All Forum Posts by: Jay Neaves

I agree with Jason Jones about the Rich Dad series, there is also a great book I would recommend called The Real World of Credit which is great for helping you understand more about leveraging.

I disagree Ibrahim S. I think the banks have a lot of incentive to release the inventory because their lending capacity is limited by the amount of amount of bad debt on their balance sheets with the new regulations. Therefore, it's in their interests to get the bad debt of the balance sheet.

The foreclosure inventory is costing the banks money and they'll try to offload them. They have tax implications for holding them and the only way the banks are going to move forward is to turn that bad debt to good debt. I think the way they are getting rid of them may be changing slightly though.

I agree with Uwe S., different market places are at different levels of the bounce back. This is going to mean that in some markets there are fewer deals to be had, while in others there are plenty.

I think we can expect a second and even third wave of distressed properties coming to market in the next 12 months. Foreclosure is giving way to short sales and there are still a lot of properties that are deliquent by 6+ months which will probably end up on the short sale market and also there is a massive number of properties (reports say up to 1/3) under water. If those owners need to move, they'll have to sell short sale too.

I think it depends on your personal investment strategy and what you want to accomplish but I've pondered the same question and I think overall, SFH is the way I'll go. There are a couple of things that you haven't mentioned that steered me toward SFH.

Taxes & Insurance are higher on MF which has an impact on your cash flow. You also have issues of tenants impacting on each other, for example, two tenants not getting along or one neglectful tenant damaging the property and affecting the others.

I heard a story the other week about a horder tenant in a duplex - it wasn't pretty. SFH requires less "management" too, calculating utilities, waste etc. if much more complicated with MF. You also mentioned vacancy being a pro on a MF, but it can also be a massive problem. If something bad happens to a property and you have to vacate the building, you lose a whole chunk of money.

MF has it's place, and I think if I was buying a Duplex to live in one side and rent the other I'd take it on, but ou have a lot more to consider and do with MF than you do with SFH.

I wouldn't use a financial reward linked to work done. It may set a precedent with the tenant "finding work" to do with the expectation that it will result in a benefit to them.

For me (call me a skeptic!) I don't understand why someone would want to invest in a rental like this without some underlying reason. Perhaps they're looking to sweeten the situation to buy the house? Perhaps the "free" materials are the proceeds of something undesirable? If it is all completely legit, you've found a dream tenant, but what if it isn't?

If these "free" materials have come from illegal means and this guy is caught, you could find the authorities knocking at the door of your property to rip it all out! I think it pays to be cautious and to consider the situation carefully. If something seems to good to be true, it usually is, and if you reward these things, you not only take money out of your bottom line, you also risk having to make good any problems that arise.

To give you a brief overview of my situation... I'm from the UK, my wife is from Michigan. We currently live in the UK but will be moving back to Michigan next year. I'll be a full time real estate investor.

I'll have approximately $300k start up capital. The concern I have is that I won't be able to leverage. My plan is predominantly buy & hold (although I'll probably be throwing in the odd flip, if it makes sense) so leverage is going to be key.

I will have very little in the way of "documentation" (no tax returns etc.) but I do have a US bank account that has always been in very good order and a US credit card. Therefore, I have a fairly solid credit score. So my question really is what are my chances on securing conventional lending?

For me, I have large down payments and a decent credit score. Against me, I have no tax returns and little in the way of bill paying history.

Any advice would be really appreciated.

Hey John,

The cheapest way is to do it yourself. It's remarkably simple to do with wordpress. You'll need to buy your domain names (URL) and set up a hosting account. Hostgator and GoDaddy are the most popular hosting services and you can buy your domains from them too. You install wordpress and you're off and running.

If you're not interested in doing it yourself, I can make a few recommendations. Drop me a line and I'll give you the contact details of a couple of developers who can do it for you.

As I'm still in the planning stages, my 2 cents probably isn't worth much, but I am considering an LLC holding company. For me it just adds an extra layer of protection.

Thanks Tod R. and thanks for your input.

For me (and it maybe just that I'm relatively new to RE) Zillow doesn't give true comps. This was the reason for my question. The points that Steve Babiak made are exactly what bothers me about it. The comps are not really comps because it doesn't take account of a lot of really basic factors. For example, I was looking at a 3/3 house, the comps returned were minimal (nothing within 3 months) and some were geographically close but the house I was looking at was 1964, the comps were 2003 builds. Some were 2/1's???

There has to be a better option for the comps!

I agree with the other posts, it seems to be a pricing issue. Are you holding out for a particular price because you have to to give you a margin? I wouldn't wait another 2 months because it's clear that there is an issue that needs to be addressed for the house to sell.

Advice I'd give has been given above, get an appraisal to ensure your price is on the mark. If it's over priced it won't sell and you will have wasted 2-6 more months. I also think that the family connection. I have a rule that I never do business with family!

My guess is the price is wrong. Price is the trump card in RE right now because it is a buyers market. They have a lot of choice and a lot of houses below market value to opt for.

I agree.

We support a great charity in the UK, my 8 year old recently ran a race in Florida and raised just shy of $1000 for them.

I'm on the road to starting my RE investment business and when I do, part of my investment philosophy will be to give back. There are lots of things we can do to help.

I was talking to my wife yesterday (we were watching that secret millionaire show) and we had a great idea about adding a multi family to our portfolio and using to help people in need.

If REI's did something like that as a community we could really make a difference.