for $1800-2000/month.  When the monthly rent is more than 80 basis points of the sale value, it's probably a pretty good RE investment, assuming the place is in decent shape, the HOA doesn't cause too many headaches, and the tenant is good.

In short, OP better make sure the apartment passes every facet of the most thorough inspection possible and that he then ends up with a good tenant.  Otherwise I don't think it's a good investment, because the time, effort, energy, and stress involved with being a LL of this type of rental with a bad tenant is simply not worth it.

Also, and I cannot stress this enough, OP has to make sure the condo board won't have the ability to prevent him from renting the unit to a prospective tenant after closing the sale.  In my current building, it's about 60% owner occupied, but that number was lower a couple years ago.  I never investigated too thoroughly because I didn't particularly care, but I believe the by-laws here allow the board to suspend new rentals if the new lease would push the number of tenant occupied units over 50%.  All rentals have to be board-approved and the tenant(s) are investigated through background checks, so there's no way to get around this, at least not on the up-and-up.

As a side-note, since my current building opened over 10 years ago, they've never had a quorum.  It's kind of pathetic.

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Thanks for the great feedback, really appreciate it, as it allows me to learn. Couple of other points:
1. I am planning to get cash-out refinancing from my primary home (paid-off), so I can still use interest deduction.
2. Going to verify all the condo docs, and great points about future rent agreements. I am sure there is no rental cap, but will get it confirmed in attorney review
3. The main reasons why I am doing this:
- House prices increasing (probably not counting for substantial, price i am paying is relatively less compared to other recent sales)
- payments go to principal (which would be profit in the form of assets, At $2000 rent per month, this will be somewhat cash positive.

Another side but related question:
1. All the expenses that I incur in finding, managing, property/tenants, can be expensed right?
2. Can I also include other expenses such as internet and other expenses which could be indirectly used to find/manage the rental property?

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my $.02 - OP, you are not ready to be a landlord. too many 101-level questions. do some more research.

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fatuser789 said:   
3. The main reasons why I am doing this:
- House prices increasing (probably not counting for substantial, price i am paying is relatively less compared to other recent sales)
- payments go to principal (which would be profit in the form of assets, At $2000 rent per month, this will be somewhat cash positive.
 

Uh, no. no, and no..

I would strongly urge you to listen to the veterans here. 

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fatuser789 said:   
scripta said:   
solarUS said:   at 300k and 1.8-2k rent with a 330 COA fee, this isnt a rental investment, this is just speculation. you could get a better return on a muni bond.
solarUS is not wrong, OP, no need to give him red. Your ROI excluding appreciation will probably be about 4%. If housing prices start moving down or don't keep up with inflation, your ROI will be < 4%, and if they keep going up at the rate of inflation, it's exactly 4%. If you expect more, you are betting on appreciation above the rate of inflation, which is speculation.

The ROI would be a lot better if you had leverage (mortgage).

As there is no mortgage, am I not saving on the mortgage interest payment. I am confused on the last statement? Additionally, I had rounded up the investment amount, its more around 260k, without being too specific.

  
The cash on cash returns are higher with a mortgage because you have leverage. If you make $10k a year with a $250k investment, the return is lower than if you make $8k a year with a $75k investment

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gnopgnip said:   The cash on cash returns are higher with a mortgage because you have leverage. If you make $10k a year with a $250k investment, the return is lower than if you make $8k a year with a $75k investmentWhile it is true that 10/250 < 8/75, your argument is not correct -- cash-on-cash is not higher with a mortgage in any scenario I've ever seen.

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Most condos have a maximum number of units that are allowed to be leased to non-owners and often a waiting list. The reason for this uniformity is FHA compliance for FHA backed loans. (it can be as much as 50%, or as low as 0% -- but it must be specified in the bylaws and tracked)

Since being able to claim FHA approval is a Big Deal for resale value and loans, it is standard boilerplate.

We usually have a quorum at the annual meetings, mainly due to both an active building and a standard Proxy.

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RedWolfe01 said:   Most condos have a maximum number of units that are allowed to be leased to non-owners and often a waiting list. The reason for this uniformity is FHA compliance for FHA backed loans. (it can be as much as 50%, or as low as 0% -- but it must be specified in the bylaws and tracked)

Since being able to claim FHA approval is a Big Deal for resale value and loans, it is standard boilerplate.

We usually have a quorum at the annual meetings, mainly due to both an active building and a standard Proxy.

  
FHA is big in your area, but not that big in our area. Actually most Realtors in this area hate FHA and many of the units I deal with don't qualify. Most complexes around here don't actually have a limit on the number of units that can be rented and lots of investors are grabbing investment properties so that over the last few years, properties that used to be over 50% owner occupied have dropped below 50%.  

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scripta said:   gnopgnip said:   The cash on cash returns are higher with a mortgage because you have leverage. If you make $10k a year with a $250k investment, the return is lower than if you make $8k a year with a $75k investmentWhile it is true that 10/250 < 8/75, your argument is not correct -- cash-on-cash is not higher with a mortgage in any scenario I've ever seen.
huh???

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solarUS said:   
scripta said:   
gnopgnip said:   The cash on cash returns are higher with a mortgage because you have leverage. If you make $10k a year with a $250k investment, the return is lower than if you make $8k a year with a $75k investment
While it is true that 10/250 < 8/75, your argument is not correct -- cash-on-cash is not higher with a mortgage in any scenario I've ever seen.

huh???

  He's saying that on any one specific rental property, positive cash flow is counter-balanced by the necessity of paying the mortgage lender monthly.

For instance, using my LL's apartment values, if he has no mortgage, he's turning a nice >$1000 profit every month.  But let's say he owes $200K on his mortgage and is making a $975 mortgage payment every month.

