All Forum Posts by: Evan Thomas

definitely go to any BP Meetups put together by Darren Sager. They're typically in WeWorks with two hours of networking and an hour long presentation by a BP podcast guest. 

Hey @Matt Murray, I work with a real estate agent in the White Plains area who's been incredibly helpful and very communicative. PM me and I'll shoot you his name/# so it isn't just sitting here on the forums. 

How long have they been renting? Learning from my grandfather who rents a few dozen units, he tends to help his long-term tenants out from time to time when they are good tenants. If they have lived or plan to live there for more than 2-3 years, it might be worth the cost to replace the windows vs. cleaning/maintenance costs for a bad tenant & vacancy. 

You pretty much highlighted the pros and cons in your analysis. The low down payment is great, but if you don't cash flow your COC return will be tiny. And if you don't cash flow, how do you expect to pay the seller the balloon after 5 years? If it's turnkey it'll be tough to refinance it for a higher amount than the $48k unless it appreciates in that time. You might want to push back on either the 8% interest or the $45k price to find yourself some margin.

It's a constant struggle some times, but you have to understand that the banks really do not want to repeat the mistakes made during the early 2000s where people were loaned money which they could not repay. So if you want their money, just do your best to be proactive and ask the mortgage broker you're working with what you can do to accelerate the process as often as you can. 

If you're too tired of the system, you could try direct commercial lending, hard money lenders, private money, etc. to fund your deals instead, but they have their own risks. 

In general, if you're buying a townhouse that doesn't have an HOA (and thus no power-hungry HOA members or random assessments), your costs will probably be lower because you get to pick your paint, your lawncare providers, etc. which keep your costs lowest. Townhouses won't have many conditions to meet when you want to lease them out.

When you want to sell in the future, your buyer might not want the added costs of HOA fees. But it can be simple to own a condo and lease it out in some areas. You just have to know what the HOA for that condo expects (board interviews with lessee's and condo committee, additional terms of the lease dictated by the HOA, etc.).

You could also broaden your geographical footprint. Maybe LA is saturated, but smaller towns and cities on the periphery of LA could be ripe for the picking. A lot of successful RE investors focus on secondary or tertiary markets to be the big fish in a small pond and stack up deals by being the most knowledgeable person in the area. 

Have you checked with that property management company who quoted 10%/month and other property managers to see what the actual rents are? Do you know what the vacancy factor will be?

How much of the property have you seen? Can you tell if there were squatters or anything else that could've caused damage while the bank has controlled it? 

Can you figure out what the other monthly expenses will come out to, possibly leveraging those PM companies? Those are probably some of the next steps you should take, but not all of them. 

The best tactic is to give them your best offer and let them respond. If they say no right off the bat, that's OK. If their property is too highly priced it'll just sit on the market. You could then send them the same offer every week as they realize their price is too high, as Brandon Turner does. Maybe they'll come down from their price, maybe you'll just need to move on to another deal that makes more financial sense for you. 

The 50% is better for a first look, but once you've listed out all of the expected monthly expenses, capex, and mortgage/insurance as you have, you can use the $767. 

Have you thought whether you'll manage the units yourself or if you'll hire property management? that's another 10% in expenses.