All Forum Posts by: Jeremiah B.

For both materials and labor, on a 3/2 I would guess around 1600-1800. Maybe 1500 for labor only?

I have a local guy who I've only used once if you're interested. Struggled with the on-time thing a bit (which wasn't a big concern for the project), but did awesome work at a great price. Showed good ownership. Increased his scope quite a bit without increasing the cost.

A few things:

1. Today, the limit is 10 through fannie/freddie. It's true that 5-10 are more difficult than 1-4, but they are doable. In fact, I will close on #5 in 10 days.
2. If you're worried about the limit and are married, get mortgages in one of your names rather than both. This will increase your limit to 20.
3. Today, the options going beyond 10 are tricky, but doable. @Steve L. list was a good one, though I think you can include HELOCS to that (I'm not certain).

But most of all..

1. The rules will change in the future!!!! No one can tell you what conventional financing will look like in 5-10 years. fannie/freddie may increase the limit, remove the limit, lower the limit, they may go under, they may stay the only shop in town, or they may become irrelevant for investors like me. So, today, I'm trying to make progress towards our limit of 20 (10 for me, 10 for the wife). In 7 years when I hit that limit, I'll re-evaluate my options, but I promise you that I will be closer to financial freedom than I am today and that I will have viable options available.

First, you may be reading too much into it. Even if he doesn't have a side job in pastries, there are 101 other things that he could be doing. He could have come into money. He could be buying/selling storage units. He could be carving pumpkins for underprivileged kids. And - that pie baking thing ain't so far fetched.

But I digress.

Maybe I'm naive, but I prefer to believe that others are not drug deals until I have a pretty good reason to think that they are. Losing a job, having company and not showing that he is worried about rent does not meet that threshold for me.

With that said, if you want him out, I'm under the impression that you two can mutually break the lease at any time. Offering 'to let him out of the lease so that he can find something in his price range' is just fine, but probably will not work.

Hey Steffan,

Welcome aboard. And you really are in one of the best markets. In fact, I spent about 3 months reviewing most markets in the US with the intent of buying out-of-state SFR REI, and we settled on Charlotte! Fantastic city to invest in.

I'm no pro, but would love to talk shop with you if you're ever interested.

Can you specify what type of deferred income might be relevant? Appreciation?

Based on what you provided - this feels like a clear "no thanks."

With that said, your post left me with more questions then anything else. For example:

1- Why are you targeting a 2/1?

2- Why are you putting so much down?

3- Why are you trusting a realtor for rental amounts (props for second guessing him/her)?

4- What's up with the house? Age? Finishes? Neighborhood and target market?

Thanks to both Aaron and the experts that have posted. This was a helpful thread to read.

A few thoughts:

Do not bring your son to any business meeting, especially one that has any negative outcomes associated with it.

I completely agree with Joel - you probably need a PM. I would make the same mistakes as you, which is precisely why I have a PM.

This probably doesn't meet the criteria for duress, but with a bodyguard present, I wouldn't even talk business. I would apologize, and leave. Or, offer to buy them coffee and talk business at a Starbucks. But never talk business when you feel threatened.

In the scheme of things, this didn't work out bad for you.

Again, thanks for sharing.

Congrats!!!

I'm using a combined person who does the RE agent and PM side, and it's working great. But be sure you understand how much work he/she will do from purchase to rent, such as basic rehab. And what fee structure is there.

Ask about portfolio size and staff size. For a single person, I'd be cautious if he had fewer than 10 or more than 90 doors.

They all lie about vacancy rates, so ask "how many properties are vacant" and then follow-ups about how typical that is. Do a deep dive into these - view them online. How much traffic are they getting? Any leads? You should see activity, knowledge and foresight. This should give you a feel for vacancy rates, turn-around times, etc.

Understand the full fee structure. Including:

• Monthly management fee, and if you pay it while the property is vacant
• Leasing fee and whether that includes advertising fees
• Renewal fees
• Add-on for maintenance.
• Set-up fees.

Be very very very careful making any commitments!!! Options have value, and when you've signed something saying "you will be my PM for 6 months" you have fewer options. In fact, I would not sign any RE agreement until I have a place we are offering on (and then I limit the agreement to that one house) and will not sign a PM agreement until I've gone through most of the purchase.

And finally, be careful of the salesman. In my experience, the best PMs are task people and lack charisma.

Chris - congrats on your search! And props to you for adjusting your plan as you learn more!!! The only thing worse than acting without a plan, is acting with a plan set in stone.

With that said, I want to comment on the "wow" factor that you mentioned - because in my opinion - it's a kiss of death.

I will always remember the first time that I walked into my first house that I was going to live in. I had that wow feeling, and bought a wonderful home for me and my family. And overpaid by around $15k.

I will also remember walking the first good investment that I purchased. It was dirty, smelled bad, had holes in the wall, and the lawn hadn't been mowed in months. It looked like a mess. But, I was able to see it for what it could be, and look at it in terms of expenses and revenue. Because no one else wanted it, and because it was so trashed, we got a deal. And we got it around $30k below market! Not flip-worthy numbers, but great for a buy-and-hold, and was my first cash-flowing property.

My point is simply that fixed up places will give you a wow feeling. But they will also give the masses that same feeling, meaning they are almost certainly not a good investment. Instead, try and look past what you see and even what you feel, and get to the dollars and cents of the place. The less investing can be emotional, the happier you will be!

Happy investing!

She's sporting the mamamobile of all mamamobiles, a light blue 2011 CRV...