All Forum Posts by: Charles Carillo

@Travis Schmidt

I personally would try and see if I could get that $1,000 up to $2300 (half of what is owed) and move on. Collections and small claims are kind of worthless if they have no money. I'm not saying don't do it, but I would rather get half of my money and move on.

If you do indeed get a judgment against them, you could possibly garnish their wages and/or have the judgment recorded so that they have it on their credit. If they purchase a house in your area, you could have the judgment attached to the property (I have done this before).

Lastly, I have heard that you can 1099 them so they could be forced to pay taxes on it. I would speak to your CPA first before choosing this route.

@Jonathan Chique

You could bring it up to your attorney, but, it sounds like it was missed during your due diligence, which is your responsibility. It seems the previous owner did some patchy repairs to cover a leak, which might have been harder to notice, but the vent not being there should have been something the inspector picked up on, at least to mention it to you.

@Akinbowale Ajiboye

Most lenders will not lend in second position, and the ones that do are usually going to require a much higher return than 2%-5%. Possibly, if you can find a private lender who will lend in the second position, that might be your best bet, but they will most likely want a return higher than 2%-5%. 

@Peyton LaBarbera

I am not an attorney; you should speak to one before setting up any entity.

Having multiple LLCs in which you hold properties as you flip them is probably the best strategy. I would also stop using each LLC after you have done X number of flips through them (still keep it open for another few years before closing it - but do not hold any more properties within it).

@Christie Gahan

Find local landlords in your area who own similar properties and ask them for referrals. The best property managers I have found were from other property owners/investors.

@Mun Mohsin

In regards to the current tenant, I would figure out what the current market rent is for the property and what the market rent would be after you do the renovations/repairs. There is no way to know if the tenant is going to stay or not. After completing the work, you might find that the market rent is higher than $825. Reaching out to the tenant is not really effective since they can tell you anything, and I have never contacted any tenants prior to owning a property. Now, if you are doing the physical inspection and the tenant is there, ask them all the questions.

It really doesn't matter why the other buyer backed out. Hire an inspector to review the property in-depth. Get actual estimates on the work that needs to be performed. Bring in any other contractors as needed, and definitely bring in a plumber to verify the scope and cost of the work.

@Arnav Mehta

All water leaks are an immediate repair, no questions asked. I don't even want my property managers waiting to speak to me before they repair. Water is very damaging to any property.

I am unsure what can go wrong with 3-year-old garage wheels, but your PM's handyman should check this out when they are at the property, along with the front door lock. If these issues are determined not to be issues, your PM needs to set expectations with the tenant. In other words, you will fix things if they are broken but not replace things that are functioning correctly. 

@Jack Berg

There are 3 main parts to a seller financing deal: down payment, interest rate, and price (4th would be the term). When speaking to the owner (building rapport), your main goal is to figure out which of these main 3 is most important to them. Once you learn this, you can tailor the offer to meet their needs. For example, if they really want $500k for a property, offer a purchase price of $500k but a lower down payment and interest rate (and a longer-term). They are getting what they really want, and you are crafting the deal to where it will still make sense for you.

One potential issue is if what is most important to them is most important to you as well. For example, if they want a large down payment, and you only have enough for a 5% down payment, that is an issue. Or if they want a high-interest rate, and your numbers will not work at that interest rate, or if they really want a crazy high price where it will be difficult to cash flow and refinance in the future. This is where you need to really start working the numbers, but hopefully, you can craft a deal around what they want.

@Chungying Chu

If you want more liability coverage, ask your insurance company if you can increase it. Most small landlords will choose $1,000,000 in liability coverage, but in my experience, you can ask them to increase this. 

@Joseph Fenner

House hacking is one of the best ways of beginning your real estate investing journey (that is how I started years back in CT). Buy one multifamily property, live in it, self-manage it, learn the business, and then you will have a much clearer understanding of how the rental business works.

First, you must review your market/neighborhoods where you want to invest, underwrite many deals, find a property where the numbers work, and purchase it. You will learn more about REI with that property than anything else you could do.