All Forum Posts by: Fred Cannon

@Kimberly Kesterke it’s not you that has a credibility problem. Your tenant does. We all learn from our mistakes in RE. My first tenant I accepted post dated checks. Three months later I had my first eviction. Not a good start for me but I am a quick learner Was that the tenants fault, no that was my fault Another lesson I learned. If you allow a tenant to pay late with no penalty then every month you will be calling him for rent. The only time I use a tenant for work is to show a property. And I pay a showing fee. I don’t take it off the rent. This actually works well for me since I am an out of town investor and my properties are multi family. But I have to have a degree of trust in them to offer this. From cutting grass to major repairs I hire professionals because of lessons learned. I ONCE let a tenant negotiate lower rent for providing lawn care. Another lesson learned. Luckily all leases have an end date and I enforce that on all late payers and high maintenance tenants.

@Nick Rutkowski. I hope when you Just Do It you have a plan that goes along with it. Just Do It is a recipe for a disaster for someone with little experience, such as a young investor.

@Collin Vosburgh. So you are young and eager to become wealthy in REI. Well young man tread down this road carefully. If you only buy with cash at a young age don't think you will acquire enough properties to reach your goal. However if you hold too many marginal cash flowing mortgages you have huge risk of losing money. I would suggest you save until you have @30% down payment find a deal that cash flows minimum 8% Don't forget after the first rental save enough to cover repairs and capital expense replacement make sure you have adequate umbrella insurance. The go for # 2. If you follow this formula and don't give up your W2 job then you RE holding will grow slowly at first but then accelerate. I think most wealth in RE comes from appreciation over time and banking your cash flow to reinvest. Owning property can make you wealth, owning mortgage property with little cash flow makes the bank wealthy and the contractors employed and as Dave Ramsey says " Murphy will come knocking on your door". Good luck young man, be a wise investor.

@Jason C. My lease says that early termination of lease forfeits deposit. I charge an upfront admin fee that covers the cost of cleaning background-checks and pest control service. I have never had a tenNt move out where cleaning wasn’t necessary so I just started charging up front. I adjust the deposit down in dollars to reflect the admin charges.

@Stephen Mair. You can deactivate the ad once you find a tenant.

@Jane S. I would just like to add that phone calls and text are great ways to communicate but when it comes to the law you need e-mail communication to support your claims if you ever have to go to court I always follow up with an email after a phone call Also keep a diary of all conversations to reference, and save all your text as well. Hopefully you will never need all of this but if you ever get sued you will be glad you have it.

@CL Tumlin to invest after the age of 50. I hope that’s a good idea. I was 60 when I bought my first rental. Had a friend who got caught in the 2008 market cash and saved her from bankruptcy by buying two condos from her in short sales. They have been very good investments and now I have 7 properties bought after the age of 59 1/2 by using 401 K. Now that’s a different question. Should you use 401K money to buy rental property. My property values have at least doubled, some of the short sales have tripled. For my goal of having retirement income it has been a great strategy as well. I get around 5-6K per month of cash flow ( no mortgage payments on 5 of 7 units). I would say that if you invest late in life like me try to do so without carrying a load of debt. I will retire this year at 71 with around 100K of almost guaranteed annual income, and 1.7 million of debt free properties. When I started 12 years ago after a divorce I had 100k in 401K and 125k in home equity. In today’s market it is much harder. I want to buy a few more but property prices are very high in Florida and can’t find what I am looking for. My wife and I self manage. My wife just happens to be the friend I saved from bankruptcy. So not all good deeds are bad investments.

Looking at a property that is approximately 1.5 acres near a major golf destination ( 2 miles). On this rural property is a well maintained 3/2 mobile home with a two car garage plus a shed in the back area far away from the home. In this area are several homes in the 4-500k range as well as other well maintained mobile homes. I am considering purchasing this as a long term appreciation hold and maybe a short term golfers use or long term 6-12 month rental. Also this is in Florida so could list as winter over property for golfers or snowbirds.

List is around 100k. If I hold for a year or so I think I could resale for at least 120 Need to do some more homework about rental possibilities. Hope to get a showing this weekend Any input from anyone would be appreciated. Not much info I know I will update thread as I get more information.

This thread has been one of the best I have seen on BP.  Lots of great advice and lessons learned.  Thanks be to all who joined in   This thread could be a best seller on BP. Some one should put together top 50 threads and put it on a digital download.  Could be HUGE lol.  

Ok so if your goal is 100k a year income you are going to need to invest around 1 million at 10% return over the next 15 years. At today's prices a 10 % return on REI is obtainable but it's getting harder to find. It's a competitive market. Also figure you will have another million or two of debt to cover as well. This game is not get rich quick unless you are rich in the beginning. It's a game of adding assets as you go. Debt does not equate to wealth, just my opinion. That's why the banks have all the money and we have all the debt. Not trying to rain on your parade just saying don't quit you day job just yet. Have a plan and create the path. Good luck, stick to it and you will succeed and be successful make sure your deals have cash flow and appreciation. When using Other People's Money just remember they want it back. Advice from a guy old enough to be your Dad