Now instead of making a $16,500 profit every year, we have to deduct $975 x 12 monthly payments, reducing that profit of $16,500 by $11,700, meaning he's now earning a profit of $4,800 annually on the $150K of equity he has tied up in the property.  Now his annualized rate of return just dropped from the 4.7% explained in my previous post to only 3.2% in this one.  And that's assuming he's still cash flow positive.  If his mortgage payment is higher (it could be) or property taxes and common charges both go up significantly in the same year, he might be breaking even, or worse.  If the rental market declines and I threaten to leave if he doesn't knock the rent down by $300/month, his investment could quickly turn into a money pit for him.

One of my neighbors bought a smaller 1-BR unit than I'm renting and got a decent deal when she paid $335K.  Between common charges, property taxes, mortgage payments, and utilities, she's paying as much or more than me.  Sure, she's building up equity, but she's also paying a ton of interest that she won't even get to deduct unless she itemizes.

Rental investment properties aren't the greatest type of investment.  Unless you're going to make up for it with quantity, which comes with its own set of potentially big headaches, it's usually better to just put cash in a well-diversified portfolio of low cost mutual funds.

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DTASFAB said:   
solarUS said:   
scripta said:   
gnopgnip said:   The cash on cash returns are higher with a mortgage because you have leverage. If you make $10k a year with a $250k investment, the return is lower than if you make $8k a year with a $75k investment
While it is true that 10/250 < 8/75, your argument is not correct -- cash-on-cash is not higher with a mortgage in any scenario I've ever seen.

huh???

  He's saying that on any one specific rental property, positive cash flow is counter-balanced by the necessity of paying the mortgage lender monthly.

For instance, using my LL's apartment values, if he has no mortgage, he's turning a nice >$1000 profit every month.  But let's say he owes $200K on his mortgage and is making a $975 mortgage payment every month.

Now instead of making a $16,500 profit every year, we have to deduct $975 x 12 monthly payments, reducing that profit of $16,500 by $11,700, meaning he's now earning a profit of $4,800 annually on the $150K of equity he has tied up in the property.  Now his annualized rate of return just dropped from the 4.7% explained in my previous post to only 3.2% in this one.  And that's assuming he's still cash flow positive.  If his mortgage payment is higher (it could be) or property taxes and common charges both go up significantly in the same year, he might be breaking even, or worse.  If the rental market declines and I threaten to leave if he doesn't knock the rent down by $300/month, his investment could quickly turn into a money pit for him.

One of my neighbors bought a smaller 1-BR unit than I'm renting and got a decent deal when she paid $335K.  Between common charges, property taxes, mortgage payments, and utilities, she's paying as much or more than me.  Sure, she's building up equity, but she's also paying a ton of interest that she won't even get to deduct unless she itemizes.

Rental investment properties aren't the greatest type of investment.  Unless you're going to make up for it with quantity, which comes with its own set of potentially big headaches, it's usually better to just put cash in a well-diversified portfolio of low cost mutual funds.

  Great explanation. Hopefully, I can be in that position for some time, with 2k rent and no monthly mortgage payments to make. I am sure, there will be many bumps along the way, and many more things to consider, but I am quick learner and will quickly adapt to the conditions. 

On the other items, verified with the attorney and also reviewed the declarations:
1. No rental cap in the building, there are some standard conditions on the length of the lease, but nothing crazy
2. Minimum move-in fee for new tenants, and deposit requirement (refundable)
3. Have the tenant already lined up, so will start getting rent as soon I complete the purchase.
4. Getting deed registered with the Land Trust, and will eventually change beneficiary to LLC but I get the anonymity right away.

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henry33 said:   
RedWolfe01 said:   Most condos have a maximum number of units that are allowed to be leased to non-owners and often a waiting list. The reason for this uniformity is FHA compliance for FHA backed loans. (it can be as much as 50%, or as low as 0% -- but it must be specified in the bylaws and tracked)

Since being able to claim FHA approval is a Big Deal for resale value and loans, it is standard boilerplate.

We usually have a quorum at the annual meetings, mainly due to both an active building and a standard Proxy.

  
FHA is big in your area, but not that big in our area. Actually most Realtors in this area hate FHA and many of the units I deal with don't qualify. Most complexes around here don't actually have a limit on the number of units that can be rented and lots of investors are grabbing investment properties so that over the last few years, properties that used to be over 50% owner occupied have dropped below 50%.  

  
Realtors everywhere hate FHA.  It doesn't stop them from chasing commissions.   The way it works is that no property is "FHA" until they ARE.  The first buyer in a complex has to go through the process and once they have it certifies the whole property.  So when the market gets tight/rates soar and FHA/VA loans become competitive then properties start getting certified as buyers apply for the loan.

I would NEVER buy in a property with no limit on rentals if I plan to actually LIVE there.    You might as well live in an apartment complex, even better when you get crappy neighbors in an apartment (and you almost always do) then you can move.  I have had the same neighbor on one side for 12 years.  The other side... not so much.  Just sold for 3rd time in 12 years.   The difference in a property that is mostly owners is astounding.  FHA allows up to 50%, so really there is no reason not to add one line in the bylaws to cover that base.  Mine happens to be 10%, I would be fine with 20.

You sound like you are in Florida or one of the markets like CA where there are too many speculators.

Skipping 26 Messages...
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scripta said:   solarUS said:   ... well, if I still had a w2 I would 😃. no bank would touch me now!Why not? Rental income is income. Or is it only enough to sustain your retirement?
typically they only give 75% of rental income.

plus my finances are complicated from rentals, tax sales, tax liens, flips, owner finances, massive depreciation, brokerages, etc. the last mortgage I got awhile back, I talked to several lenders before anyone would even agree to look at me. now i wouldnt even try.

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