All Forum Posts by: Eddie Werner

You could take 50k and be a private money lender and make 10-12% returns and use the other 50k to buy a renal.  If you find someone local in the Charlotte area you might be able to work a deal where you lend an experienced investor some money, make some interest, but also have them mentor you in the process they follow from start to finish in using your money to acquire an income producing asset.  You can make interest on your money and learn the process as well.  Just make sure you work with someone that has a track record so you know your investment is safe and the knowledge you are receiving is sound.

I can only speak to Pittsburgh as that is where I invest but we are a lower cost rental market with stable rental rates, high cash flow, basically no appreciation (unless your force it by flipping).  If your after cash flow a rust belt state/city is where I would recommend looking (Ohio, Indiana, Pittsburgh, etc). 50k will easily buy you a house around Pittsbugh that rents for $800.  You just need a good team to support you because alot of the housing stock is older here.  If you can stay newer than 1950 build you will eliminate alot of headaches that comes with buying much older homes.

If I were in your shoes I would buy a good rental for 50k, rent it out, go to a bank and refi it, get all if not most of your 50k back out and do it all over again.  You can basically recycle your same 50k over and over again to keep buying properties.  You just need to make sure you buy a deal so there is built in equity to pull your 50k back out.

I agree with @Alex Deacon, New Ken home prices are normally not as high as you mentioned unless your in a specific neighborhood that supports that price.  I would also recommend pulling more comps to make sure your solid on your after repair value price.  If this is your first house you should get an inspection.  Most of these homes are sold AS-IS which means they just won't fix anything you find, but you can have all the inspections you want to gather all pertinent information so you can make an informed buying decision.  

I would also recommend joining the Pittsburgh Real Estate Investors Facebook page.  I would link up with other local New Ken investors to run the property by them to see what they think.  I am not active in that area but I know some people in the group are and could be of help to you before you close.

Interesting, the late fee is included in gross income and we take our PM fee from gross income each month so the owner collects most of it when we do disbursements.

Our leases have a clause where the owner covers pest control costs for the first 30 days of the lease, after that the cost is on the tenant as they brought them in or the way they are living is attracting pests.

Easiest way would be to use one of the BiggerPockets calculators, you punch in the numbers and it tell's you ROI.

Your accountant can help with inputting those transactions so it reflects profit and expenses appropriately.

Hopefully you have a mortgage and note so the investor's money is backed by the asset and when you sell his mortgage is satisfied.

Call a local settlement company.  The attorney there can draw up a simple purchase contract and facilitate the purchase and closing.

It's rare for a tenant to move after 1 year unless repairs are not being made.  If you fix issues that come up and provide a clean, functional place to live tenants will stay for multiple years.  The fees you mentioned are correct.  Just account for all costs when running your numbers to figure out what you can pay for a rental.

Some other ways to help boost profitability is to allow pets.  We charge a $250 non-reundable deposit for pets and $50/month per pet.  If you have others ways to boost monthly income (pet fee, garage fee, storage area fee, etc) it can reduce the other costs you mentioned.

I would contact a local entity attorney and pay a couple hundred dollars to have all your questions answered and everything set up properly.  It's well worth the cost.