All Forum Posts by: Eric D.

I have done quite a few ways. MLS is one way. Short sales that were not on the MLS yet, purchase at a sheriff's sale, put a lien on a property and redeem, buy a contract for deed in default, purchase a mortgage in default.

Some of the best deals you buy sight unseen...

Eric, do I understand you correctly? You use a total of 22% for vacancy maintenance and property management?  Yes, 10% for maintenance, 5% vacancy and 7% for management.  the 7% number is light for most SFHs.  That totals 22%

That also means you are paying 23% for actual expenses besides these. Can you break down the categories in this expense %?

Taxes, Insurance, licenses, utilities (water, garbage, elec/gas, etc.), HOA Dues, etc. You should be able to use actuals, but even if you do not have them, it will be close.

Are you not using your actual hard expenses for maintenance? How come?  

Because it is impossible to know the actual maintenance costs.  You can go years without any major maintenance, then have to repaint, install new appliances, fix broken plumbing fixtures, replace a roof or driveway, etc.  Remember, this is a general estimate number, meant to average the costs over the years.

In general, how does one move past the 50% rule to specific expenses if one doesn't have any properties and can't get specific from the current landlord?

It is difficult. If you are in an HOA that covers a lot of maintenance, maybe it can be a lighter maintenance budget. If your place is very old or in disrepair, you should probably make the 10% maintenance budget 20%. If you want, you can add back in any principal payments, although they are syill out of pocket expenses.

Remember, the previous landlord wants to make the property look better than it is, as the ROI numbers look better and it will command a higher price. I have seen some listings say "repairs and maintenance $300", when they take in over $15K a year in rents. It may well be the previous 5 year average, but what do you do when you need a major capital improvement, like a HVAC system or a 15K roof? It could blow away 5 years worth of profit. Even painting can be expensive when you hire a professional shop.

You say "They've been good renters for 3 years", but then they took the appliances.  I cannot imagine that someone would have been a good renter and actually passed a background check that would do that.  I would guess the credit scores were low.

I have had 100s of renters.  I never lost a single appliance.  Your appliances are in the tenants next rental.  Used appliances are nearly worthless, they likely did not get sold.

Typically, to get an investor non-owner occupied property, you need 20-30% down.  Often you need a sizable amount in the bank as well.

When I was purchasing, I needed 12%+ returns even with the $80-$100K down, to consider the property.

CraigsList, postlets and RentBits.  RentBits cost ~$109, but it is worth it in a slow market.

Good renters look 6-8 weeks out.  Anyone that wants to rent within two weeks is a HUGE red flag.

You will need two coats...  Use a flat paint for the first coat.  I would use the same color as you are going to use as a final coat.

I use a semi-gloss as a finish coat, as it is easier to keep clean.

Welcome.  Be sure to pick a niche.  Selling RE, investing in RE, etc.

I will get a loan using myself as the buyer and loan guarantor. Then, I re-title the property into my LLC.

I could get a notice that the loan is due, but never have.  Or I could quickly switch back to my name.

It is a pain if you refinance.  No bank wants to touch it.

Great job on getting the first deal.  A bit risky to borrow the down payment, and I also assume the fix up expenses.  Make sure you understand what it takes to do the fix up, so you do not go over budget.  Do not develop a mansion in a trailer park.