All Forum Posts by: Damaso Bautista

@Enrique Kratz

I believe the difference is and investment if purely that straight by the numbers.  If the money is not right then the purchase doesn't happen.

A lifestyle purchase is something that you want, like a nice sports car or a nice family home.  If your wife tells you she wants to live in a certain neighborhood because of the school district, this factors greatly in your purchase.

Investment = purely dollars and sense

Lifestyle = emotion or some other influencing factor involved

Can they be both?  They can but like anything in life nothing is cut and dry.

I am interested to see how other people view this because I know for a fact that I am on the lifestyle side.

@Angel Hernandez

I think @Jeffrey Allen hit the nail on the head.  It is my opinion that people get stuck in paralysis by analysis when they are afraid to lose.

I just made sure that If I went bankrupt because of my investments that my basics were covered:

Solid W-2 Career, roof over my families head, and food on the table.  

I was willing to risk the rest.  

Make an assessment and see where you land and then go from there.

@Sherez Mohamed

Some things you may want to get settled before you jump in:

1. Finding a bank that will give a mortgage on a home less than $100K 

2. 5% down is usually for owner occupied homes, so if you are planning to owner occupy I can see you getting in for 5% down on one of the properties but if these purchases are purely rentals then most banks are going to require 25% down.  

3. If the properties have been sitting make real sure to do your due diligence on these properties- not only analyzing the financials but also making sure the scope of work to get these things up and running aren't going to sink you financially once you get possession.  I have no idea where these properties are but right now there is historically low inventory everywhere and too many investors with cash money, so if these properties have been sitting for a while you either have diamonds in the rough that no one else has access to or the properties are not worth the price that is being asked for.  I am not there so I don't know.

4. If after you have done your analytics and everything works out on paper for you, then I would take down the duplex first with 25% down if you can find someone to mortgage the rest.  Get that up and running and then go for the other.

In your current financial situation I don't see how you can buy both properties with conventional financing.

You could speak with the owners and see if they would be willing to do owner financing.  It doesn't cost anything to ask.

Good luck!

@Inno Ekeh

If the space is large enough I would turn it into RV or large boat storage.  People are always looking for a place to store their RV's and boats that are within the city and not some far out place.  Depending on the alley access if there is enough room to get those large things back there the setup would be simple.  

@Christine Kankowski

I agree with Christine on this one.  This is about long term documentation using the Local Police Department.

Call them and ask if they have a community oriented policing program. They go by different names everywhere: Community lead officers, district policing, problem oriented policing team, COPS team.  Anyway you get the gist.

Once you contact that team, have the officer or sergeant in charge of your neighborhood meet you for coffee or at minimum speak to them by phone or email due to COVID.

Tell them the problems you are having with that neighbor.  Tell them that there is an absentee landlord that is making the neighborhood go down.

Eventually after the needed documentation they can help you put pressure on the owner to take action.  

These teams can be very effective in getting thing right in a neighborhood.

Some issues I see in your case: 

1. You don't live there either so your buy in to the neighborhood is less than if you were a homeowner who lived there.

2. The types of issues that are being complained about have to criminal in nature: drugs being sold from the property, excessive loitering by the neighborhood gang in front of that residence drinking, smoking drugs and shooting dice.

Have your ducks in a row for the best outcome. 

Good luck!!!
 

@Wilson Lee

Question 2 is a reasonable one.  This is a personal business decision that you need to make based on your business plan.  I never fault anyone for following their plan.  

If in your plan you can raise the rents based on what the market will bring then go for it.  The market will dictate how much you can charge for rent.  

I will reiterate if they are good tenants who pay on time like you say, I would leave them alone. 

@Wilson Lee

If they are paying the rent on time and the rents are at market, I would leave them alone. 

@Charles E Nielsen

I think with virtual access to almost anything today and being able to meet with anyone online via zoom, I don't think location is an issue in today's day and age.

What you need to do is a self assessment in regards to how much money do you have at your disposal, what your credit score is and what you income from W-2 job comes from.  These are the only metrics that really count when you are looking to buy properties.

If you are all set there, then you need to make a plan that works for you and then follow it.  

Good Luck!

@Audrey O'Connor

When I read your post, my immediate reaction is that your business model is yours.  

Along the same lines you are in competition in the real estate business with people who use other models and your challenge is going to be competing and making money on the same playing field as someone who is using a different model maybe completely opposite of yours.

I say if your model makes you money and gives you inner peace about who you are as a human being, then that"s great go for it.

Just keep in mind that not everyone subscribes by your model and you will be fine.

Good luck and I hope you and your husband are very successful in your journey.

@Anthony Weiss Kenneth, you bring up a good point and something that I should have probably added to my original post - what are the full terms or scenarios. It's the only fair way to compare.

I am also interested in seeing a full term scenario written out. I hope somebody reads this and writes one out for us to view.