All Forum Posts by: Edward Burns

The way I read this, is he wants you to track down the deals, do all the negotiations, get the property under contract, and then if he is interested in the property, he willing to buy the property from you at 20% of the profit of what he would pay a wholesaler. IE you do all the leg-work, but I take all the profit.

Unless you get much better information on what he is really proposing, I would mot even consider this.

@Shaun Hatton

When figuring on repair costs, remember HUD owned houses are foreclosures and have been vacant for a while. Figure on having to replace the Hot Water Heater and replacing or repairing all the faucets in the house. The hot water heater will probably have all kinds of sediment and scale build-up. The faucets seals have probably all dried out and therefore will drip.

If the numbers work, fine. Be sure to get the current price of flood insurance not the one the current owner says he is paying. Also, while it may have changed, you do not have to have flood insurance to cover the replacement of the structure, or even the current value of the property, but just enough to cover the loan you have on the property. Basically, you are insuring the lender against any lost, and accepting the risk for your money invested in the property. The other thing I would check is what responsibility you have towards the renter incase flooding renders the property unusable. This will vary state by state.

You may also be interested in this cost-savings calculator for comparison of operating cost of various efficiency furnaces. It is from NICOR, a natural gas company serving Illinois, but the calculator can be used in any area. Please note any references to rebates are strictly for NICOR customers, but check with your gas company and see if they have a similar program.

http://nicorgasrebates.com/index.php/heer/residential-furnace-savings-calculator

While I am not from Detroit, there is no doubt in my mind that it will make a least a partial recovery. It is still located with an abundance of water and transportation options. I just do not know how long recovery will take. In addition, I do not know the real status of the infrastructure. However, even assuming a recovery occurs you are making a mistake if you try to evaluate property values in the Midwest and particularly Detroit based on values in the Northeast. So be careful and compare values and investments to others in the same area.

The other thing to consider is that garage door openers operate on radio frequencies and while newer openers are better, a garage door can be opened by a different opener. If the walk-thru door could not be locked, then the landlord may have to accept some liability if a breakin occurred.

First, you seem to be pleased with the service he has provided for your Sec 8 properties, so I see no reason to fire him.

Second, you made a mistake, a person that can handle Sec 8 housing may not be qualified to handle higher end property. Not saying that he can not learn, in fact he probably can and will. But right now he may not have the contacts and training in that area.

Third, Craiglist may not be needed or desirable as a listing place for some properties. So it may not be the best way to determine if he is doing a good job of advertising the vacancies.

Since you are happy with him managing your other properties, why not help him out some, suggest Graiglist, telling him the success you have had in the past. Make other suggestions or ask what he thinks should be done. You don't have to accept his advice but do tell him why. In short, give the guy some training on what you expect.

In addition, the weather definitely has factor, the Midwest has experienced the worst January in decades. The South has been bombarded with more snow that they are use to. I do not know about the Northeast or West, but you can check if needed.

@Duncan Taylor

You state that I should compare the $ to cost of commodities. That maybe fine on the surface but it is also very misleading. Yes the cost per barrel of oil has risen, but at the same time the efficiency in the use of that barrel has increased. You use to get 10 mpg from the standard automobile now you get 20-25 mpg. You also have much more efficient heating systems.

Electricity costs. You use to have to settle for incandescent lighting and CRT picture tubes. Now you can choose more efficient LED, CFL, Halogen lighting and LED TV's and monitors. So I can efficient light a house for less money that in the past.

Gold and other precious metals: Their cost have skyrocketed, but the cost of electronics (a major consumer of precious metals) has decreased as the amount of precious metals required in each piece has decreased.

I do not know the best method to determine The real changes in the economy (I wish I did), but I do know borrowing money today to pay back tomorrow may make sense to some, but personally not to me. Every one has their own circumstances and their own answer to this. There is no right answer for everyone.

First off is the assumption that you indicate the US Dollar has declined in value. When I checked the US Dollar over the previous five has not significantly changed in value when compared to the Euro, The British Pound, The Japanese Yen, The Australian Dollar, or the Canadian Dollar. Granted there has been fluctuations over the past 5 years but no significant overall change has occurred.

Second the housing boom and bust were generally caused by the move to McMasions not the need for housing, IMO. But with the exception of that aberration the average cost of a house as a percentage of income has not significantly change for almost 100 years.

Now you are left with the argument that borrowed will be worth less in the future, that is true if a) your income increases and b) you do not refinance that loan and c) the loan is not tied to economic indicator. Real estate has the advantage of being finite, ie no more is being created, but only a real increase in demand will result in a real increase in price. But that is real estate, not houses. With housing, The federal government indirectly with their guidance of Debt-to-Income ratios, and housing cost percentages serves to limit the housing demand.

Check prices at a Big Box store. If I remember Lowes will remove and dispose of used washer for free if you buy a replacement for $x (I do not remember the amount but believe it is around $400)