All Forum Posts by: Christopher Blanco

@Justina R. Do you have a local REIA that you can attend? Do you have friends or relatives with money? Networking is the key to this business! I am doing my first flip, and I have all in about $8,000 of my own cash. All the rest came from other people's money. You can do it, and if you want it bad enough you will find a way.

Please don't wholesale unless you are REALLY good at finding win-win deals and understand how to do it right. Please...

I agree with what others are posting here. I make offers that make sense FOR MY BUSINESS, not for the seller. I am happy to make it a win-win scenario, but my business comes first. I am going through this (on a much smaller scale), right now. The seller wants a certain price, but is refusing allowing me to bring a contractor into the house. I was willing to work on giving them a higher offer, but not until I had a contractor in the house. They are not willing to work with me, so I cannot work with them and my low offer stands firm

Win-Win means you BOTH win, not just the seller. 

I would advise having open houses instead of showings. Have one on Saturday, one on Sunday and one in the evening during the week.  There should be no excuse to not make one of those. Have them sign up for one of those. 

@Ron Masek Sent you a PM great to have another Cleveland Investor. 

@Tracey Williams I sent you a PM with a great investment agent. 

Step 1: Contact your lawyer

Step 2: Personal issues aside, the rent must be paid. If the rent is paid on-time every month, then let them handle their personal problems

@Eric Anderson Its interest only over the life of the loan. The difference between the two in one, you get less interest but it comes to you monthly. In the deferred interest, your money grown, but the income is deferred. The deference is attractive to some people for tax reasons. 

@Eric Anderson the seller gets an interest rate for their money. When I make a seller financing offer I make 3 different offers;

1. Cash offer - this is the lowest value
2. Monthly Interest only offer - This will be an interest only loan with a 5-7 yr balloon, normally 5-7% that i will pay monthly
3. Deferred Interest offer - This defers the interest with the balloon. This is normally an 8-10% offer. The monthly interest only payments are calculated then paid out at the end of the term. 

I approach rentals a little differently. For each rental I plan on "tenant and maintenance" proofing each home before I rent it. I plan on replacing all windows, flooring (think Tile and Wood), Roof, and mechanicals. Around 25-35k, then I look at what my NOI is. I take the NOI over 5 or 7 years. Then the (NOI-Repair)*.9 gives me my MAO. Basically I want to make my money back, with some built in equity, in the time I purchase it. Since I plan on only keeping the property 5-7 years I only use 5% capex and since everything is new I only use a 5% maintenance. I use 10% for PM though I manage them myself. Eventually I will bring in my own PMs.

My goal is to sell my SFR rental to my tenant at the end of the 5 or 7 year period.

So looking at the example you gave you will only make $68,000 over 7 years on NOI. It will take you nearly 16 years to make your initial investment back. In that 16 years, even if you save 10% capex you will only have saved 11,000 in capex. Between tenant turn overs and major systems needing replacement you will be lucky not to eat into your profits.

This is why I don't like long term rentals.

For equity partners, don't forget to use depreciation as a bargaining tool as well.