All Forum Posts by: Brett Vandervort

I already posted in another forum here on BP, but I'm hoping to get a few more responses here...

I want a good management company that not only manages my properties well and with integrity, but who I can also rely on as a source of investment advice. For example, I could ask them whether a potential property is worth investing in based on their knowledge of rent prices, growth, and crime in the area.

Also, I know many investors don't recommend management companies. Why though? I'm wanting to buy my first property soon and I'm trying to consider every angle. The pros I've heard for management companies are: they help get quality tenants, they handle the minor maintenance issues, and they can help you buy properties wisely (like in my example above).

I want a good management company that not only manages my properties well and with integrity, but who I can also rely on as a source of investment advice. For example, I could ask them whether a potential property is worth investing in based on their knowledge of rent prices, growth, and crime in the area. 

Also, I know many investors don't recommend management companies. Why though? I'm wanting to buy my first property soon and I'm trying to consider every angle. The pros I've heard for management companies are: they help get quality tenants, they handle the minor maintenance issues, and they can help you buy properties wisely (like in my example above).

Thanks for all your help! You've giving me a lot to think about and opened my eyes to opportunities I wouldn't have noticed otherwise! I've contacted my mortgage guy already, and I'll post updates if I can get some traction. I'll still need to save up for the initial 3.5% down payment though. 

@Hattie Dizmond Thanks for all your insight! I think I'm getting it now. Just to be sure, could you run me through a hypothetical situation, maybe from your experience?

@Hattie Dizmond I see. Wouldn't the new mortgage have thousands of dollars worth of closing costs like a regular mortgage? That might negate the savings of getting rid of the PMI payments, and wouldn't contribute anything to the value of the home. And refinancing is based on the equity in the home, and I don't really see how that would solve the PMI issue anyway since I would still be under 20% equity . Please forgive all my questions. I'm just trying to understand creative financing.

@Hattie Dizmond Interesting perspective. Can you elaborate on the refinancing option? I work at a bank, and the maximum term for our refinances is 15 years, and the refinance rate is higher than the mortgage rate by almost 1%. So theoretically I could get out from under the PMI payments, but at a higher rate and a shorter term. Granted I would pay off the property faster this way, but that kills my cash flow.

Great responses! It's been very helpful.

@Hattie Dizmond : I'm trying to stay away from FHA loans because the PMI payments are for the life of the loan now. They no longer go away once you reach a certain percentage of equity in the property.

@Eric Fernwood : Excellent and thorough response! It sounds like the best thing to do right now is, painfully enough, nothing. I'll keep saving so I won't need a loan from my parents once I do find the right deal. I do have a couple of questions though. Why is managing your own properties such a bad idea? Wouldn't it make it cash flow better? I respect your experience and opinion, but I've had other investors tell me to manage my own, while others say have a management company do it.

Real estate investing has been my dream for years, and I'm eager to start! I thought it would be an good idea to get my feet wet by buying a house and renting out the extra rooms to roommates. But is now the right time? First of all, I'd be getting my down payment as a loan from my parents and the max they'll lend me is $20k for 5 years at 4% ($370 per month), so the most house I can guy is for $100k, but even then the debt burden would be pretty high ($80k for 30 years at 4.75 is $420 a month, for a combined monthly payment of approx. $800), so I probably wouldn't be able to break even when expenses are factored in. If I got roommates (which isn't a sure thing) that would bring the cost of living down considerably, but there is still the second issue: according to several realtors, it's a "seller's" market right now, so it's almost impossible to get a house at a discount (my target is 20%). So I'll have to either buy at market, or at a premium, or a serious fixer upper (I don't have the skills to do it myself, nor the money to pay someone else). So between the debt burden and the demand exceeding the supply, is now a good time to jump into my first property? Or would it be better just to rent an apartment, save money for a down payment, and wait until the market become more favorable to buyers?

Thanks for the replies and advice! I'll update my post!

Greetings! My name is Brett. Real estate investing is my dream job, and I would like a guide to show me the ropes. The more I read on Bigger Pockets and in books, the more I realize that what I need is experience, not just theories. Would anyone be willing to mentor me, or know someone who would?