All Forum Posts by: Andy Collins

One of the easiest mistakes to make it not enforcing late fees. I give every one "one freebe" but after that I enforce late fees. At the same time I try to be fair. I had a family that the wife was in the hospital for 2 weeks with complications with a pregnancy when the rent was due, the husband was working full time and trying to take care of 2 other kids. When they called me and ask the penalties, I said under the situation I understood they had more important things going on, and waived the late fees,,other than something like that I enforce them.

I have one renter that pays late, they have been in the house for 2+ years, and pay late every month, and I get late fees from them every month. They are use to it, and don't seem to mind paying.

One time someone was complaining about a late fee, I told them that when I refinanced any property, the mortgage company had to see all payments from my rentals, and if they were late, they would question what happened to the late fee,,,,of course its a line of BS, but they suddenly thought of the mortgage companies as the 'bad guy' and never paid late again.

andy

I just saved to get the money for my second deal, but I was looking for deals every chance I had. I knew if I found a super deal, I would find a way to put the money together (if your DTI is low you can take out a loan, keep it in your account 60 days to season it,,then use that, but that is pushing it.

By the time I got that next super deal, I had put together enough money,,if your doing this part time, add one house every 18 months, and pretty soon you will have a great revenue stream (assuming the deals are right)

andy

If your a non-investor looking to finance or refinance your personal residence, a bank is ok,,if your an investor, go to a mortgage broker, and fine one that deals mainly with investors.

A good broker knows what lender to approach for what type of loan, who does mortgages 5-10, who has an overlay that might cause you problems,,with a bank your working with a bank employee, with a broker, he is working for you to get the loan.

A good mortgage broker is a very important part of your team.

andy

Early in your RE career its easy to try and make things a deal, when after you have been educating yourself for awhile, you look at properties to see if they are a deal.

There is a balance between jumping too soon and not taking action,,,just slow down a little bit until you feel knowledgable.

If you can find a mentor and run deals by them, then you will be closer to making a purchase,,but find a mentor in your area if you can, they know the market, which is a BIG deal.

I'm a buy and hold investor, but I only buy in 2 zip codes, and not in all of both of them,,,it limits me to some extent, but I know the values in the areas I buy in well,,so I know when a deal is a deal,,and since I'm buy and hold, they all happen to be within 15-20 minutes from my house

andy

what type of foundation, is it slab? If it is then you need a foundation person,,if its pier and beam, you need a carpenter..

We have a LOT of foundation problems in North Texas, and yes water can cause the problem,,,but first you need to figure out is the floor 'warped' or is the slab foundation 'falling away"

"cash flow" doesn't include increased equity, its not cash.

I understand what your wanting, and you can just add the amount of principal you pay each month/quarter/year to the cash flow report to get what your looking for,,but increased equity isn't current "cash"

first I would question how "comps" have such a wide range, a comparable rental unit, one that is like the one you will end up with, shouldn't vary that much at all, maybe $100 at the very most (probable more like $50), are you just comparing a big area and anything 3 bedroom?

As far as your $25k rehab estimate, if you haven't seen the inside, you have no idea if its $10k or $80k,,,

Just go see the house, get a contractor to give you real bids, don't just think "plumbing, $x, electrical $y,,unless you are an expert.

Just slow down, don't "try to make something a deal", just see if it is a deal.

If it is a deal and the numbers work, great, but the biggest mistake you can make on your first deal is trying to make something work,,,look at a lot of properties, you will know it when you find the right one (and this could be it)

I'd rather see someone have your energy than someone that is looking for reasons a deal can't work,,your going in the right direction,,just slow down a little bit

you can get a PL to do a deal for a first timer, IF you have good credit and put a lot of 'skin in the game'

I'm assuming your planning on flipping, remember the lender is the one taking risk, will you do what you say, is the deal as good as you say it is, will there be unanticipated problems (yes, especially on your first rehab, but on most rehabs) etc etc, you have to give them a reason that you won't just walk away if problems come up,,if you have a lot of money in the deal, you would be less likely to walk away, if you have good credit, you don't want that messed up.

Don't give up, but find out what a PL would want in a particular deal,,then work to get that cash/experience

Unless you have a really, really good relationship with the hard money lender no. They want to know the value of the property, know what the rehab expenses will be, and have your money for the difference between the price/rehab and the percent of ARV they are lending.

None of the hard money lenders I have worked with would consider such a loan,,but again, if you really have a great reputation with a hard money lender you can ask.

They always want an exit strategy,,with what you talking about there are too many unknowns