First time posting here and new to this site.
Here is what I am working on and I would love your thoughts.
I have been talking with an investor who owns 20+ houses and he is getting tired of being a landlord. I have started talking about buying some or all of his properties. He would finance the deal possibly with no money down. All houses are rented and many have long term renters. The rental market here is strong. If you could do a deal on 20+ houses with no money down, would you? This seems like a good deal to me but what am I missing.
@Luke Burgess 1st Welcome. I have roots in Laramie so I am familiar with the area.
Anyway, generally no money down, owner financing opportunities mean that you are a big fat slow guppy swimming with a shark. Now I'm not sure how many real sharks there are in Laramie but all it takes is one to take you for a ride.
Things to look for are
1) Over priced properties.
2) Deferred maintenance (really just a variation of item 1 above)
3) Inflated interest rates (another variation of item 1 above).
What experience do you have renting property? How would you maintain those properties. 20 units is a significant part time job if they have been maintained. If they haven't been kept up you might need a whole crew.
What kind of reserves do you have?
Finally, why is this guy wanting to sell? Why is this guy willing to sell to someone with not much experience? Why does this guy not just sell them via a local agent? Maybe you don't need to ask him these questions but I would definitely want to know the answer.
Thanks for the imput Bill
The properties are not over priced... but they are reatail priced. They will all cash flow anywhere from 100-700 a month.
He has been selling of houses one at a time for a while and is in no hurry to get rid of them all. I approached him with the offer to buy. I buy no means have to buy them all, I could just pick the ones I like to buy.
Rentals don't scare me...that much. I have some reserves if things get a little sideways.
I just want to make sure I do my due dillagance and being my first deal I am not sure all the questions to ask the ower or myself.
@Luke Burgess Welcome to BP from your neighbor to the North. There is a lot to buying a portfolio. You need to find out the value of each house. You need to know how much money is held in escrow for the renters. Remember Laramie has lots of laws on tenants rights, so you must have your deposit money back pretty quick. If you rent to students the cost of clean up/ touch up, and refurbishing after a house full of college kids can get pretty expensive in a short time. You really need records of how old the paint job is, how old is the plumbing, electrical, roofs, water heaters, etc. These are all issues you will deal with sooner or later. You will probably have to pay market or even more in price if you get it for no money down. Find out maintenance costs and insurance and taxes. How much is rent?
You may have a great deal, but make sure its good for you too. Bill above gave you some great things to think about. Good luck. Jerry
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