All Forum Posts by: Eric Bowlin

I HATE carpeting. Hate isn't a strong enough word. I always remove carpets and install laminates throughout. Vinyl click-lock style goes into kitchens and bathrooms (looks better and is higher quality to sheet vinyl).

Higher end properties get hardwoods or bamboo throughout and tile in the kitchen and baths.

All options are more expensive than carpets...but you will replace the carpets almost every time you change tenants. After one or two tenants you've already made your money back and had no headaches!

I agree with @Damien C. .  

Your money is worth a lot in other states but isn't much in your neighborhood. You can barely afford a duplex in CA while you could buy 4 or 5 properties elsewhere. Find someone you know and trust and start passively investing until you can afford to buy something bigger in your area.

@J Scott Yes good point I forgot mention that so thanks for catching it I was writing it quick on my phone. 

The cash should be available to make the offer, but if you use it on another deal then you risk your deposit with financing. I apologize for missing important detail. 

You can offer any deal as a cash deal essentially by not putting a financing contingency in the offer. You accept the risk of losing your deposit should funding fall through. You might be able to offset this by putting in a good solid 'inspection' contingency that carries you long enough to check for financing or just stall with giving the deposit should you offer no contingencies.

This tactic is common with REO's (who cares how you treat those banks) but it is not the right way to go about business between professionals. You should never be deceptive in your dealings because reputations do follow you.

A REALTOR might never say there is a 'standard' price because this would violate the laws against collusion on prices (I'm a REALTOR btw). Markets do tend to dictate prices and you will find listings that are 'entry only' with no commission all the way up to 10% depending on the difficulty of the deal.

I'm sure you could find a REALTOR willing to work with whatever commission is offered. Some of the best REALTOR's work at smaller brokerages without the fancy names and offices. More clients means less time with each one.

If you are really set on having this agent..you could always work the higher percentage into the price by offering a higher price and asking for the difference to go toward commission. This does make you less competitive though...I had two identical offers on price, but one asked for higher commission...You can guess which one was picked. The buyer was not better served by paying a higher 1% higher compensation and was in fact hurt by it. 

@Elizabeth Colegrove Excellent points! There are definitely numerous ways to achieve wealth in real estate and we all have our own ways.

It is my personal belief that cash-flow is the most important aspect, far more than capital gains. Robert Kiyosaki wrote in one of his books that he had something like 3000 properties during the crash, but made out fine because every single one had solid cash-flow in solid neighborhoods. Who knows how true or exaggerated this is coming from a person trying to sell books and seminars...but I think the concept is right....Good cash-flow will succeed in every market.

So to reiterate my first point, many people fail in rentals focused on cash-flow and others succeed with flipping or speculating in property appreciation, both of which are focused on capital gains. Guess we all have to chart our own course! I love BP because I get to read everyone's approach and maybe adopt some ideas for myself.

@Minka Sha I think you should follow @Elizabeth Colegrove with her advice about tightening the offer by offering lower cash but compensating them with the high likelihood of closing. 

You may own more properties than me... But who cares. My wife and I retired from our day jobs at 26 years old and live very well now off our rental income for the last 4 years and have only grown faster since we started full time. 

Why do we discuss our different opinions and approaches if people simply attack and discredit anyone who disagrees. I didn't realize that's how things were here at BP.

I don't know about your state..but someone with a Construction Supervisor License with liability and workers comp has to pull the permits for a new house here in MA. 

You might be surprised what it costs to build. Most contractors are not making a killing building a house for you. If you are getting 2 or 3 quotes in the same ballpark...that's truly what it costs to build it. 

You can save a few bucks and carry all the liability if someone gets killed on your job. You don't know the OSHA rules which are in a 1.5" thick book with 8 font so they will come down on YOU when it happens.

Building a house is not something an amateur should be doing. Get a GC and do it right.

Thanks @Joe Villeneuve . I agree with you completely.

@Minka Sha Why don't you reverse the system. Instead of looking at properties and discovering what you may earn... wasting time to find you'll make 27 bucks a month.. Figure out what you want to earn then find properties that may meet those parameters. 

I will continue to say it's bad for 2 reasons

1) Low return: 180k purchase. I'm assuming 25% down means 45k down plus closing costs (say 5k)

28/month income + 118 property management = 1752/year 

Return = 3.5% and you have to do all your own work. Plus you said the property needs some upgrades...CD's are starting to look pretty competitive...

2) Risk - This return is not risk adjusted. Consider the possibility of just ONE eviction in the next 5 years. You will lose 2-3 years income on one eviction. 

This is just my opinion...looks terrible. I think you can find something with a 20%+ return.