All Forum Posts by: Christopher Leon

Robert Fuhs if you don't buy it, you make no money. If you do, that's potential $2400 end of year. I feel people make too big of a deal of things like this, especially, when it's your first deal. As long as you feel you can manage this property and make it operate effectively, I personally don't care what I have to pay! It's all about acquiring the unit, especially in a market like this. If you think you can get a better deal, and have the time...then go find it. Otherwise, this might be the best deal in your market today - so buy it. Just my .02 - it's worth what you pay for it. 😎

@Charlie Kleindinst i think u need to draw the line on what you can handle. If You feel they are going to be on your ***, untrusting, not take advice, then take  your business elsewhere 

@Charlie Kleindinst I guess it depends where the prospect fits into your business plan. I personally focus my efforts on working with investors and helping them purchase. A naturally by-product of that business is working in the rental market often and consistently. If I have a prospect for a rental who is difficult, I just find a way to disqualify them quickly. When working with a client who is looking to purchase, I sit down with them a few times before even talking about properties. It's important I prep them prior to signing an agreement and purchasing. If a client is clearly going to be difficult, such as not listen, question everything, is not motivated - I will bounce them. Best thing about running your own business is that you can choose who you want to work with

Originally posted by @Scott Weaner:

@Christopher Leon it was $6 at Home Depot.

 Thanks, Scott. Even better. 

@Watson Hilaire personally, absolutely not. I'd rather just wait for someone who has the money. Let's face it, in most cases, the security deposit almost never covers your turnover anyway, so why open up the added exposure of liability. Good luck. 

@Nolan Merrill interesting post. Personally, I started when I took Financial Peace University. I Tithe at my church. That's about the extent of my financial giving. I find volunteering my time and sharing my God-granted skills is the best way I can give back. I teach FPU at my church for one thing, and, sit on the Board of Directors for multiple Not-For-Profit companies. 

@Scott Weaner thanks for posting the video! That looks like a great tool. I use a regular screen roller, but this tool clearly makes it easier to re-screen. I'm going back to purchase one for sure. Thanks!

@Nicholas B. I may have totally missed the underlying question for this post. I was under the impression you were asking if people get into negative cash flow deals, generally speaking. After re-reading your post, I see your question was a little more in depth, specifically, related to saving a lot of money in interest over the long term. Sorry if my first reply was off-topic. 

Hi @Nicholas B. interesting post as I am currently doing this. I do not personally have disposable income lying around, but I am currently purchasing a property (w/ OPM) knowing it has a negative cash flow (-$115 to be exact) Allow me to explain:

In my market, there are many an undervalued properties still floating around. I happened to find one priced pretty low in comparison to what others are selling for currently. Back in the day, these things sold for 100% more than my purchase price today... The way I see it is, I know the product, I know how to manage it (the tenants I'll attract), I'm only 29 and plan on doing this for the rest of my life, and it's in an area I'm already vested in - to me, its a long term play to build net worth. Truth be told, I want to buy whatever I can now (as long as I can hold on to it - which is key) because I know later on I will look back saying "I should have bought more". I look at the net: with respect to my entire portfolio, sure this unit weighs me down $115 a month, but, as long as I can absorb the loss, I'm comfortable. Moreover, my plan is to acquire this unit, rent it in as-is condition because I can, get it up and running, then re-position the high interest financing while rates are still low. Here is the thing: most people get all bent out of shape about "negative cash flow" and I get it - you can't build an investing career/business off loses, BUT, since I'll never see a real estate market like this again (and neither will you - generally speaking) my ideology is, if I don't buy it now, I have no chance at all in making  any money. This particular deal makes more sense for me, too, because I'm already vested here anyway. For anybody just getting into this business, please understand, this only makes sense if you can absorb the loss and hold the unit without losing it - which in this case, I know I can. As far as I'm concerned, I'm buying a place to help out a less fortunate person by providing clean and affordable housing and they're going to cover 89% of my monthly nut. Sure, I'll have to pay $115, but it's not such a bad trade off when im considering this deal as a net-worth builder, a forced savings plan, and, I will get tax benefits from deductions which makes my effective cost of owning this unit a positive. That's my rationale - you can't expect to survive buying units at a loss; but, for some people, buying anything is better than doing nothing - provided it's not garbage and you know how to manage it effectively. Oh, I forgot to mention - I'm purchasing it with no money out of my pocket, too! Thanks for the post, Nick. 

@John Reardon I can see where your coming from,however, you have a brokers license! Don't demote yourself to the likes of "wholesaling". Did you attend a seminar or something? Nevertheless, locate an agent who is an investor and that's who you want to find. That way, you can build your brokerage business, while learning from an investment broker about doing deals to transition. Or, just Go buy something and that's the best way to learn. If you combine all of the aforementioned, that's a powerful combo - less the idea of wholesaling. You paid good money and went through a lot of education for that license - go use it. They should call it a license to print money, considering this market. Good luck