All Forum Posts by: Andrew Johnson

Anna Scherrei Do you have a tie to either area? Know people in either market? Boots on the ground are something that will make vetting properties and managing them infinitely easier (even if you have a management company). Plus, it might not feel as much like "work" when you're checking up on a property, which you should do.

Kyle Lefel Zillow is a great resource for this and it's especially good if you're in a subdivision and can find a model-match home. If you get into rural areas it's much more challenging. Of course, if it's been rented in the past that's the best indicator as it likely factors in any condition issues (positive or negative) with the property itself.

Christopher Paredes Just look for the right deal for you. If there is a market pull back will it be enough to offset rising interest rates? Will it be enough to offset annual positive cash-flow until the pull back happens? The bottom line is that nobody knows. If you're worried (or just conservative) stress test your vacancy, repair, etc. assumptions in your pro forma. Make sure you have 12 months of reserves instead of 6. There are easy ways to hedge yourself so a downturn will only sting instead of kill you.

John Jessie My initial reaction would be: 1.) I would want you (the deal maker) to have financial skin in the game. If there were 4 partners each at 25% of the 20% down payment it would be more palatable. 2.) You'll probably have to make do with significantly less than 50% of the benefit of it's your first deal. A lack of a track record is an increased risk for the investor and, as such, necessitates an outsized return. 3.) It seems like some of the value proposition is that you would manage the property. Could you make more (hourly) as an attorney than a property manager? My first blush idea would be to work more billable hours as an attorney to accumulate your share of the investment and outsource property management.

Jim Keally I'd also look into the electrical and plumber situation. Personally I'd find a general contractor, pay them for their time, and have them walk the property with me. Outside of that I've found that stated rents offer differ from collected rents in certain areas. You can't pay a mortgage on market rents or collected rents, only what actually ends up in your pocket. But now I'm just stating the obvious.

Jerry Ellis Questions I always ask: 1.) Are those your estimated market rents or rents that are actually being collected in the units today? 2.) You didn't state the age of the property so while capex might be good to forecast at 10% what happens if you need a new HVAC next year? 3.) Do you have to reserves to cover any unexpected capex expenditures? 4.) Age of the property usually has some influence over maintenance expenses (1907 vs. 1997 vs. 2007 all have different implications). I guess that's not a question but more of a statement.

Casey Gray It would depend on what he's looking for. If it's more urban infill then driving is probably your best bet. If it's more rural you'll find a surprising amount of land/vacant lots on Craigslist. They get advertised as hunting land, deer camps, etc. but odds are they're completely vacant of any permanent structures.

Michael Vieira It's a little bit of an incomplete question. The answer differs based on what it is that you bring to the table. Are you a contractor? Do you own a property you're looking to flip but don't have the money? In short, anyone is going to want to know: 1.) Why should I trust you with my money? 2.) What do you bring to the table? 3.) What skin do you have in the game?

Colin Kamesh Raja I'm a little confused by your post. Are you hoping to invest $150K and have cash-flow >$13K per month so you can repay your loan and make some passive income? That's over 100% annualized returns ($13K * 12 months = $156K on $150K investment). Am I reading your question right?

Joe F. Multiple offers at full-ask or just multiple offers? Huge difference. And, who knows, people could walk out saying "I'll put together an offer" and then nothing comes in writing. Regardless, make the offer that works for you. Side note, there have been times I have noticed that properties still show listed despite being in escrow. With the Trulias, Zillows, etc. out there they can capture interested buyers for the area.