All Forum Posts by: David Krulac

In Bigger Pockets Podcast #82, I talked about my first purchase.  Bought it at an auction, property was owned by the statem paid $27,000.  Didn't pay rent or mortgage for 6 months, and then 100% financed.  first moved in and house hacked bedrooms, then rented the whole house and moved out. Eventially sold for $99,999.  House was 17 years old all brick rnach house with Andersen windows, solid hardwood floors, gas heat, ceramic tile baths and a new 6 month old roof. 

This year we had a heat pump cleaning, testing refrigerant charge (didn't need any added) and a capacitor replacement, bill was $157.05, factor I consider are the age of the existing unit, if it needed a charge, potential leak, cost of refrigerant (over the years there have been many varients of the type of refrigerant).  There is always the risk that after you do the repair, the the system fails quickly after that.  We have had systems fail and need replacement as soon as 10-12 years, and others lasting 30 or more years. 

@Mary Jay

As a preventive move would be for you to trim any branches that hang over the property line onto your property.  This might lighten the weight of the tree toward your property;  so this might help or not.  One of my friends had a house where the neighbors tree had a huge branch that crossed the property line and was actually overhanging and touching his roof. 

@Mark Dutton  When i started, I had nothing.  Nine month into my low paying job in a new city, I had no savings. If I didn't borrow, I would not have been able to buy any property.  The first 11 properties that I bought were all 100% financed, in one way or another, because I didn't any money. The first mortgage that I got was 30 years fixed at 9% interest.  My philosophy at the beginning was to borrow as much as I can for as long as I can.  Years later I had 50 mortgages at one time, and it seemed like all I was doing was writing check to mortgage banks and lenders.  It also seemed like I was working for the banks, as that was my biggest expense every month. In 2007, I decided to stop working for the banks.  I sold some properties, paid off those mortgages and took all the excess proceeds and applied it to other mortgages. I also make extra payments on existing mortgages.  And unlike the first 11 properties, the next 100 properties that I bought were all zero financed and 100% cash, no mortgages.  I got down to 2 mortgages from 50, sold one and ws cruising along with a 2.875% interest mortgage that I had refinnced in 2013.  Due to the low interst rates, I wasn't planning on paying off that mortgage, but in 2021 deided to sell the property for 3.6 times what I paid for it and take advantage of the price run up and market condtions.  vwen though I thought I might not get any more mortgages, the low interst rates were too tempting, so I got  bunch of sub 3% mortgages.  I wish I had gotten more!  Oh, how nice it would have been to refi everything at sub 3%. The point is things an times change, the market chnages and your investing career changes.  Be flexible, adjust to the times, and use financing judiciously to advance your investment goals.

David Krulac

Bigger Pockets Podcast #82 

@Dee Mandrekar for Denton County Texas, according to the HUD website "HUDuser.org"

the Median rent for a 4 bedroom house/apt/condo could be $3,980 if it is in zip code 75001.

Here's the total list for Denton:

https://www.huduser.gov/portal/datasets/fmr/fmrs/FY2025_code...

@Jay Hinrichs

One friend of mine went down to Florida, in the Naples area about 2010 and bought ten rental properties, subsequently when they doubles in value he sold them.  

Another friend bought a condo in Port St. Lucy about the same time for about $40,000, that previously had sold for $200,000.  He rented the place to tenants that formerly owned a condo in the same subdivision and had lost their home in foreclosure.  They paid their rent until another foreclosure became a rental down the street and the rent was cheaper.  My friended up lowering his rent so the tenants would move, maybe an idle threat, maybe not. 

A third friend of mine was looking on the web and saw some "deals" in Cape Coral.  He wanted me to travel with him and buy some of these deals.  We had a history and had partnered on over 200 deals so far.  I declined the vacation/deal trip.  He went down and got showings for a bunch of houses in Cape Coral with attractive prices, but came back empty handed.  When I asked why he would pass up such lucrative deals, he explained.  The best house he looked at was itself was in good condition, but the house next door which wasn't shown in the web photos was boarded up and looked like it had been vacant for years.  He said there were 10 houses on the street and 3 were boarded up and abandoned, and that was a typical street that he had toured, throughout Cape Coral.

@Jay Hinrichs  amen, Brother.  We bought 117 lots in one development, where the developer was shot and killed while in bed with the foreman's wife.  The company went into Bankruptcy and the BK judge ordered that the majority of the lots (about 3,800) including ones already sold and many built on; be organized into one brand new municipality.  Taking the lots which were parts of three other municipalities and uniting them into one new "town".  We bought lots as low as $50 and sold as high as $80,000. Most did not have those kinds of spreads.  From 2000 to 2008 lot prices quadrupled, what a great time to be a seller.  Then from 2008 to 2015 lot prices dropped around 50% to 60% sometimes more.  There had been many new subdivisions created before 2008 and the overhang of new lots not sold reached out for many years.  With the economic drop, and oversupply lot prices had nowhere to go but down. Fast forward to today after the recent past escalation is real estate prices; over the last 6 months 21 lots have been sold 0for between $5,000 and $25,000.  So much for prices ALWAYS rising.  

Section 8 rents for the entire country by locality are on the HUD website, HUDuser.org look for Fair Market Rent (FMR) there. Their FMR is the Median Rent for the area, so by definition the FMR is in the middle with 50% higher and 50% lower in that marketplace. In some areas the FMR is for a whole county in other areas its by zip code. HUD comes up with these figures by doing rent surveys with landlords, and I have participated in many of those surveys over the years at the request of the local administrator of the Section 8 program.

@Don Konipol  Great post!  #7. In 1971 mortgage interest rates were 7%, In 1975 mortgage interest rates were 9%, and in 1981 mortgage interest rates were 15% or more.  We have been spoiled by 2% & 3% interest rates, which we may never see again.

I would add a few more incorrect beliefs:

11. All the rent money goes into the owners pocket.

12. Vacancy/turnover is a minimal consideration.

13. All real estate owners are millionaires. 

besides looking for leaks, we look for raised shingles, loose shingles, some shingles on the ground, etc.  We have repaired and not replaced roofs when appropriate.  We sold a house that we had a total roof replacement, within a few year the new owner had a leak of the flashing around the chimney.  They decided to replace the entire 50 year shingles that were only 4 years old and replaced it with a metal roof.  imho, that was very overkill.  We have also had houses with slate roofs that were 120 years old while our neighbor with a similar house was on their 3rd roof replacement.