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All Forum Posts by: Derrick E.

Derrick E. has started 27 posts and replied 877 times.

Post: Best use of initial capital, focus on one or spread it out??

Derrick E.Posted
  • Investor
  • The Creek, WV
  • Posts 890
  • Votes 1,442
Originally posted by @Ronny Tiburcio:

Newbie here. So you guys are talking about putting down the minimum to give you the opportunity to buy more properties with the capital you have?

Correct. 

I agree with this method if the original poster was planning to put down $30,000 on a $100,000 home. 

It's hard to find financing for under $30,000, not impossible but a headache. 

Also, if someone doesn't pay rent, you now have to pay the mortgage yourself.

I prefer to remove a lot of that headache and pay cash for everything, but all I purchase are homes under $30,000. 

Post: Best use of initial capital, focus on one or spread it out??

Derrick E.Posted
  • Investor
  • The Creek, WV
  • Posts 890
  • Votes 1,442
Originally posted by @Lucas Cole:

Hey Thomas - could you elaborate on what you mean by "spreading equity as thin as possible?"

 He means putting down the minimum 20% and take out as many loans/or as much money as the bank will allow you to take out.

Post: Best use of initial capital, focus on one or spread it out??

Derrick E.Posted
  • Investor
  • The Creek, WV
  • Posts 890
  • Votes 1,442

@Lucas Cole I respectfully disagree with Ethan. In some markets it makes sense to spread yourself thin in buy and hold.

In the low income houses, which is what I do, I think you are better going all cash, which is once again what I do.

I am about 2 hrs east of you. We have so many cheap houses and deals here that it only makes sense to pay cash. Plus the homes we are buying for $30,000 or less are not going to appreciate much if at all over the next 10 years. 

I'd go solo and just pay someone to do the repairs. Once again, this is how I do it. In our area you can find cheap work from posting an ad on Craigslist. Be picky about the tenants, save the rent money and look for the next deal.

It's also hard to find a bank who will finance something under 40k, so sellers are limited to all cash buyers and really opens up some deals.

My last house I just renovated I have a total of $18,000 in it and rent it out for $600/month. I did a lot of the work myself and contracted it out one job at a time with my handyman. 

I just bought another house yesterday for $7,000. I will put less than 3,000 in it and will rent it for $700-$750/month. 

With these types of deals why do you need to share your money with someone else? Why take on the stress of leveraging yourself? I don't have to rent to the worst ppl because it doesn't matter if it sits empty an extra month, returns are so good and I don't be have a mortgage payment. To me, going alll cash removes a ton of stress.

Once again, I am only speaking in terms of homes under $30,000 and low income buy and hold.

Post: Buying 10 single family homes portfolio

Derrick E.Posted
  • Investor
  • The Creek, WV
  • Posts 890
  • Votes 1,442

@Lauryn Meadows I am from the same area. I know the houses you are talking about and I think you can find much better deals in our market. I sent you a connection request. 

Originally posted by @Josh Caldwell:

@Rich V. I have a guy who gets coin op washers and dryers for a super price  He gets them in as warranty returns and then repairs and resells them. So I put them in every unit as an added rev stream unless the tenant tells me that they have their own washer and dryer.

 I rent washer and dryers as well, but not like this. I just ask them if they have a washer and dryer. Most say no. I then offer to rent both to them for $25/month. 

Check CL and other places, you can find washers and dryers for around $100 and sometimes for free. 

They spend close to $25/month at the laundromat as well as having to drive there to do it. They can spend the same amount of money at the house whenever they feel like it, only catch is that they have to give that same $25 to me instead of the laundromat. 

Post: Offered $14,000 for a house and it was accepted.

Derrick E.Posted
  • Investor
  • The Creek, WV
  • Posts 890
  • Votes 1,442
Originally posted by @Thomas S.:

Sounds good, try to get $650/month if the average is $628. No reason to be at the bottom supplementing your tenants rent.

That's what I am hoping for. Decent street but within walking distance of the elementary school. I'm going to try for $650 at first, but I've been running numbers for $600 just in case. $650 would be great. 

Post: Offered $14,000 for a house and it was accepted.

Derrick E.Posted
  • Investor
  • The Creek, WV
  • Posts 890
  • Votes 1,442

It was a For Sale By Owner situation and the guy didn't even list pictures of the place. He was asking $20,000, and the property had been listed for well over a month. 

I went and looked at the place. It's actually a pretty nice but small 2 BR house. After the repairs/upgrades I should be able to rent for a minimum of $600/month. Rentometer has 2 BRs in the immediate are going for an average of $628/month. He has been renting the place for $500/month.

After looking the place over and knowing he most likely didn't have a lot of serious interest and limited to all cash buyers, I made an offer of $12,000. After negotiating we settled on $14,000 all cash. I'm giving my self an all in budget of $20,000 ($6,000 for repairs and closing costs.)

Repairs/Upgrades

Replace a small section of sub floor in the bathroom

Put new laminate flooring throughout the 800 square foot house

Install heat pump unit

Post: Tenant Rules set by Landlord

Derrick E.Posted
  • Investor
  • The Creek, WV
  • Posts 890
  • Votes 1,442

@Ron Rohrssen- People still use waterbeds in your area? If so, thats awesome. I'm getting all nostalgic after reading your rules on waterbeds.

Post: Raising rents 12% to market rents?

Derrick E.Posted
  • Investor
  • The Creek, WV
  • Posts 890
  • Votes 1,442

If they are good tenants then work with them and raise the rents gradually. Would it be worth it to lose them, have to deal with the turnover, and then get stuck with a bad tenant?

Post: What does it mean if no one is buying in an area?

Derrick E.Posted
  • Investor
  • The Creek, WV
  • Posts 890
  • Votes 1,442

I decided to look in my wife's home city area. There are 1200-1300 houses listed on Realtor.com, but not a single house was pending. Is this just something to do with the local RE people choosing not to list things as pending? Or does this mean no one is buying in the area? What does it mean if no one is buying?