All Forum Posts by: Gerardo Dominguez

@Joel Ortiz I had issues with Aaron of the CAI group as well. Many issues actually lol But of relevance to this topic, I had trouble doing a cash out refi loan because of the way I held title. I ended up quit claiming to get my LLC's name on to title as tenants in common w/ my partner's LLC name. We ended up getting rejected by several lenders because, basically, they don't like seeing 2 LLCs on title. It "complicates" things. We then removed my partners' LLC off title to try to alleviate that problem. However, many vendors wanted the title to be in place, as is, for at least six months. This is known as the seasoning period. We had inadvertently restarted the clock. These were stupid mistakes that could have been easily avoided had I been working w/ a real professional. In short, I'd echo what @Dhru Das said above; get an attorney involved to ensure you receive clean title and get it recorded properly.  Good luck!

@Kyle Mack  Congratulations!  Thanks for sharing your success story.  Best of luck on the others currently in the pipeline :)

@Deanna Maddrey Hello and welcome to BP! I would strongly suggest you take several months up to a year to just focus on education and networking. The link below is a great place to start; aka, BP-University :) Also, look around under the Community tab for the "Find Members" section to reach out to local investors. If you can't find a REIA on this site there's always Google. I think networking with other local investors is a huge learning opportunity. Also, regarding the license, make sure that it makes sense for you. Here in IL it's fairly expensive to be licensed so I always urge others to consider the time/ money investment involved with getting licensed before they jump in. Good luck on your investing!

https://www.biggerpockets.com/courses/a-beginners-introduction-to-real-estate-investing

@Seth Thompson I think it's a great tool to have.  However, before you decide to get it, make sure you have a good understanding of all that it entails.  The cost alone is worth taking pause.  Let alone the time investment to get licensed.  As with anything else, there are pros and cons.  I would strongly suggest you write them down (pros and cons) so you can better determine if it's worth it to you.  I did the same thing and it ultimately made more sense for me to get my license.  Good luck in your investing  either way!

@Taylor Price Welcome to BP! Make sure to check out the BP beginner's guide. Also, look for a local REIA so you can start networking with like minded people. Best of luck to you in your investing :)

https://www.biggerpockets.com/courses/a-beginners-introduction-to-real-estate-investing

@Robert Johnston In Chicago, security deposits are a pain in the butt so I just charge a "Move In" fee instead; non-refundable.  In your case, just make sure you cover your you know what.  Take pictures and/or video of the apartment once it's vacant.  Especially of anything that you're going to charge them for.  Assume the worst case scenario; Your tenant will sue you for "overcharging" them on repairs in order to "steal" their deposit.  So charge whatever you want, just make sure you have proof and are able to justify the charges.  I would suggest shopping around handymen in the area and getting an average rate to use as a basis price point.  As far as material, you can just look online and figure that out.  Good luck!

@Ryan Tuleja Welcome to BP!  Look in the "Find Members" section under the "Community" tab to find other investors in your area.  Also, make sure to read the Beginner’s Guide: http://www.biggerpockets.com/real-estate-investing

It's good that you're willing to offer some value add in exchange for time w/ an expert.  Good luck w/ your first investment!  Keep us posted :)

@Jonathan Woelfel  Every lender is different.  But typically you can expect 6-12 months of a seasoning period.  

This may be a mute point for you but I'm going to tell you anyway because I got burned by this. Make sure that however you're currently holding the property doesn't change during the seasoning period. In my case, I owned my 2-Flat under my LLC name then quit claimed to my personal name (long story don't ask lol). Even though I'm a single member LLC and can prove that I'm the owner of said LLC, it didn't matter. The seasoning period reset when I made that change. Woops!

I would recommend "Prospect Mortgage."  Not sure if they're in your area, but they're worth checking out.  They were the only ones that didn't make me re-start the seasoning period.  And the customer service was great overall.  Good luck!

@Elyse N.  Welcome to BP!  The properties in my area are way too expensive so I chose to look farther away as well.  As you know, the further away from downtown you go in the city, the cheaper properties become.  I live 20 miles away from my rental; 30-45 mins depending on traffic.  I have property management in place so I rarely "have" to go to my property.  However, I still like to go at least once a month.

Good luck on your first rental!  Keep us posted :)

@Manoj Sadasivan  I would pass on this one.  I don't know your area so this may be a mute point but in Chicago (my area) landlords have to pay for the water bill.  Also, depending on the set up of the property itself, landlords may have some utility expense for communal areas.  If that's relevant to you, make sure to add that expense in your numbers.

Also, you didn't account for the various reserve buckets. Not sure if there's an official term but you need to set aside for a combination of the following items: CapEx, Repairs, Vacancy, Management. This is definitely relevant to you since you're planning on keeping this for 10+ years. For example, you might have to replace a roof during that time, replace some appliances, redo floors, etc. I'm pretty conservative so I would recommend at least 25% of the gross rent for all those items. Currently, I only see ~9% for your management. Make sure you account for the other stuff.

When I run your numbers, adjusting for 25% reserves and $50/ mo utilities, I estimate the cashflow to be $200/mo.  That wouldn't entice me to invest in a property that's in a "rougher" area.  The main advantage of investing in those type of areas is that you can reasonably expect higher cashflow.