All Forum Posts by: Jeff Schemmel

 It's aggressive, but you could meet them in the middle and do an update or two and/or offer to get them on rental assistance to pay the new rent.  in my experience, low rents are usually indicative of the marketability of the unit as well, given long-term tenants are likely the case.  I'd try to find some kind of middle-ground.  Keeping good tenants long-term is the best thing, you want to start that relationship off well and not with a non-renewal if you can manage it.  Another person here recommended an estoppel agreement from each of the existing tenants and I think this is just so crucial.  All it takes is one deciding they want to dig in to ruin your deal.  I would not count on non-renewing all to make the deal for this reason and I can't stress enough to look into rental assistance to see what is offered and what it would take to get the units to a condition that would allow this to provide the rent you're looking for to the tenants should they qualify for rental assistance.

Hey @Gregory R Ley, afternoon!  I'm assuming since you came here for referrals that this is your first project, please correct me if that is not the case.  Would love to hear more about your deal and what it's going to take to make it good for you.

I have trusted contractors I can recommend, but I don't just hand them out to anyone randomly because it was a good deal of work to find and build relationships with contractors I know and trust and I'd like to keep it that way.  

That said, I'm happy to talk about the project and make some recommendations - please just DM me.  I highly recommend to any clients or new investors that they build these relationships from the beginning as their deal literally depends on it if there's an element of rehab to making it work.  

I also recommend you refer to the recent BP rookie podcast episode (2 parts) with James Daynard which talks about this exact topic in depth, including ways to find, vet, and build relationships with good contractors as well as some of the ways you can anticipate things going well and going poorly.  Anytime you incorporate some type of rehab into your deal you want to plan ahead for this.

good luck, reach out anytime!

Do you have the cash to buy the property at a foreclosure auction?  if not, I wouldn't seek one out.  House hacking a duplex is probably the ideal way to start unless you've got cash coming out your ears! :D

I'd keep house hacking, and I lean toward option 2 anyway because I don't believe rushing is all that advantageous here.

Hey @Deanna Zamora!  I highly recommend connecting with local lenders who are also investors themselves.  This is the best way for you to get this question answered.  BP is a great source, or you can network via meetups with other local investors who can share their trusted contacts as you build relationships.  I really think you want to get this answered specifically by a lender, however I will say there are a few basic ways.
1.) for first time and owner-occupants there are low-down options like the FHA loan, VA loan, 5% home possible loan (subject to area/timing/income)
2.) for investors buying their 2nd, 3rd home on a mortgage, you'll need at least 15% down, probably 20-25% using a regular fannie/freddie conventional.  I'm told you can get 10 mortgages in your name before you have to consider the later options here...
3.) beyond the first few you can look into portfolio lending with a lender who specializes in this
4.) there's always the private route, where you go to a hard money lender and just get cash to do a rehab/flip
5.) syndication deals are much larger in scale, scope, and more advanced but they're for people who are more hands-off to put their money in real estate and let another experienced active investor take the lead on a large commercial deal.

Hey @Hunter Reed my recommendation here is to connect with local realtors that specialize or have experience with investment properties; either on their own accord or helping other clients. I think this person can be a critical partner for you when learning to spot a deal, providing data, providing contacts, and helping source potential deals. They can help you skip all the bad sources and go straight to the MLS itself for your deal analysis. I do think it's important that you seek one out that's a good match for you and you do so with the intention of them helping you through your first deal and not just for the data. Hope this helps. A good realtor can really open the door for you to learn, network, and grow your business especially if they do it themselves.

Hey Ben, this is something a realtor can assist with.  I recommend meeting with a few local realtors that specialize in investment property and/or what you want to do in real estate with the intention of working with one on your first deal.  From there, once you've built a relationship with the one you think is a good match, they can help get you this data on past sales.  If you are poking around the whole country I don't see why Zillow wouldn't suffice - it's not perfect but it's enough.  

when it comes to raising property values, I wouldn't worry about being the first or last.  I would worry about making sure it makes sense to invest in a certain area.  learn a bit about what makes an appreciating neighborhood appreciate.  Businesses that provide strong long-term employment and increase the median income moving in, building luxury apartments where there previously were none, etc are a couple of good signs.  A place with a major hospital and/or universities and companies you would invest in are sure bets.  To some degree, it helps to be earlier than later, but I don't think that's worth worrying about when you're just trying to get in the game - just committing to the first property is the toughest part for most people.

This is definitely a question for an experienced CPA and a title agent.  who the profits go to will dramatically impact the tax consequences depending on the person's situation and you should examine that before making a determination.  I would connect with CPAs that have some experience with real estate investing and who are local that could answer this question and I would get 2 or 3 opinions before taking any action.  Hope this helps.  I'm not in NY state or I could refer one :)  You could also reach out to some title companies as well regarding the possibility of doing that with/without a quit claim - although I believe this is a common method.

Having watched many prior co-workers get paid, cash their check at the casino, and promptly deposit it all into a slot machine I can tell you with pretty good certainty that casinos don't have a positive effect on disposable income and good use of the existing income in the area surrounding :)

Are there solid local employers OTHER than the casino in a 15-minute drive?  Is there a hospital or a college around?  If it were me, I'd be looking for something in that location to offset the negative impact of the casino.  that OR consider buying a property you could short-term rent to people who literally just want to visit the casino if it's a large/decent one.  There will always be people who want to rent by one but I wouldn't count on one raising property values - I would in-fact assume the opposite.

@Bradley Lewis it sounds like, after reading your post, you're a little nervous about this process having never done it before.  Don't take this the wrong way, but from the perspective of someone who's done this a few times you're making it out to be a bigger deal than it is.  An example of what I mean is you won't talk to 100 applicants for 5 minutes each.  more than half won't even respond to a text let alone agree to a phone call :)

I recommend to keep it super simple.  Here's what I do...

1.) I list through apartments.com, which I also use to collect rent and manage tenancy/docs, etc as well as zillow.  I've learned to skip facebook & craigslist as the lead quality is exceptionally bad - this is where you'd waste a lot of your time.  sticking to these two will dramatically limit your inquiries, but should increase the average quality of them.
2.) I keep the application button turned OFF, until I can speak to an applicant and hear their story.  You can certainly use those pre-screening questionnaires, just make sure you're not asking questions that violate fair housing laws.  Here are some questions I ask:

-why are you moving?

-what's your ideal moving date?

-how long have you been working where you are? - try to ask feeler questions to see how happy with their job they are.

I'm going to pause for a minute and explain something I think is important.  You should self-manage this process, and you should be willing to do a lot of this screening up front and be less worried about automation - unless you have like a dozen units don't worry about it.  Eventually, you will want to hire a property manager and you need to intimately understand what it takes to get quality tenants to make sure they're doing that for you when you're paying for it later.  If you haven't done this and aren't experienced with it, how will you know whether you'd hired a quality PM?  

3.) if you speak to a potential tenant, and you think they could be a match you can have them apply and schedule a showing.  You can decide which order you want to do this in.  Most people want to see the place before they pay the application fee, and your pre-screening can help make sure they didn't just outright lie about their qualifications.  MN requires tenants to be allowed to see the unit before paying any money.

4.) once the background check and credit check are done check them thoroughly and call ALL the references.  I always ask for the 2nd prior landlord so I'm not calling the one they currently have.  that is super important.

5.) if everything checks out just let them know they're approved and have them sign the lease follow your state/local regs around that) and let them know how to send the security deposit and first month's rent and by what time.  Do not give them keys or access until the payment is settled and lease is signed.