All Forum Posts by: Jerry W.

Patrick L. But above all else unto thine own self be true and it shall follow as the night the day you cannot be untrue to any man. One of my favorite qoutes. You have to do whats right by your standards. I have given tenants chances and been burned, and I have given them chances and they paid in full and stayed for a long time. You cannot give charity to everyone and stay in business. I try to decide based upon how hard they are trying. If they truly are working and not spending their money on 60 inch TVs I sometimes give them slack. Sometimes I find small jobs for them rake leaves pick up trash, etc on a contract labor basis. (never as an employee by the hour, too much liability) If they are willing to work and do a good job I usually get paid, if they dont want to work I know I won't get paid and serve them notice. I am lucky to have the luxury of enough margin that I know I can make my mortgage payments. I only give the break for 1 month, after that the decision is obvious. I have ocassionally made an exception in deep winter months to have someone paying the gas bill so I dont have to worry about paying utilities myself. Oddly enough the gas company here will not shut the gas off in the middle of winter and the gas bills follow the tenant not the property owner. In Wyoming in really bad months gas bills can be allmost as much as the rent. To be fair I get burned more times than not.

Kris Castagna I have been in several investment groups. Some were good some were not. The best one I had was me and my wife and another guy and his wife. That one lasted nearly 15 years and only ended because the guy decided to retire. I dont care how smart they are or how talented they are if you cannot look them in the eyes and feel you can trust them with your checkbook they are not for you. I think its the quality of who you group with not the agreement. If things go bad the agreement is HUGE, but how things go is definitely the quality of who is in it. Do a few little deals before any big ones to see how it works.

Rian Chung I allways supply Stove and fridge. I never supply washer/dryer in my apartments, but I do in my SFRs, I allways tell them that they are not part of the rent and I will not replace them if they break down. If its a good tenant I allways replace them if its a crappy tenant, I plan to get rid of them. I primarily want no hassle good tenants, so I try to do the extra to keep the good ones. Happy tenants means less hassles for me. W/D are usually cheap at sears, if you watch for online sales you can usually get them for 30% off once a month or so, same with fridges and stoves.

Matthew Cariello, no. Lets say he fianced $28,000 at 4% for 30 years. He would pay $135 per month on his mortgage. That comes out of your profit side to tell you how much per door profit you make. This makes the yearly cost $1,620 for mortgage so your profit is $2880 per year. That is roughly 240$ per door per month. How many large apt complexes regularly turn that profit in your area? Especially after you take out fiancing? Also you are making more than $240 per month because principal is also being paid down. Its a fast method of determining if the numbers on a property look good enough to do a full work up to try to buy. You still need to do due dilligence, because repair costs, insurance rates, taxes, vacancy rates, etc can vary even within a few blocks of each other. By the way Ed Lee good job on explaining that.

Page Huyette I am just south of you in Wyoming. First never be afraid to make an offer based on your calculations, you are no worse off than if you never offered. I would not offer 235K$ on a duplex where I am because I couldn't get 1300$ a month rent even if I had a gun. I try to do the rent income calculations first to see what I should offer then look at the value. If you are going with owner financing here is a method I have used successfully two times so far. When you decide on your offer get a bank to loan you 80% you should get 4% or possibly lower, then offer the owner that he will take a 2nd mortgage for the 20% down at 2% for 5 years. I usually make interest only payments then pay the balloon off in 5 years by refinancing. Since I finance my rentals for 15 years not 30, they pay off 20% in the first 5 years. Sell points to Seller, you will get less than 1% interest if you buy a CD, I am offering more than double that, plus you get 80% of the money now. Its a win win for you, and I take over the headache of managing the rental. Anyway our market is tough here so I get creative. I would love to hear more about your market since its pretty close with lots more opportunities, wish MT didn't have personal income tax though.

First you need to determine what area you are going to work in. You cannot be effective trying to be everything at once. You probably will have trouble getting a loan to buy a house from a bank due to lack of credit. Think of things you can do. Do you have e nest egg for a down payment to buy? Can you get a job where you learn how to remodel flip houses? Do you have a relative who has a rental? Find an area and read up on it and decide wha steps you can do to begin your journey. You may not have much going on now but you are over 3 years ahead of me when I began investing. My first purchase was a mobile home so I was no longer paying rent. I did little fix ups, new window cranks, fix broken window, restain ugly kitchen cabinets, redo skirting. When I moved I sold it and actually made over $3,000, then I used that to put money down on land and another trailer again instead of paying someone else rent but this time no lot rent. When I moved next time after college I kept the trailer and land and rented it out (my tenants destroyed it, I was not a good landlord) but I made the payments with the tenants money, when I eventually sold that I was able to pay off the junky house I bought in a new town where my new job was. I am still fixing it up but its very nice now. Look a lot before you leap, but make the leap.

I have 1 million liability on each rental with a 1 million umbrella over that.

Welcome Jessica Vrabec. I think Joel Owens gave you some great advice. Find someone who wants to start doing flip houses or rehab and rent houses who either has money or lacks experience, or who has done it but does not have their own team to do the work. It could be beneficial to both. I am about to start my first flip and am very worried that I lack the detailed expertise to do it. Luckily the price I paid gives me room to make quite a few mistakes, and I very comfortable that I can allways turn it into a rental instead of resale. Unfortunately I live thousands of miles from you but I bet there are a lot of folks you could hook up with in your area. Good Luck!

Welcome Moses Magnum, you are in a good spot to begin Real Estate Investing. A lot of activity in your area and a very diversified area. Let us know how your first deal comes out.

ANISH TOLIA I am far from an expert but here is my limited understsanding of the flood issue based upon a similar property that I have a pending offer in on. The biggest problem from having a property in a flood plain is that it makes it very difficult for first time home buyers to get financing to buy it. My understanding is that there is rarely a flood in flood plains. I don't think it will impair your ability to rent, or sell to another investor. Obviously the price you will get from another investor will be a fair bit lower than that from a homebuyer. I recently put an offer in on a property to attempt my first flip house. After doing what I thought was due dilligence, I found out the property was in a flood zone, so my comps were off about about 20K on resale according a seperate realator I had do a market analysis. Just because of flood plain and the lack of first home buyers ability to qualify for low interst loans on them.