All Forum Posts by: Christopher Brainard

@Adolfo Cuellar

Most real estate agents/brokers are not suitable for an investor. Most realtors are interested in helping a couple find a house they are emotionally attached to or to help a seller offload a home so they can find something more suited to their taste/circumstances. They enjoy helping people and making people feel good. Nothing wrong with that, except that an investor doesn't need to feel good about the property, he needs to feel good about the deal. My old agent used to ask me if I liked a house and he was constantly puzzled when my response to him was in terms of ARV, Repair Costs, Cap Rates, and Comp Values.

-Christopher

@Ricardo Camacho

Yes, you should contact the potential seller and vet them properly. Find out if they want to sell, how much they owe, how far behind they are, etc. Then you will need to determine what the fair market value of the property is and how much in repairs it will require, before you can suggest a course of action. 

If they owe more on the home than it is worth, you will need to look at doing a potential short sale. If the property has a bit of equity in it, but not enough to make selling worth it, you may be able to pay existing back payments and refinance or get the mortgage assigned / subject to (if possible). If there is substantial equity, their best move is probably just to sell.

-Christopher

@Jonathan Herbert

Well, the first thing you should do is educate yourself so you understand what you don't know. There are a multitude of how-to guides and podcasts available under the "Learn" section to get you started. There are also several e-books floating around, but I would read up on some general items first, just to get an idea of what you may be interested in, before i dive into a specific subject.

-Christopher

Hi @Jennifer Wang

I think the owner being the agent is irrelevant, I'm not sure why this concerns you. What concerns me is that I don't think you're looking at this deal from the proper perspective. Given that this is a duplex, your offer should be based on comps in the area and supported by the market rent in the area. Making an offer less than asking price is irrelevant, if you haven't figured out what the property is actually worth. I see many properties on the market where the sellers are asking 20% to 30% more than fair market value for a home. Before you make an offer, you should be estimating the repairs necessary for a property - it sounds like you got $5000 offered by the seller, but what is the actual cost of all repairs and deferred maintenance? Generally speaking, older houses require a lot more work than newer construction.

Additionally, I have a feeling that your 10% return figure isn't calculating a reserve for repairs, CapEx, and even possibly taxes and/or insurance. Make sure you have all your expenses included when you're looking at the return.

Overall, it sounds like you have the cart a bit before the horse. I highly recommend that you step back, get all your numbers strait, and re-evaluate the deal to ensure that you know exactly what you're getting into.

-Christopher

Hi @Jennifer Streamer

I had a similar situation last month here in Las Vegas, where temperatures are pushing 110 degrees. I think the issue here is that you shouldn't have told him about the availability of a Sunday visit, let alone the fee. I could see that the tenant may feel that you don't think he's worth the $55. 

I think I would have just told the tenant the company who is contracted to repair the unit will be out as soon as possible, and provide the date/time you have arranged for Monday. If he asks why it will take so long, most companies are really busy during the summer and can't do same day repairs. Given the temperatures in Michigan, I'm sure he can survive a day without AC.

-Christopher

Hi @Devin Beverage

As @Gilbert Dominguez mentioned, the devil is in the details. In the case of condos, that's always the HOA! To give you a real example of how things can go bad, in 2009, the one of the complexes that I'm currently invested in was selling 2/2 condos for ~$190k. This was during the downswing of the market and many people felt that these condos would be worth a lot more when the market rebounded. The problem is, the HOA board has no idea what they were doing and allowed the situation in the community to get out of control. The community is now 90%+ investor owned, tons of bad section 8 tenants, and things look grim. These condos are situated in a Class A Community and all the other residents of this community loath the people who live in these condos. Those units are now selling for $65k.

Now, I've spent a lot of time working with the HOA board and we're on the track to fix things. I don't believe that most people who sit on the HOA board are inherently bad, but the majority of boards are either run by a single corporation that has a large investment in the complex or by clueless homeowners who want what is best for the community, but have absolutely no idea what they're doing. This doesn't mean that you can't steer them in the right direction and get things back on track, but be prepared to spend a lot of time and effort that you wouldn't have to spend on a SFR to educate and guide the board.

-Christopher

@Courtney Murray

Almost all listings these days are exclusive right to sell, in which case you must contact the broker, as he will be part of this deal. If the listing is open, they you can contact the seller directly and deal with them directly. This information should be available on the MLS listing. As for the friendliness of the realtor, that generally depends on if they are getting paid or not.

-Christopher

Hi @Thomas Fosnaugh

As far as I know, participating in the Section 8 program is still voluntary (at least, in Nevada). If anyone knows otherwise, I would appreciate the update. You may not, however, discriminate as defined by the Fair Housing Act. Additionally, you should have minimum rental standards for credit and income. Its been my experience that most Section 8 applicants have insufficient income and horrid credit.

-Christopher

@Michael Anderson

Travertine is not as durable as porcelain and is much higher maintenance.  It is soft and porous, unlike the porcelain, and requires being sealed periodically, which your tenants will not do. I do not install travertine in any rentals, however, I do install it in all my Flips. Travertine (in my opinion) is a very attractive material and provides that 'wow' factor when you go to sell. 

-Christopher

Hi @Julece Glaum

Blanket loans aren't super common loan instruments and the ones I've inquired about are mostly asset based commercial loans, which look at the DTI for the properties. If you wanted one loan to purchase all four, this would be the correct instrument, however, without knowing the purchase price, rent rates, expenses, etc, it's hard to really to give much in the way of constructive advice.

-Christopher