All Forum Posts by: Andy Collins

A couple of months ago a storm came through and damaged a roof on one of my houses, we got the roof fixed immediately but it had caused a portion of the ceiling in the living room to cave in.  It's 20' ceilings, so I only wanted one contractor to fix it, so we waited.

This week he had me on the schedule, I told him I would arrange for a lift and have it at the house yesterday morning,,,all so good, right.   He finished about 9PM, and he and I loaded the lift (about 1k lbs) into my trailer.  This morning when Sunbelt rentals opens, I went by to drop it off,,,,I went in, ask to have someone help me,,,they said in a minute,  I waited, then went in and ask again, same answer.  I knew I was coming up on my 24 hours so i went and was going to roll the lift down the ramp,,,,,and like a dummy I pulled it instead of pushing,,wheels got caught on the top, it tipped over and landed on top of me...,,it required many stitches in my face, I have a CT scan on my brain and face tomorrow, and I feel like I got run over by a tractor trailer rig.

I am only writting this because if you start to do something, and that little voice tells you to wait for help,,WAIT FOR HELP,,,,with another person on the other side this could have been avoided,,,,

I don't know how many things I"ve done and thought "boy, that could have been bad",,but got away with it,,,don't do the same,,,no house/rehab etc is worth getting hurt or killed over

andy

I'm a credit 'nerd' i use creditkarma, creditsesame, myprivacymatters (not free, all 3 agencies)), smart credit (TU, not free), etc etc.  The only place you can pull a true fico is myfico.com,,,but there is a catch, there is more than one version of FICO (2 or 3 I believe),,but those scores have always be right on when my mortgage broker pulls my credit.

As someone else stated, the free sites aren't FICO, but will give you a good idea if your score is going up or down, and you can watch how different things effect your score.

Credit is its own 'jungle' to explore,,,and a lot of tricks can be learned (I'm not talking about getting things off your score they you did, but removing inquiries, things that will help your average age of accounts etc.

Short story, if you pay your bills on time and don't use much of your revolving credit, your score will be good,,if you don't, your score will be not so good

I deal in middle class homes, I can't even imagine renting a house without a dishwasher.

I bought one house without one, we waited to add it until the last week, a couple of people saw the house while it was being rehabbed,,,the husbands never notice it wasn't there, the wife always did.

I know I wouldn't live without one, but if its a low income area, and the comps dont have one, don't

andy

I've also used simpliSafe, worked great, and i also leave a radio playing talk radio so that there are 'voices' in the house.

I like the  idea for motion lights outside,,makes all the sense in the world

Are you going to manage these properties?  Are you involved in any way with the rehab (including hiring contractors),,,will you have ANYTHING to do with the day to day operation of these rental units?

LLC's if your just an investor and have no personal involvement can provide good protection (also assuming you have commercial loans in the LLC's name),,,,but as others have stated, piercing a LLC if your at all involved in making decisions about it, is pretty elementary.

Guru's tend to push LLC's,,some people like to say they own "x LLCs", etc,,,but talk to your lawyer before you do ANYTHING to manage liability, they are the experts in that field, not your CPA

I'm also in the DFW area, and agree on getting an engineer to come up with a solution, then ask the engineer, what type of piers do you recommend,,there are several types, I don't know which is better (or didn't), but the engineer will.

Many of the foundation companies are just a sales organization that sub out the actual work,,,,you don't want a group like that,,,you don't necessarily want the one that spends the most on advertising,,but ask investors in the Irving area who they have used and been happy with,,that is the best way to find the company after the engineer develops a plan,,and get use to using the foundation guy a lot,,,I have him do an inspection as part of any pre-purchase inspection, I've had houses I was sure he would think needed work, they didn't, and others I thought were great,,they weren't.

No matter what the legalities are of your loan, the basic concept of buying a house for $30k and renting it for $600 mo is a good one, but those figures only work on paper.

A house purchased for $30k will normally (95% of the time) need to be rehabbed so some extent before you can put tenants in,,also there are cost associated with advertising, vacancies, etc, which is where the $54k a year income figure came from (figuring 50% of income for expenses and repairsj, and I'm assuming you want to use a property management firm, 15 low income rentals would require a lot of management. 

Your concept is good, and I think you will find most of the people on this website are doing something somewhat similiar, just remember the real execution in the real world is a little different than a spreadsheet.

@Account Closed  I don't mean this to be taken wrong, but all sorts of red flags went up when I saw those rates/terms.   You have to think, why would someone loan money with terms 2% below conforming mortgage rates?

Those rates are well below the yield on government bonds of the same duration,,,that just doesn't make sense

andy

@Account Closed unfortunately it's not nearly that simple, or if someone did something bad, they would just push all assets into an LLC and walk away.

As I outlined previously, if your a pure investor, you will have nothing to do with the management of the property, the rehab etc, and buy and hold the house in an LLC and the note is not guaranteed by you personally, a LLC does exactly what you think it will do.

I have $5MM in liability insurance with an umbrella policy, it doesn't cost very much at all, and I don't have to worry about liability as long as I take care of the house and keep up on maintenance etc.

If a tenant calls you and says "I smell gas" and you do nothing and the house blows up and someone is hurt or killed,,,your screwed no matter what you have done with insurance, LLCs, series LLC's etc etc.

If you had no idea there was a gas leak, and no reason to know it, then your covered by your $5MM in insurance

Get an appointment with a bankruptcy attorney, just a first meeting (hopefully at no charge).  You might be better off going through  bankruptcy than having this over your head, the big question is what can be discharged through a bankruptcy, and a bankruptcy lawyer is the one to answer that.

I think in Texas the minimium is $50k for property damage,,,however in parts of Dallas the average car (just one car) cost a LOT more than that,,,,and that's with no one getting hurt...state minimium's are for people that have no assets.