All Forum Posts by: James Call

@Sara Roane,

I lived in NWA for years.  I was a realtor in Bentonville, Rogers, Fayetteville, Springdale area.  I love that place. 

I currently sell landlord insurance in Texas and there are some great opportunities in Texas as well.  

I would really recommend that you find a good realtor in the areas that you are most interested in.   Someone who is listing a lot of multifamilies and ask them for a list of their current and past listings.  This helps you see what kind of experience they have. 

Investing groups can be a little tough.  I have one on Linkedin for Northwest Arkansas, but it is overloaded by real estate agents, and not really enough investors.  

I wish you the best on your investing journey!

@Kenneth Kilgore,

Welcome to BP!  You too @Michael Onstad.  

I agree with @Jim Cummings comments about getting a plan in place to pay down you debt as you can.  One thing I would clarify is that you don't have to be debt-free to start investing. 

If you are working and paying down while accumulating your down payments, that is the best way to go.  As time goes by, those debts get to be a smaller and smaller part of your expenses.  Your investments will bring in more and more.

Enjoy the journey,

James

@Jonathan Ard,

We are neighbors.  I am in St. George Utah.  

I agree with @Stanley Bronstein that you should get an attorney in each state you purchase a home in.  We have purchased in different states and there are nuances in real estate law in each state that make it a little different. 

 While my lawyer in Arkansas may be a great friend and a wiz at real estate, he would have very limited exposure to new laws and issues with real estate law in Texas.   If I were doing a 25 million dollar deal, then I would be able to afford him to work for me for some time to learn about it.  

If I am buying a $200k house in Fort Worth, then to pay him a few thousand dollars to brush up on Texas law is going to be a significant piece of my investment.  

I would also recommend that you take a look around here on Bigger Pockets and see some of the members who participate who are attorneys in Texas. 

I wish you great success on your real estate journey.

@Eric Chase,

I agree with @Rick Pozos, you need to figure in the cost of taxes and insurance and see if the numbers still work.  

I have seen where in different markets you get different benefits.  Some are great for cash-flow, others have fantastic appreciation, and others seem to just be easy to start investing in.   

You have to see if the numbers make sense for you.  If you have crazy high taxes, that is usually made up for in higher rents.   

I would also just take a look with @Aaron Bihl and see if he thinks you can protest your taxes for next year.   Maybe something has changed from last time you looked at it, or he has some other numbers.  Either way, you don't lose anything by looking at it.  If you can save $1000 per year, that is gravy for you.  

We see a lot of investors who look at taxes and insurance as "fixed expenses" in the sense that they can't be changed.  We have seen folks save thousands of dollars per year by getting those taxes down or lowering their cost for insurance or both.  

If that isn't going to work for you, I agree that you either need to look at raising rents or selling.  I would just say that before you sell, you want to make sure you have another purchase lined up that is BETTER that what you have today. 

Good luck!

@Terry Champagne,

Thanks for sharing this deal.  I have always been interested in self-storage.  In my area, it seems like we have to build them since they rarely come up for sale. :)

@Adriana Diaz,

I think you got some great advice here.  About 10 years ago when the market was really tough, I worked as a realtor for a company that focused a lot on PM and rentals.  We were able to get a ton of clients and rent a lot of property.  

You want to find out what that next door unit is renting for and see how that compares to your place.  Take a look at the ads for your property  as was mentioned.  I also like the idea of asking a friend to call your agent and see how they respond.  

As far as property management options, there are some folks who responded to your post who are property managers like@Kyle Mccaw and @Edgar Barrera.  I would contact both of them and see how you like them.  

I had a client recently ask me for a property management referral.  I wasn't that familiar with their area, and I let them know, but I googled their area, called about 10 companies and asked about my client's situation.  I found a couple I thought might be a good fit, and one who seemed really sharp from their feedback online and from the phone call I had.  

Good luck with your rental!

@Ty Ottaberry,

I agree with @Marcus Auerbach.  I would reach out to people.  If someone contacts me online and wants my info, I won't share it.  There are too many scams out there.  

Thanks,

James

@Ryan Betzing,

Your numbers look pretty realistic.  

I like your comment about how "fun" taxes and insurance are.  I don't know if I would agree with that adjective or not! :)

I don't see anything standing out in your calculations. What are you seeing on your other properties? This one looks like it is going to give you about 1% - 1.5% return on the value of the property after debt service. If you look at NOI you would be getting about 5% Cash on cash return if you were to pay cash for the whole property.

The paydown on the loan is part of your ROI on this property, so you want to see what your put down on the property and what you get back. I assume from your comment that you didn't pay that 115-120, so if you are putting 20% down on the house, then let's say it is costing you about 80K and you are putting $15k down (just for easy numbers).

If you get the paydown on the loan, appreciation, and the ($124*12 = $1488) per year back on that $15k, you are getting 10% cash on cash, and then with the paydown it goes way up to something like 40% ROI.  

With a property manager in place and hopefully no catastrophic damage to your property, that is a very good return on your initial investment.  

The paydown on the loan is what makes the numbers look skewed a little.

I hope that helps!

@Andrew Durosola & @ShaVontze Young,

It looks like there was a little bad info from the mortgage guy, just because of different terminology.  As @Greg H. mentioned, once you get a house and get a loan on it and pay the down payment, and "close" on it at the title company, it is considered that you "OWN" the house.  

We all know that the bank owns us now, but technically it is your house. :)

The kicker is that when you get a loan for your own first home, you can usually get into it for 5% or even less down.  I have found that when I buy property for investment, I want to put 20% down to just keep my payments in the "safe zone".  

You will want to just tell the mortgage broker or loan officer that you want to buy an investment property and rent it out.  They will help you see what loans are available.  I would also talk to a few different loan officers and ask them what is required and how it works.

We are looking at getting a new construction loan and we have talked to a couple of different places, and it is crazy how completely different their offerings are.  

I wish you great success on this.  It sounds like you may want to find someone to work with or spend a little more time reading in the forums here at BP before jumping into this.  Real Estate investing is not for the faint of heart, and if you don't know much going into it, you will have to learn the hard way.  I would spend a couple of months reading here for an hour or two a day before going to the bank or getting a realtor.  

@Alex Nelson, 

What did you have in the purchase contract about deposits?

I also agree with @Jay Hinrichs that you can get a lot done by going to the courthouse.