All Forum Posts by: Brent Shields

In other words, if your adjusted gross income is over $150k then the answer is pretty much "no".

If your adjusted gross income is less than $100k then the answer is "maybe", if you buy properties that show a $25k loss because of depreciation. 

A couple times I have done a 1031 exchange and then put a loan on the new property I bought, that way I could pull out some cash and it was tax free.

In the last year I have invested in 7 syndication deals, all are doing good. None have sold or are up for sale so I don't have any great ones yet. I guess all my deals are doing about the same at this point.

One is not too far from where Apple announced they are spending a billion dollars to hire 15,000 high tech employees, so that has got to help, and it might even push that deal into the great category.

Investing in someone's first deal sounds pretty risky to me, but that is great it's working out for you.

Good list of questions, the more information you have the better decisions you can make.

@Negar P.  just for an example if you had a house that was worth $100k and it would rent for $500. 

you could sell it for $120k and the tenant would pay $750 a month, so the extra $250 would apply towards the down payment.

So your making $20k off the sales price, and some times  you can give them a $200 credit each month, so you would be making extra money off the monthly rent as well.

I also collected some money up front, usually $10k to $15k.

@Shiloh Lundahl   I would completely agree with you about things being tenant friendly. Every time I have been to court against a tenant it usually starts out with the judge saying something like everything the tenant says I will just assume is a fact, everything the landlord says is hearsay and needs some type of documentation for proof.

But requiring a foreclosure would be a little stretch even for some of the judges I have seen. 

What I do to try and avoid problems like that, is write up the option so that the $10k they put up front is non-refundable. 

Then later if something goes wrong for any reason, even if they just say we don't want the house any more. I would start with offering them 50% of the money back. If they had any kind of a reason at all, I would offer them all their money back.

That gives them a pretty big incentive to work with me and not go to court.

Thinking about it most of my deals like that have worked out, they bought the house and were very happy with it, but I have never sold anything on an option before a market crash, that could change things.

I have a buyer who will pay me 80% of market value for just about any house I want to sell him.

Find someone like that, then find a house that the owner will sell for less than 80% of market value and you get to pocket the difference.

If I found myself owning a house with a negative cash flow that I didn't want to sell at market value and take a loss on, the first thing I would look at doing would be to sell it to someone on a lease option.

Usually it works like this, I find someone who has income but some credit problems that wants to buy a house.

They are willing to pay more in monthly payments and I hold the extra money and apply it to their down payment.

I work with them for the next few years to clean up their credit.

Then when they have built up a down payment, I have their credit cleaned up and I take them to a bank and get them a new loan and they purchase the house.

That's my favorite way to sell a house for more than market value.

It's a win-win situation for everyone.

The times I have used other people's money I would start by asking them what they were doing with their money.

When someone says they have it in the bank account earning .2% interest or in a CD at 1.2% then I would ask them if would you like to make 10 times that much?

I would suggest that same approach, once you have used up all opportunities to borrow money at an interest rate, 

only then would I start talking to people about an equity split.

I have found it much easier to just borrow money from people, and put a loan to them on the property.

@Chi Ta I started with nothing, I went to a seminar and the guy said if you don't have any money get a bunch of credit cards and buy a house, so that's what I did. 

My first house I bought using a bunch of credit cards. I kept at it until I had 27 rental properties. The banks were a problem on each and every property. But they are only a one time problem, so I had to solve 27 banking problems to get there. Not the easiest thing but not impossible.

I have never seen two banks with exactly the same lending rules. They are all a little different, so go to lots of banks and ask what they are looking for to make a loan.  If they will only make 3 or 4 loans on rental properties, then get your 3 or 4 loans and then go to a different bank and start working with them on the next one.

The bigger problem for me were the tenants, they were a problem each month, and 27 tenants times 12 months a year = 324 problems each and every year.

Because of all the tenant issues I sold all my rental properties and now invest in syndicated deals, so I don't have to deal with tenants any more.

I have done that a few times, your prices for the actual plumbing are going to vary wildly depending on how your building was built. 

If all the water pipes are separate for all the units to the meter then it may be a simple job. That has never been my experience.

For that part you just need to get a couple of estimates.

The much more complicated part will be working with the city or county that your in, and there is no way to estimate what they will cost you and charge you, in the end it will always be a lot more than what ever they tell you.

One thing I have learned is that when you go to talk to them about your project, find out who the inspectors are. Pick one inspector and always ask for that person and try to only deal with that person.

I have run into the most problems when I work with one person then they go on vacation and a new guy comes out and says "ok, rip everything you have done completely out and put in all new pipes."

Then they usually mumble something about how they read something in their code book some place and they think that's what it means.