All Forum Posts by: Steve Vaughan

NOI on a single-family to me is just a fancy term for helping me calculate my cash available to service debt and make a profit monthly (cashflow). NOI in multi's over 5 units help me and the market assess value. Just one metric of at least 4, as you know.

I am for owning real estate outright over time. I look forward to the day when I own a bunch of real estate free and clear, but I would not do this business for a 9% COC return. Too much hassle and too much risk, even without debt. By paying all cash, you have to assess your return against all investments that return 9%. There are other factors like depreciation limiting your taxable income that affect your IRR, but apples to apples, I would rather own an oil pipeline ETF that has a solid yield of 6.8% and doesn't involve tenants and toilets.

I know exactly what you're talking about, being an old paper security (stock market) investor.  I would apply that concept to my savings account or my 'future real estate purchase account'. Put in a set minimum amount of savings monthly to reach your down payment or RE purchase goals.  If your time horizon is less than 5-yrs, I would just accept that money will earn no interest and put in a money market or acct with a bank paying nothing.  Like @Arlan Potter points out, good deals below market value need to be snapped up.  Unlike in the stock market, real estate can be purchased at a discount.  We always try and make money at the buy!  Define your savings goals and dollar-cost your additions to it!

@Paul Ewing , I think so, yes!  I bought some for my on-site folks and repairman friends, too.  They can get stuck when you go to pull them out so I pull the lav stopper rods and snake carefully around the tub drain.  Better than pulling the tub overflow cap and snaking down like the old days!

I just started to add clauses regarding freezing pipes and clogged drain lines.  I self-manage and self-repair 90% of problems.  Would be different if a PM is sending over a plumber at $80/hr or whatever. If it's a simple clog in the lav or tub, I just go take care of it, usually with a little $3 zip line thing.  Gives me a chance to see the unit and interact with the resident anyway.  With sewer lines on a single-family I have had the tenant share the bill if the clogging culprit is their fault (a t-shirt, feminine stuff, baby wipes).  With multi's we don't know whose fault directly, so reminder memos go out to everyone about what not to flush and that these extra repairs are considered at rent-raise assessment time.   

Sounds like you have laid some good groundwork. Got some cash, a potential partner, a fixing/contractor contact in your father. Focus. Don't need a license at this point, but you do need a deal. You seem to be a good fit for a fix and flip. Great way to put some cash in your pocket if it works out. Drive for dollars. Listen to some podcasts. Don't be in too much of a hurry. The hard money if you need it will depend on the deal. I have never used it because of the strict deadlines and high cost. Know your market and get good ARV comps and repair estimates for your deal. Outline some longer-term goals. Be extra careful using partners and family! Good luck and keep us posted!

As a landlord, my clients are my tenants.  As an investor seeking new purchases, my clients are homeowners/sellers.  To get to the sellers, you may have a subset of clients like title co's, lenders/banks, real estate brokers, attorney's, insurance providers, etc.  I know what you mean trying to fit your investing into a normal business model.  We aren't just selling widgets!

I agree with @Joe Villeneuve . Also, cash buyers get discounts! Most sellers will prefer a P&S that doesn't have any financing contingencies and will accept less for the privilege.

My wife and I quit-claimed to each other our interest in the properties where only one of us is on the loan.  We then drew up a simple community property agreement and recorded it to protect us both.  Her loans don't show up on my credit, nor mine hers.  WA is a community property state, though.  Don't know if CA is, but I imagine it is.  No legal advice, just what I have done.  Good luck!

I order an O&E (owner and encumbrances) report after first doing some basic title searching on my own.  Here it costs about $100 and they e-mail it to me. The local county courthouses are very helpful I have found and gladly answer questions regarding searches.   Lots of online resources out there now. Much easier than it used to be!