Posted by Brent_IL on December 26, 2001 at 11:57:59:
10% is probably o.k. I use 1 to 1.25 of FMV annually. The repairs come in lumps, so if FMV goes up, so does the maintenance reserve.
Most AITD’s (the wrapping second) are wrapped around bank loans because holders of private firsts are more open to renegotiating. There a lot of discussion about the advantages vs. disadvantages of wraps in the archives.
wrap around mortgage with commercial bank loan? - Posted by John Long
Posted by John Long on December 25, 2001 at 15:22:09:
I own a property 450 miles away. Nice property, cash flowing $287 per month. Is 10% of the rent ($700) enough to set aside for maintenance?
After this tenant leaves, I may be thinking about selling, but it would be nice to still have income from the property and not be worried about maintenance and tennants. Listening to John Burley and Robert Kiyosaki on tape describe wraps sounds good to me. There is a Bank mortgage on the house. Can a person do a wrap with it still in place? How long a term could I keep on it? Are there any downsides to doing a wrap?
Thanks, John L.