All Forum Posts by: Jewel B.

So who did you choose and how did it go?

Quote from @Account Closed:

Quote from @Caitlin Stables:

Our current primary is going to be our first MTR and first investment property to be clear! It needs siding, 3 full bathrooms updated, some overhead lighting installs and upgrades, drywall repairs, some exterior upgrades like driveway and pathway gravel, foyer flooring redone and about 80% of the house needs interior paint. We have updates all windows, kitchen, roof, HVAC...My questions is should we do all upgrades before listing to get the most rent? Or what is the best way to determine which upgrades will net us the most income on a monthly basis. 

So, your question is "should you spend $50,000 to upgrade so you can make $200 a month more"? Let's see, $50,000 divided by $200 is 250 months divided by 12 months is 20.1 years to break even. Sure, makes sense to me. ;-)

 This isn't entirely accurate in practice unless there's little supply and a lot of demand. Although the value difference in terms of rent may only be $200/mo, there can be additional value in terms of occupancy rate. If the as is unit would be far less likely to rent than the upgraded unit, the value is ultimately a lot more than just $2400/yr. Not to mention it also adds value in terms of appraisal/equity and resale value.

Happy Sunday,

What are some warning signs that an HML company may be a scam / unprofessional / not reputable? What are some red flags?

I have a list of HMLs to contact for preapproval over the next few days, and they all seem professional at a glance, but knowledge is power so hit me with it.

Thanks in advance

This is helpful - thanks!

What are some other warning signs of scams or red flags when talking to HMLs?

Quote from @Mark Ito:

@Cory J Thornton thanks so much for the response. The thing is, we read rich dad poor dad together three years ago. That is what switched our mindset to investing. We did a deep dive and found BP and bought/read about a dozen books from the BP library. She is well versed in real estate investing and was on board until recently.

I have made my teams (agent, lender, property manager, gc, inspector) in two geographic areas already and was ready to put an offer in for a MF that was a serious deal. That's when she froze up and now I am feeling really torn.

If she was on board before, your finances are solid, and the deal is solid, just sounds like cold feet/nerves to me. Put some offers in and see what responses you get back. Once you have something accepted, present it to her during due diligence. You could even use a contingency such as "subject to business partner approval". Or not, and then worst case scenario you forfeit an EMD but maybe she would rather not waste the EMD and it will push her to move forward by having an accepted offer in hand.

Quote from @Mike Shemp:

@Theresa Harris - Thank you so much for taking the time to respond.  She is working on getting out as soon as possible.  Apparently this has been happening for so long to my SIL that he had led her to believe she was the crazy one, and that this kind of behavior is normal.  My wife stepped in last night and blew that all apart and gave my SIL the support she needed.  

My SIL took pictures of the wounds (cut on head, swollen eye, etc) and does have the medical bills.  I'll definitely suggest to her that she gather all this stuff up to make a case for a restraining order if he is not willing to leave on his own.  Thank you for the advice.  Truly appreciated.

Mike

 You should check if he has a prior record or criminal history.

Quote from @TaRa Mehta:

 I guess I'm concerned about those folks who think it's ok to use the backyard as the "potty", and not bother to pick up.

Don't forget the folks who somehow think it's okay to use the INTERIOR of the property as a "potty" and not clean up. Because that happens too. And that can be devastating, especially with the powerful ammonia of cat urine. Floors ruined, subfloors ruined, baseboards and moldings ruined, drywall ruined. Can happen with dogs or cats, from bathroom use or other destructive behavior. Especially if there's not enclosed yard and the owner just leaves the dog home alone bored and lonely and tearing the place apart, especially young or high energy breed or anxious personality.

The unit I live in was previously used as the litterbox for a single cat. It was horrific and completely remodeled afterwards. Urine, feces, vomit everywhere. Floors black with filth. Now I live here with 3 cats and when we move out, you'll struggle to tell anyone was ever here at all.

One thing I'm currently struggling with is the order of operations.

• 1. Browse the market (MLS, Craigslist, Facebook marketplace) for potential properties, keep an eye and ear out for off-market (network)
• 2. Pull aside any properties that seem to have potential / fit buy box (2-4 unit for FHA househack and motivated sellers/distressed properties to HML BRRRR)
• 3. Evaluate the comps for ARV and potential rents
• 4. Schedule showings with realtor
• 5. Have contractors walk the property and bid / estimate rehab costs / quote
• 6. Submit an offer based on the ARV*70%-rehab costs rule of thumb (which accounts for the equity that will be left in the property after refi)
• 7. Speak with HML and see what they need from me
• 8. Offer rejected, accepted, negotiated, or ignored
• 8a. If rejected or ignored with no other buyer, follow up every week / regularly
• 8b. If another offer is accepted, monitor listing until sold to see if it goes back on market
• 8c. If accepted or successfully negotiated, due diligence (with possible negotiations), then close (or back out based on contingencies / unwillingness to negotiate)

Rehab/Contractors: Bid first then offer or offer first (based on some metric, such as % ARV) w/ contingency (such as inspection or approval of business partner) then bid and negotiate?

HML: Should I speaking to the HML at a different point in the process? Before and after offering?

I would love to hear your thoughts!

Thanks

Is your wife a generally anxious or fearful or cautious person? Or is this specific to real estate? Or specific to finances / her financial upbringing? That might be something to address separately.

She should be willing to educate herself and put some faith in you even if it's not something she's personally passionate about. If she is willing, introduce her to some books (physical or ebooks or audiobooks), podcasts, or social media pages.

If she's not, you'll need to reflect upon the nature of your relationship and how you handle finances. Is it 100% shared? Do you have "us and me" money with your own separate funds as well as shared? If you have separate funds, then find a solid deal (doesn't need to be magical, just not bad/a loss), run the numbers, and make a move. Then she'll see proof of concept and that nothing that scary will happen.

Crazy story with the contractor and electrician!

Keep in mind new FANNIE/FREDDIE seasoning requirements are 12mos now, with select exceptions.