All Forum Posts by: Jim Cummings

Daniel. I would stick close to home for the first property, because you are going to Learn things and have experiences you don't currently envision. 

Having said that, recently attended a seminar where the Instructor (experienced Investor) suggested best places to invest might be small college towns. She was referring to places like Huntsville, Commerce, Nacogdoches, other central & east Texas towns that have smaller colleges that are not COMMUTER based Colleges. Haven't tried it - but sounds logical! 

Suggest you look at College Station, TX. SFH for $220K - $250K will do about $400-$450 POSITIVE. Multi-Family $300K - $350K. Around $800 - $1000 POSITIVE. Buy a Fabulous home for $400K.

Tony. Certainly not my area of expertise - suggest you isit with SA City Planning & Zoning and just ask questions. You'll gain some insight into what the City Might consider. 

Daniel. Welcome to the Forum. I've been a REALTOR for 27+ Years, a Property Manager & small time Investor (1-3 Units) for roughly 20 years. if you can find properties with creative or Owner financing, that is certainly something to Investigate. Getting and having SUCCESS with your first property is key.  I'm sure there are vast numbers of people that wanted to be RE Investors that "flamed" out on their first property and gave up, because of Tenant Issues, incorrect financing,being over-leveraged or any number of other horror situations people have gotten themselves into.   

You indicated you just bought your first home, and I presume working on accumulating capital to make your first investment. May I suggest a different strategy for your first property. Recognize there is a DIFFERENT caliber of folks that rent Homes as opposed to Multi-Family. I would recommend you stick with Single Family for your first investment - you are familiar with home ownership, maintenance requirements, etc. Multi-Family will bring you a vast assortment of different more perplexing issues. 

MY recommendation for acquiring your first Investment property: If you've been in your home less than a year - plan on staying 1-2 years. This will satisfy the document you signed at Closing, saying you planned to occupy the property. As this is your FIRST home - it's probably NOT your DREAM Home. After 1-2 years, BUY a new PERSONAL RESIDENCE, and keep your first home as your first Rental Property. You have the benefit of the low Interest rate as a homeowner.Buying a New Residence, you benefit from only having to make a small OWNER OCCUPANT Down Payment, plus the lower interest rate available to Owner Occupants.  Another "tweak" to this approach is look at the financial numbers on your current home and if it makes financial sense , refinance it to a 15-Year Note, and you can get it paid off quicker, which will increase your abilities to leverage your income for future purchases, (10-15 years downstream) or you can make additional Payments to accomplish much the same goal. Making One additional Payment Per year (13 as opposed to 12) will decrease your payoff time from 30 years to slightly over 22 years.

Good luck and happy hunting!

Senthil. I don't put a vast amount of faith in Tenants Credit Score. Basically, I have a 3-Question Test: 1. Do You make enough Money to pay the rent? This is answered by the amount they claim to make followed up by Verification Of Income, (Pay Stubs, Bank Deposits, Job Acceptance letter, whatever means available). 2. Will you Pay? and 3. Will You Pay ON TIME?.  Answers to Questions 2 & 3 are the Patterns (Late Pays, Collection Accounts, etc) you see on the Credit Report. 

Good Luck!

Rob. Maybe too late - but consider "ditching" the Brother-In-Law. Investing with family & Friends is wrought with horror Stories. JIM 

Senthil. If you are the Landlord - the criteria for additional Deposit is whatever you find acceptable. I would suggest you consider minimum 2 Months Deposit or MORE if Tenant has monies. From my experience as a Property Manager in Austin, if you asked for Increased Deposit - the bad tenants will GO AWAY. If you have someone sincerely trying to clean up their act and has funds they will not balk at the Increased Deposit. Had A Client once ask for 5 Months Deposit on a 2-year Lease, and got it it! The Agreement was if Tenants paid on time for first 6 months, Landlord would credit one of the additional Months Deposit for Month 7 of the rent, and after 12-Months of good rental History - Landlord would credit another months deposit for Month 13. If tenant's credit report shows a consistent pattern of late Payments to other creditors - you can expect they will attempt the same with you.  Good Screening is the an aid to good tenants - but certainly NOT FOOLPROOF! 

If you have to Evict, expect it to take about 60 days (court timing, delays, etc) - if Tenant doesn't contest. If Tenant Contests - it could take an indeterminate period of time.  Reality is once you receive the eviction approval from the Justice Of Peace - very few tenants will contest the Eviction further as tenant has to Post One Month rent as a Deposit to proceed, so you would receive the Additional Monies at end of the process. 

Bottomline: Better to Screen them out - than evict them later. 

Cesar

Welcome! The easiest way to get started in RE Investing - if you have a current home - is to go buy a new home and keep your current home as a rental. With the new home you'll enjoy the benefit of Owner Occupant Rates & Down Payment Requirements. Obviously, if you're living in your "Dream" home - you might have other considerations.

Lam. Sounds like a workable plan! I've learned over the years in Brokerage, Construction & rehab - there is always someone who will do it cheaper! Just getting licensed doesn't make you Competent. Experience and NON-FATAL mistakes you competent.

I would suggest you take the courses NOT through Online - but through a Brick & Mortar School. You'll get much more out of the interaction among students and instructors. You may also meet some Brokers that can assist you along the way.