All Forum Posts by: Max Drizin

Lots of assumptions are being made, if you want to think that US banks will fail (again) because of a Greek or Spanish debt default.

1. The US isn't primarily a lender. The money that comes from the IMF isn't really US money. In the long, long term, it's Chinese, it's national, it's British or Indian or whatnot.

Ok so the revision thing is weird. Caveats: everything in here is probably wrong, I pulled most of the information from the first post, it has full rental with 10% vacancy. In it's current state, I wouldn't show this to an investor or a bank. Don't kill me please.

Five-year pro forma

Why wouldn't you consider the Section 8 money as income? I don't know about legally or how you might run into these sorts of issues, but it seems odd not to do so.

To me, the entire point of Section 8 is so that people who don't meet the standard 3x rent criteria can get a place to live.

I have to agree with Brian. The 50% rule is a great system when you see a property and some rents, and nothing else. I can go visit a property, get some information from the agent or the seller, and not pester them too much if I'm just looking. My goal is always to get enough information to see if I want to look further.

If I was a seller, I would hate to have to give out every bit of financial information to every remotely-interested buyer, it just isn't worth the hassle. 90% of people will just waste my time.

With that mindset, I can go to a seller and ask the purchase price, or I can estimate everything from what's listed in the MLS or on Craigslist. I really don't want to have to call/deal with people if I don't have to, so I try my best to make the most informed decision.

But I'm digressing, as always. Since we have all of the expenses, or at least enough to do the rest ourselves, we shouldn't be using 50%. We should be plugging in the numbers as they are and seeing how it is. I'll have an edited post with a pro forma in a minute.

If the tenants moved in a bit ago, you have the rest of their leases ahead of you, which is good to start with. Do they know you are a buyer? I've never gone through a property as a "buyer," I'm always with insurance or looking at a unit. But that's neither here nor there.

For other expenses, you might need to look into what you are calling maintenance. Things like lawn care even factor in (I pay $27/month/property for God-knows-who to take a riding mower around the place once in a while). There's always little things to be done, whether it's a leaky faucet or a broken gas range, paint or something. You've got plenty of time on the roof, assuming it was done well.

Then there is emergency stupidity. You never know when you will get a call from a tenant saying "Someone just drove a car into my house" like I did a couple of days ago. It's always an endless set of surprises.

It looks like a great deal, honestly. I don't know if you've done all your math on the property and the property around, but it seems like you have something good.

If you are feeling saucy, check out of one of the crimewatch websites. I found one last night while I was looking to get a parking pass for my street, and it plots all the recent crimes and sex offenders. It's http://www.crimereports.com/.

Kind of scary, really. But if you'd like to go over more stuff, feel free to call/email me, I'm around all day and night, and I'm sure other people will give their advice here.

Obviously, if the check engine light still works, it's in good enough shape to drive :P

Have you been through the property? Any plumbing/etc. been stolen out since it's been vacant?

Especially in worse neighborhoods, anywhere vacant for an amount of time seems to lose all of its copper piping in short order. It's the only one that isn't boarded up?

Sounds like you don't have the best area on your hands, especially if you wouldn't want to be there.

If you don't feel comfortable collecting rent with the sun down in the evening, you probably shouldn't go there as an investor.

I was actually talking with one of my brokers yesterday, with whom I am starting a residential brokerage with. He's also one of the top agents, if not the top agent, in our area and niche.

I was worried that new agents, without any previous contacts, would have trouble getting leads, especially if they weren't buying them and farming them to call centers.

I asked him how he got leads before he had the contacts in place. His answer? "The phone book."

I had one of those moments where I waited for a "just kidding," but that was it. He said he would go area by area, calling every owner until he got leads.

Though the days of that for us are long since, I still browse Craigslist for people selling property. Investors who have bad properties on their portfolios are sometimes interested in dropping their turnkeys to get back in the black.

A lot of it is just luck, too.

I use it as a complement to brokerage. Brokers would otherwise have a one-off client, buying or selling a property, and then ending the relationship.

With an attached management company, they can keep their clients, and almost ensure future brokerage with the property owner, since there's a sense of loyalty, even without a contract.

Plus, you usually need a broker's license to be a manager. One of the things you need to look into is how to minimize costs. Management isn't always time-intensive, but it can be off and on. You need to minimize the amount of time you do it, so that it can truly be an "on the side" sort of thing, and you only have to make the occasional tenant call.

Side note, sometimes you get interesting calls from your tenants, with such conversations as "A car ran into the house today" or "Yeah, we do have 12 chickens in the garage."

Moral of the story: never be surprised. Never. There is nothing that can happen that won't happen to a property you manage. You will have some of the most interesting conversations with tenants and with the owners when you pass along the message.

Depending on what you are doing, it can definitely be worth it.

Me and my partners are starting a residential brokerage in the next two months (when our office is finished), and one of our requirements for agents is that they have to post something at least once a week.

It does a few things, I think. First, it is good for search engine optimization. More content/keywords makes your site more relevant, which pushes you up in rankings. Depending on your business, that can be important. We'd like to drive leads from our site, and that's one way to do it.

Another thing is that it establishes credibility to a professional in an area. Using the blog creates readers, especially in such a niche. There aren't too many people in real estate blogging, so if you have a good blog with a niche, like an area or a field, then you are basically the only person in that.

It also keeps people learning. For our agents, it keeps them sharp, maybe researching an area to get figures for a post, or learning more about a kind of deal. It lets them showcase a talent or a piece of knowledge and be creative while doing it. From a happiness standpoint, doing something like that is one of the most productive times of the day.

If you are doing a blog for your free time, and you aren't necessarily making a business around it, or putting it on your business site, you can always put advertising on it. If you do well and get readers, you can have enough traffic and put some money back in your pocket.