All Forum Posts by: Henry Kaldenbaugh

@Mitch Casey, You are right. This market has been going up for almost a decade now. Our BRRRR fell into our laps almost by accident in January this year and we haven't found #2 yet.

Remember owners are getting old, infirm, tired, or worse, so something will turn up.  Just make sure you are ready when it does.  Keep turning over those rocks.  

The successful BP'ers had the advantage of starting at the bottom of the cycle.  Well, we are no longer at the bottom.  Prices and conditions have changed but that doesn't mean that you should pick up a bad deal just to be in the game.  This is a cyclic industry.

No, ask the seller for everything.  Remember this property is a business and the only way you can evaluate it is to see the relevant information.  If the seller refuses, then you have to be concerned that he is hiding something.  This does not mean that you don't do your due diligence with Planning and Zoning, the Tax Assessor, county records, etc.  You can do a lot of this online.

I was looking to bidding on a foreclosure sale on the courthouse steps and found out the prior owner had forestalled the lender for five years and had been living in the house for free for all of that time.  Why, he was native American with his postal address on the reservation.

No, ask the seller for everything.  Remember this property is a business and the only way you can evaluate it is to see the relevant information.  If the seller refuses, then you have to be concerned that he is hiding something.  This does not mean that you don't do your due diligence with Planning and Zoning, the Tax Assessor, county records, etc.  You can do a lot of this online.

I was looking to bidding on a foreclosure sale on the courthouse steps and found out the prior owner had forestalled the lender for five years and had been living in the house for free for all of that time.  Why, he was native American with his postal address on the reservation.

Excellent,  I thought you were in California, possibly the worst real estate market for beginners in the world.  If you could house hack a duplex-fourplex in Cincinnati, you are golden. Go for it.

@Patrick Crehan : You may have some difficulty finding a house hack in California within your budget, especially a duplex or triplex. Keep looking and run the numbers. Also, start talking to local lenders including credit unions and community banks. Your best bet might be a small 1200-1400 sq ft starter home in a C neighborhood. You may qualify for a first time homeowner FHA credit.

It would be most appropriate to ask for rent rolls, maintenance records, tax rates (public information available from County Assessor), before making an offer.  Your Real Estate agent should help gather this information.  Once you're in due diligence with an accepted offer it is appropriate to see all of the accounting including IRS schedule C's.  Remember you want at least three year's history.

You are buying a business that happens to be a rental property.

@Benjamin Manibog, @Tanner Marsey are right.  Spend the money on your first deal.  Phil Pustejovski's mentor didn't charge him $25,000.  He funded and partnered.  That is the mentor you need.

Another issue it is no longer 2010, but nine years and a mature market later.  The low hanging fruit is picked over.  However, every day there are landlords who are getting old or dying and their properties are coming up for sale.  It's worth it to keep looking.

You will want to see the rent roll, expense report, IRS Schedule C, Tax history from the assessor, Insurance policy and invoice.  go to the Planning and zoning office to find history of infractions, any prior inspection reports, Utility history.  And all of this for three years.  Basically, you want all of the paper history on the property.  

@Murray Smith: Not enough information in your calculator.  You need to drill down on the costs of the Refurb.  @Michael Noto is right about the CapEx and I agree with @Jason Medhurst on the numbers. If you can do the work yourself this can work. I see you're an architect so you should know your way around local construction.

Your lender might want to see six months of seasoning before committing to a loan on a Brrrr.

In a nutshell, You must live in one of the units and the net rental income must exceed the mortgage payment.