All Forum Posts by: Andrew Linderer

Partnerships can be tricky. Make sure to do your homework on the deal and the person your doing the deal with lol. For the most part, I’ve found good people in real estate investing circles but it’s just like anything else. Be aware of those that talk the talk but can’t deliver. I think we all try to help each other but at the end of the day you have to make sure that you don’t over expose or extend yourself as an individual. Partnerships can be awesome cause they allow you to do bigger projects and more projects but keep in mind that while you might get 50% of the massive profits your also carrying 50% of the risk and debt that it takes to go after the bigger payouts. I’d be careful about a partnership of all newbies. Make sure that you’ve got access to good feedback and reliable people that have been doing it a while. They can save you from stepping in the yogurt.

I’m not from Cali so I don’t know the market but in AZ you have to live in a FHA house for 2 years before selling or you get hit with a capital gains tax so do your research on that. Cali may be different. I’ve been in my house for about 2.5 and I’m listing it next month. Will probably make 60k and I’ve only put about 15k into it in improvements. Appreciation is awesome! Another idea would be to rent in Cali and buy a small place elsewhere. If you can rent for 1500 in Cali and use the other 1500 to pay the mortgage on a house in a cheaper market, maybe even rent it out while your not living in it you might be able to have a bit of cash flow and build some equity at the same time and have a place to move to when your done in Cali. Just a thought.

Meetup events! Networking! When I need to hire a PM I ask other investors who they use or who they know. Your job is to be that person that comes to mind. Networking is usually pretty cheap. Get out there and go to a Meetup or real estate group and become a regular.

If your doing a remodel just plan on getting the carport up to code as part of your remodel. If they had a permit before great, if not no worries, you’ll make sure it’s up to code and passes inspection. Then you can tell the new buyer that everything is up to date and good to go. I’d definitely take your contractor with you to take a look if you don’t feel comfortable gauging it yourself. If it’s not up to code find out what it’ll cost to get it there and build that number into your budget. Find out what it’ll cost to get it permitted so that you have the option to sell to an FHA buyer later. Lots of people think that non permitted extensions are a deal breaker and that you should always ask for permits on previous work but honestly that’s good for me because it scares people away and allows me to buy some really cool stuff. Non permitted extensions are a small hurdle and they aren’t hard to get over if you plan for them and build the cost into your budget. If the garage enclosure isn’t permitted that could actually be better for you. It means they can’t count it in the sq footage of the house when they sell it to you but you can get it inspected and finished properly and sell it with the additional sq ft. It also means that you aren’t competing with the average home buyer. You’ve got some negotiation room because the seller can’t sell to an FHA buyer... they have to sell it to someone like you.

If you can rent it out for 1500, why can’t the current owner rent it for 1500? The idea you’ve got isn’t a bad one but I’d want to do some research before you lock yourself into a lease at 1000 a month. You need to plan for vacancies and figure out who would cover repairs. Basically what it sounds like you want to do is be a property manager on the property which is cool but a property manager isn’t on the hook for a grand a month if the unit is empty. Usually a property manager markets the house and manages upkeep but the owner still pays for everything the property manager just usually makes about 10% of gross rents (probably varies based on the market) If your not a property manager but somehow work a deal where you can sublease you’ll want to make sure that you do that right and have a good contract that protects you. Your taking a lot of risk committing to a monthly payment without any ownership in the property. If your tenant breaks something, do you have to fix it? Do they? The owners? If they break their lease how long do you have to get it flipped. If you have to evict someone who pays for that. Lots of stuff to think about. Hopefully my comments help and I don’t come across as a party pooper. I think it’s a cool idea but do your homework first.

The easy answer is, are the units with central heat/ac usually 10% more expensive than the ones without? Then if they are compare what the dollar amount for 10% is and if the renovation is cheaper than that, it may be worth doing IMO. So if a house without AC is 100k but roughly the same house with AC is 110k but it only costs 5k to put in AC then it may be worth doing but maybe not. I just spent 5 grand to make 5 grand. Personally when I enter a buy and hold, I’m not as concerned with raising a property value as I am with maximizing my cash flow. Sometimes a project like updating or adding AC will increase both property value and cash flow but it depends... and on a hold CASH FLOW TRUMPS ALL. If you can get higher rent with AC and the ROI makes sense then you may have a decent niche for finding places that need AC.

Your in the right place my man! Learn as much as you can on bigger pockets and start learning the language and all that good stuff. As for picking a major... you can’t go wrong with a general business or finance major. Make sure to take some crazy cool electives to give you a broad basis. At the end of the day your major doesn’t matter nearly as much as the fact that you got a degree. My next piece of advice would be to find a local group or Meetup and get involved asap, Especially once you get to school. That’s where you will meet your first parter and/or mentor. That’s where you’ll find contacts for lenders, contractors, agents etc. you’ll learn a ton but you’ll also find the value of networking. This business is just like any other: it’s less about what you know and more about who you know! Good luck to you!

MF is pretty competitive in phoenix. I’ve been looking for a 4 plex for close to a year but haven’t found one that made sense to buy yet. People pay way too much for them. I see stuff sell at a 5 or 6 cap all the time.

If a real estate agent doesn't want to submit low offers that get rejected then they are not the agent that you want or need.  Move right along.  They are a retail agent and they are going to have that mindset.  

Find an agent that is okay writing a bunch of offers.  Like you said, you expect 9 out of 10 to get rejected.  If you only throw out junk offers hoping to get lucky you wont get even that many accepted but if you work with your agent and build relationships with sellers you will find out the "number that works" for both parties.  That's the sweet spot, and I wouldn't call it low balling. 

We use Fort Lowel Realty.  They have their main office in Tucson but they've got another office here in Phoenix.  We've got property in Phoenix and Tucson so that made a lot of sense for us.  They've been good.  No major complaints.  Any issues that we've had, we go to them and get them worked out and we always get a resolution, so I'd be totally comfortable recommending them.