All Forum Posts by: Jerry W.

I know where this laundromat is hehe, I actually talked to a few folks about it.  I am glad to see someone making it functional business.  Congratulations.

@Scott Cooper, I feel your pain.  The no and low money down approach often results in little or no cash flow in my area.  This is problematic as I don't have large amounts of cash to put down, I either use a line of credit that needs paid back or do a 2nd mortgage on a property with equity.  There are obvious problems with little or no cash flow, but I actually like that better than investing in a war zone.  I bought my nicest property that was losing a lot of money a month and finally got to making $75 per month on paper.  It is a beautiful fourplex with 4 attached garages.  The owners financed $40K for 5 years at 5% interest with interest only payments each month and a balloon at the end of 5 years.  I have to fight the tax assessor every year as they keep raising the value on it.  They raised the value up $90K this year, and it is not honestly worth that much.  

The good thing about nice neighborhoods are you can actually get appreciation, you can force value, and you have a lot less headaches that in war zones.  If you truly account for maintenance and cap ex and vacancy breaking even in my book is not preferred, but is Ok if you don't have many other choices.  I have actually bought properties that I knew would be slightly negative cash flow again, where the owner financed the down payment.  I consider the money I put in every month what I would have paid regardless for my down payment.  At the end of 5 years I paid off the down payment and it is now making me a little money.  The nicest houses or properties I own usually have the thinnest cash flow.  Oddly enough they have the highest appreciation of any of my properties.  Some of them I have had awhile and now am able to command higher rents than when they were purchased.  it is a dangerous balancing act.  Buy a lot of properties with little or no cash flow and you can lose your shirt.  One or 2 can sometimes make you money.  I also tend to use shorter loans, either 15 year or 20 year so that also affects cash flow.  Often I do my own maintenance in order to keep those properties  safely into the black instead of the red.

On another note you might look for distressed properties in the nicer areas and fix them up yourself in order to get the lower price that cash flows.  That is the method we used primarily when we started.  When you fist start out you sometimes take a little more risk.  I was careful to make sure I could make the mortgage payments from my paycheck when I started if things went south.now I could never come near making enough to pay my mortgage payments on the rentals, they are well over double my gross annual salary, but they take care of themselves.  Well kind of, I am replacing doors in a long term rental this weekend and drilling out the handles and putting hinges on them.

What ever you decide to do good luck.  Start slow and be careful and never give up.  if you look hard enough you will find an answer.  I could barely pond a nail when I started now I replace my own roofs.

Hey Everyone, I have done all kinds of door replacements.  I like using preframed doors and try to just save the trim around them to use again.  Awhile back I bought some doors and just removed the hinges and using a wood chisel put the old hinges on them at the same spot as the old doors and rehung them.  For the first time I am buying slab doors and have drilled out the knobs for them.  The kits are pretty handy.  Nothing came close to the what I needed so I had to mix a few colors of stain and again put the hinges from the old door on the new slab door.  What method do you use for replacing doors in your rentals?

If you use the slab doors and stain them do you put a clear coat over top of them when you are done?

I have used some unique methods of patching doors too.  In one house all the holes were about the same level to I cur out sone thin plywood and stained it and cut a fancy design in it and glued it over the holes in the same spot.  I have had great feedback from folks over it.  It is a house I bought and wanted to to get up and rented as soon as possible.

How do you fix or replace door?

Welcome to Por BP @AL-Teef Jones.  When you make the decision that you are going to do this to make money on a serious level you will start to see things differently.  Changing the way you think about real estate is a huge step.  Congratulations.

@Nick Proffer, there is a lot going on here.  A couple of things.  First there is a thing called fiduciary duty.  Just having a power of attorney doesn't mean it is OK to do anything you want with it.  You are obligated to use it in such a way that it is to the benefit of the person you are using it for.  Next you are mixing up a lot of legal concepts that are not usually compatible.  First a power of attorney in no way limits what you great grandmother can or cannot do.  She can revoke it at will and can still sign any papers she chooses.  Now a Conservancy is an entirely different animal.  To become the conservator of a person you must be appointed by a court, and you can over rule the decisions of the person you are appointed to for.  Your recourse there is to go to the court and file in the conservancy.  As to how you got your name on the mortgage but not on the title is utterly astounding.  You make it sound like you bought a race horse and went out and put a saddle on it and climbed on and were surprised that it turned out to be a cow.  At some point very early on it should have been REALLY apparent.  I am not even sure how to get on a mortgage without getting on the deed except for being a guarantor.  You mention a beneficiary deed.  I am not sure what that is.  It sounds like a deed that will gives you ownership in the future but not now.  How did you get that?  You really need to take a couple hundred dollars and all of your paperwork and start calling lawyers who do real estate and go visit one locally and get some help.  there also needs to be things in place to make sure you are not taking advantage of your great grandmother.  What may seem as just buying a house from her may look like taking advantage to another person.  There are thousands of attorneys in your state and many in your area.  Get on the internet or start making phone calls and make an appointment and go see one.  There is a lot more that needs to be known and read before this becomes clear.

