All Forum Posts by: Account Closed

@Matthew Paul

Boom! Reality check for him.

I am sure he thought you would just melt and give him a break.

@Duane Kidman

You are welcome. 

According to this article by Barbara O’Neill, Ph.D., CFP®, Rutgers Cooperative Extension, at Rutgers University which she wrote on 9/30/2015 here: http://bit.ly/2cY7i5E

• Approx 45% of American credit card users pay their credit card bill in full every month
• 55% of American credit card users carry a balance on their cards
• 11% of those that carry a balance only make the minimum payment

Going by the data in the article it just became harder for around 55% of mortgage applicants to qualify for a mortgage.

Just saw this story here: http://bit.ly/2d6Px2R

The gist of it is that beginning tomorrow Saturday 9/24/16 lenders will now consider a mortgage applicant's payment history over 30 months to determine their credit worthiness.

It is called "trended credit data".

Borrowers that pay in full are seen as less risky and may qualify for a lower interest rate and borrowers that just pay the minimum payment will be considered higher risks.

The old trick of avoiding large purchases right before closing on a mortgage and keeping your credit nose clean for a few months will not work.

Bad news for flipping because it will shrink the buyer pool as more people will have a harder time qualifying.

@Kurt K.

Yep, you went the extra mile which helps ground your decision. You are not relying on the representations of someone a couple thousand miles away.

I agree with you about keeping the PM as the main contact...you do not necessarily want interaction with the tenants beyond what you have established. That is what the PM is paid for.

That said, the person who will make or break this for you is the PM. Hopefully you vetted them in and out, know their policies for handling all the issues that will inevitably come up...maintenance, repairs, evictions, tenant lease-up, efficiency of rent collection etc.

A word of caution on PMs and maintenance, repairs and small-large rehab projects.... in my experience, many PMs do not have a handle on this. They either:

• Do it in-house but do it poorly and you end up with unhappy tenants or sub-par repairs that are just band-aids which will be like a leech to your cashflow
• Out-source but they do not know how to properly handle contractors or manage the project and you end up with almost twice as many problems as the first scenario

Since you are in it for the long-haul, if you have not already, you should definitely take a second look at your PM and do a lot of homework and assess their execution on the aforementioned areas especially maintenance, repairs and rehabs. They can give a good first impression to get your business but they may not hold up long-term.

@Kurt K.

In my opinion, the human interface and actually being on the ground and seeing the properties makes a big difference for out of state investors that goes beyond spreadsheets, virtual analysis and long distance communication.

You have a much better objective that factors into whether you want to get in for a short term or long term or get out.

It seems that you are leaning on the long term but at least you know the intimate details personally and you have a plan of attack. That will be in your favor if you change your mind since you can plan out the change and come out on top if you change direction.

Many out of state investors ignore the hands on aspect and just take the word of the people on the ground who may just be looking out for their own interests. 

This puts the out of state investor at a disadvantage and if things begin going south, they can unwind pretty fast and the out of state investor ends up as a motivated if not a desperate seller. At this point it is too late and the out of state investor ends up losing money to just dump the properties at pennies on the dollar in extreme cases just to stop the bleeding.

I think you are on the right track if after your analysis you feel it is worth it to hold them long term but if you change your mind, you won't be blindsided and become an unfortunate seller.

@Kurt K.

As a guy who lives and works in a market that is pretty well saturated by out of state and international investors, and having worked with some out of state investors (and still do), I see this from a different angle. 

By that I mean what actually happens on the ground......aside from pictures, video, phone calls, conference calls, texts, emails, dropbox etc. which are the communication tools employed to bridge the distance gap.

My main question to you is have you physically flown out to the area to actually see your properties and drive around the neighborhoods they are located in and drive around the city at large? I assume you may have grown up there and that you may have gone there to handle the transfer at the time of your dad's passing but what I am asking is if you.......as an investor not the kid that grew up there or a son handling the estate.....have you as an objective investor and in that mindset recently flown out to the town to dissect it and decide if you want to invest there?

Have you physically met your property manager?

You will be married to these two.....the city and the PM for possibly the next 5 years or longer.

@Manolo D.

Thanks for the reply.

I had a developer who has built several subdivisions tell me that he has in the past used a title company with the construction funds in escrow to where the payments to the GC and/or subs were handled by a third party according to the instructions given to the title company.

I did not ask him for the details but apart from the extra expense, this sounds like a pretty iron clad way to handle payments as well. 

I imagine in this case, the title company would have the Contractor Agreement/Contract and any other addendums on file and no disbursements would be made until the payee (GC and/or Subs):-

• Have their entity paperwork on file with the title company to ensure that they are legally operating
• It would force the designated and authorized payee that would sign the check to show up with picture ID 
• It would force them to not only sign the lien waiver but have it notarized as well before the check is released

Do you have any experience with this method or know anyone who does it this way?

@Manolo D.

I like the joint check to GC & Sub idea.

Is this done with partial lien waiver releases signed by both the GC and Sub with each check?

@Ray S.

I am assuming that the GC initially pulled permits for all the work and has called for and passed all prior inspections and all that remains are the final inspections? Are the permits posted on the property? 

If he did not pull permits, technically he cannot call for any inspections which just complicates this to another level since he was doing unauthorized work without a permit.

@Account Closed

I listen to Grant Cardone every now and then. He broke the mold and is a beast at what he does in his own right.

@Account Closed

Thanks for the write-up. In some aspects, it was like turning on the wipers to clear my windshield so I can see better and drive my business faster.

Thanks also for mentioning Eric Thomas. I don't listen to motivational speakers much and I may have listened to him a while back but the first video that I found was a wake up call to get back to what I used to be.

I just discovered Gary Vaynerchuk a few days ago while watching a clip of him and Grant Cardone.

.....and yes #1031......1 Corinthians 10:31 KJV Whether therefore ye eat, or drink, or whatsoever ye do, do all to the glory of God.