All Forum Posts by: Steve Vaughan

Hi @Tasha Mckoy . A realtor that's also an investor? Wish I had a good one here! I did a 2-second analysis on your spreadsheet and said 'no thanks'. Not even factoring in rent control, I need my multi's to be as clost to 100x monthly rent as I can get. I have purchased fancier A+ buildings in A neighborhoods for more, but only short-term. Add value through mgt or tenant changes and sell. They don't pencil out for me as buy and holds. That being said, it is hard to purchase for 100x rent, even in my area. Cap rates here are closer to 9-10% and hard to find at that. Cap rate in general as you know, is not the primary valuation factor in small multi's, either. It's comps. In your area, you seem to be facing higher prices, lower COC returns. Since you know this is a reasonable price for your area, I would look into the seller's situation and maybe educate her with some numbers like your spreadsheet. 40% down is a lot. Does she need the money or just more security? I have given sellers references of other sellers I have worked with and my personal financial statement to ease the fear of default they have, reducing my down payment. Is this your first investment? Good luck and please keep us posted!

I had a hard time relating to the video, not being a confused, demanding, indecisive newb trying to buy my first house. I buy properties without an agent. "Seems like a nice house, Why are they selling?" I have to have to ask my BA to ask the LA, to ask the seller, who gets back to the LA who gets back to my agent who gets back to me. "Are their payments current? Facing any deadlines?" And the process drones on... I have purchased quite a bit of listed property so I have interacted with REA enough to get an idea of whose out there. They tend to be more concerned with being your next buyer's agent than answering questions about their listing. Most are just in the way, to be honest. I hardly look at the MLS anymore. I almost got my license once, but chose not to become an agent specifically because of the indecisive, show me everything and talk to me and hold my hand constantly time suckers that are out there. So, I feel bad for agents that have to deal with cart around, never buy clients and I wish there were was ONE out there was efficient and knowledgeable that wouldn't try to up-sell me, too!

That's great you are at least willing to put a little money into your RE education! Like @Bill Gulley states, save some $ and disappointment by listening to BP podcasts, read books and learn for free from all the free resources that are out there. There are many podcasts that are specific to the type of REI you seek. As you learn, you will find out you don't know what you don't know, and there are other strategies available to you as well. Turn off the tv, fill your phone or player with info instead of beats and learn, learn, learn!

I, like you @Jon Huber am willing to pay a premium for getting into a property easier. My limit would be about $2k for a SFH provided I didn't have to qualify for yet another loan. The seller also has to be knowledgeable enough I don't have to hand-hold every step of the way. If they are in enough financial hardship they can do a short sale, they should stop making their payments and go through the process. As you know, that will be a 6-month process involving an apathetic and incompetent bank most likely. I would need a significant discount to subject myself to that!

Listen to the podcasts available to you here on BP and read, read, read!  I listen to information on my phone/player instead of music I have heard a thousand times already. Read instead of watch tv.  There are so many ways to learn these days that weren't around when some of us got started, including this site and the ability to even ask your question!  

As a general rule on improvements or upgrades, I seek a 24-month payback.  50% per year plus a higher value and less maintenance headaches.  Can't get that out of a CD!

Wow! Wish I could find a cashflow property like that in my area.  With separately metered power, this is a legal 4-fam to boot, huh?  How would you rate this neighborhood?  I imagine there will be a bit more than average work on the tenant management side, but with a break-even of 2 units, it looks good from here.  I have price sticker shock, though.  I'm lucky to buy at 100x rent here!  Good find!

You mean buying your personal residence, right?  I would stay away from Land Contracts / Contracts for Deed where title isn't in your name.  Personally, I made sure we had a down payment and reserves before buying our own house so we went conventional.  In my area, I have found very few homeowners with homes I would want to occupy being open to carrying financing but I suppose they are out there!  With our first house, the house and it's location was more important than finding creative financing.

For short-term needs I would think a collateral lender would be a good fit.  If I had $60k in the bank, I may use that or collateralize that as well.  If my bank wouldn't lend against that, I would move my money to a diiferent bank that would.  

I'm not a CPA, but if the material was purchased for a specific job, I would put it in repairs (or maintenance/cleaning, depending). Supplies are like buying a big box of light bulbs or 9-volts or carpet shampoo solution for future use.