@Julien Valentin, after reading the books etc. I would suggest your next step be start watching and learning the market you plan to invest in.  A lot of the first step is education, but you have to be able to tell a deal from as loser.  It costs nothing to surf the real estate listings and learn about what properties are selling for.

I have only bought 2 notes, and I have created 2 notes which I still hold.  None have been done this year.  Could you provide advice or a location to look for notes that are in the state of Wyoming?  I would prefer to invest in the state I do business in, but have not figured out how to find them.

@Hanna J., I know nothing about Illinois law and cannot comment on it, however there are several legal theories that I can think of that might be invoked.  One is unjust enrichment.  You received a benefit by getting money from the management company yet the tenant check to them bounced.  They are not required to give rent money when they receive none.  Had it been caught immediately you would have not been paid.  It was a clerical error would be the argument.  Next you can argue laches, or undue delay in bringing it to your attention.  Had they acted in a proper and timely manner the ability to collect from the tenant would be greatly enhanced.  By now the forwarding address for the tenant is expired, the information on the application for closest relatives and place of employment is probably outdated.  The amount of rent is really large, so it seems like the person must have had a really good paying job.  There careless delay has harmed you because the ability to collect is compromised.  The thing I would consider is talking to the management company and informing them you want their license information.  they had better be able to give you a VERY good reason why this was missed.  Their careless and gross mismanagement of the situation should never be done by a professional company that is licensed.  you expect them as the professional to be looking out for you, not trying to get you to pay for their mismanagement.  that may be enough to deter them.  Having your credit ruined could cause you damages you will have to pursue against them.

Anyway just my 2 cents.

I also have to give a shout out to @Marcia Maynard, she is so good at this.  I love hearing her comments on this stuff.

I might have an interesting perspective. I experimented and tried a VRBO rental in the fall of 2017 from a duplex I bought that needed a lot of work on one side. Now I am in the middle of Wyoming and the rental unit is in the middle of an old nice neighborhood. First the neighbors were mostly thrilled that I fixed it quite nice. The first winter was DEAD maybe rented 6 days from November to March. This was my second winter and so far it is the same, very dead in winter. Now we do have some tourism in the summer. I just looked at my books for the STR and grossed about $6K, so it almost exactly the same amount I would have grossed with a month to month renter. However my expenses are massively higher. I pay all of the utilities, I have cable TV, WiFi, and provide towels, soap, pots, pans, bedding, etc. I always have bottled water in the fridge and granola bars on the table with a personal note for each guest. I love meeting the people and visiting with them. The neighbors love them as well. The neighbor lady had her foot amputated and is in a wheelchair but seems to become friends with nearly every guest. I have had wonderful people without exception. Many have kids, some are tourists, many are fishermen interestingly enough. it is a lot of work, we change and wash bedding for every guest same with towels etc. We vacuume, wipe areas down disenfect counters and tables etc. I am debating about going back to a regular lease on it. but have the other side fixed up now for the same thing. I did lease it our for a month last winter to help a guy out, fully furnished, which helped a lot on income, but the wear and tear was a LOT higher. I have found all of my guests to be very considerate. I wish I had a higher demand, but on the other hand our rural community is probably the reason I get such great guests. Literally every one has been wonderful.

@Jay Hinrichs, that is how I closed my deal so fast, I have a secured line of credit on a house I paid off.  I go in get a certified check from the bank, walk across the street to the Title company, hand them the check, they close it.  Works well for smaller properties.  The bank will refinance 80% of the purchase price which I pay back on the line of credit.  The hard part is getting the money to pay down the line of credit for the 20% not covered by the new mortgage.  I have to sale a property or refinance a property with a lot of equity to reload it.