All Forum Posts by: Andy Eakes

@Amit Desai Unfortunately, rental properties tend to have higher rates because the lender takes on more risk than someone's primary residence. You can always pay points to your lender to lower the rate. This would make sense if you planned on holding the rental property for an extended period of time. Otherwise, just factor the new rate you'd get on a rental property into your calculations. With rates so low, even rental property rates are insanely low. Great for cash flowing properties! 

Finally, anytime you say a property is your primary when it is really a rental that's bad. It makes investors look bad. It makes you look bad. For the sake of your reputation and ours, I wouldn't lie to get a lower rate. 

@Juwan Parker Hey Juwan! I invest in old homes as well built in the 1920-30s and earlier. The thing that I have seen work best in the old homes as far as heating and AC goes is something called a ductless mini split. They are amazing for old smaller homes because they have both heating and air, they are pretty easy to install, they are remote controlled, and they heat/cool an old home in no time at all. I highly recommend. They may be a little more expensive, but trust me, they are a life saver. I know how hot and/or cold it can get in those old homes!

@Darren Tunstall Congrats! Sounds like you learned some valuable lessons throughout the whole process and made some great money! This is a great example of what patience and toughness (through 2007-2009) can bring you. I tend to see a lot of people who are trying to get filthy rich asap but to me, the buy and hold, long term strategy just makes more sense, especially in San Diego. 

I am also very familiar with the Chula Vista area as well and all of the appreciation it has seen over the years. I'd love to hear what your next investment will be. 

Until then, good luck!

It would be a little odd if he always paid on time, no issues, etc. and all of a sudden stopped that when the new lease transferred over. It has only been 5 days, and if she just moved in  all that is stressful. Have you tried contacting them and continuing some discussion? I wouldn't freak out on them about it, especially if he has been good to you. 

Maybe work to set up a time this weekend where they can sign the lease. If you continue to try and try and he is still MIA, then I would get worried. 

As far as I know, you can not choose your own appraiser for obvious reasons. I am not sure why it came in so low based on your description of your situation, but I know that many appraisers base their reports on comps in the area or other recent evaluations of the area. I know that some investors will try their best to put a figure with some back up data in front of the appraiser before they do their report. 

So to use your situation as an example, before you had your property appraised, you could've handed the appraiser the report done on your buddy's place and been like "this report was recently done on an identical property next door by an appraiser who said it was worth $120,000." I am not saying that strategy will change the value, but it never hurts to show them a figure with factual support before they go in. The factual support is what really brings it home. 

It is odd that the value would come in so much lower than what you thought. I would check to see which properties they compared yours to and call them if you have any questions. Sounds like the value of properties change drastically based on the street it's on in your market. So it may have been a case of confusion or misunderstanding of the market.   

Sorry you have to go through this. Hopefully it doesn't deter you away from REI!

Without the pro membership, you can only do 5 calculations. Also, anytime you ran a sheet and then went back to change something, that counted as 1. So you may be out of calculations. But being a pro member is totally worth it if you are serious about REI! I highly recommend. You get unlimited calculations with a pro membership.

There's an app called deal machine. I know that you have to pay for the service but you can plug in a property's address and it will tell you who the owner is and where they live if that property isn't their primary residence. Maybe they have a free trial you could try and to see how legit it is? I'm sure it is not that expensive. 

Another option would be to search their name in the county assessor grantor/grantee database. In San Diego you can search the person by name to see all the properties that a particular person owns. I'm sure it's the same in LA. You can go through the documents listed, and eliminate the investment property or properties to narrow down where their primary residence is.

Phone numbers are trickier to get online without social media, so at that point, you may need to start door knocking if you can locate their residence online.

I use to work as an investigative journalist so if you need help locating people, I have some experience. If you would like some help, let me know!  

It's is hard to know whether or not you would be getting a good deal based on your info. You may want to get more info as to what condition the property is in, how long he has owned it, and see if the tenants pay for utilities or not. Once you can get some accurate numbers, you can run some calculations. I would also contact an agent to see what they think of that opportunity. 

Personally, I always have some reservations when it comes to units with long term tenants. They usually pay less than fair rent, less than a fair share in utilities, and they aren't as open to paying more. That is why I would try hardest to gain some knowledge of the tenants. But you never know! He may just be too old to take care of his great property and wants to hand it off to someone else to make money on. Plus, $1800 per month on a $189,000 house is pretty much hitting the 1% rule, so that's a promising start! 

If you have any other questions, feel free to reach out.  

@Devyn Caraballo I would factor it into the security deposit, and make it clear that any damage to the furniture will come out of their deposit and put it in the lease. It's just like any other damage done in the space. 

Foreclosures always surround loans. Property tax is a whole other thing. Usually you have to pay to get information related to foreclosure listings. When someone defaults on their mortgage, they go into pre-foreclosure. States have different processes, but basically the owner has time to pay back the debt before the bank takes over and the property goes to auction. You can go online and search foreclosure properties. And you never know what sort of a situation that person may be in. Selling their property before it goes to a foreclosure auction to repay the debt is certainly an option for them, and many investors do deals that way. 

As far as delinquent taxes go, you can search properties that have failed to pay property tax through your local county assessor. Usually there's a data base to search in, or you can call and they have people who can help. This is another great way to find people who've fallen on tough times and now need to get rid of their property. 

The hardest part in this process is convincing them to sell to and trust you. They may be very defensive as a result of their situation (or just in general), so approaching it with an empathetic and nonjudgmental strategy allows for a more approachable option for them. I've read about investors who help the previous owners move or clean or find a new place. They really go above and beyond to help people who've hit hard times. Plus, they usually get a great deal.

Good luck to you!