All Forum Posts by: Stone Jin

@George Hariri The 1% rule is basically non existent in Phoenix.  Last year we got 6-8% appreciation.  You are trading cashflow for appreciation in this market.  

My advice would go on to zillow and turn on both the for sale and for rent and look at the which neighborhoods have the highest ratio of Monthly rent/sales price.  That's a start.  Then focus on the schools if all things are equal in the ratio.  Right now the rental market is super hot as people are living as far away as casa grande making the commute to Phoenix.  Basically every decent looking property will rent.  

@Shanae Swaby I believe the biggerpockets just had a guest on from Detroit doing what you are suggesting.  So clearly someone is doing it and is successful.  However, she is local to the area and knows the streets down to the block.  From your question it sounds like you may not be local if you are looking from Flint to Cleveland.  Return on paper is very different than returns in real life.  @Joe Villeneuve said it perfectly that cashflow can go both ways.  1 roof or 1 furnance needs to be replaced and that's like years of cashflow gone.  

I invest in Toledo, however I invest in the suburbs and in the best school districts.  However I can tell you that my contractor who also does some Property Management has been to eviction court a lot while he was rehabbing one of my houses for another landlord that mostly has property in the C/D neighborhoods.  

Lastly you are under capitalized, 15K will only allow you to be a slumlord as you have no budget to fix anything when it breaks.  You should look for ways to increase you cash, work a side gig or hustle some other way until you build up a little bit more in reserves.  Real estate investing is a long term play, don't set yourself up for failure right out of the gates.  Once you build a small portfolio of solid rentals, then maybe take a gamble at something more risky.

@John Gerwatosky You can try getting a commercial loan across the 4 properties.  I wouldn't say they are tougher to get but you probably don't want to go the conventional route.  If those 4 are in NWO, then PM me and I'll send you a couple of contacts that may be able to help.

I would agree that likely they don't want to waste their time with the loan due to the low price.  They have to do the same amount of work for an 80K loan as they would for an 800K loan.  

The out of state thing is an issue with some lenders in Toledo, about 1/2 the banks I've talked to do not want to lend to out of state investors.  There are a couple that are willing to have a conversation.  

Sounds like you want to buy the whole portfolio, why not just do that then.  They are more likely to talk to you if the whole portfolio is 200K +.  If downpayment is the issue have the owner finance a part of it.  

Is this your first purchase as a real estate investor?  Else you can get a line of credit off another property you own and use that to purchase.   However just be wary of units under 20K a door in Toledo, paper returns are always better than real returns.

@Max Pallatt.  I've never done seller financing because i've never looked for it.  However my understanding is that your name would be on title, and the seller would have a 1st position lien against your property.  I'm sure if you search biggerpockets there would be plenty of resources.

@Daniel Kramer  in that case you could have done a wrap.  Basically you pay her off some portion and then assume the mortgage.  I'm not 100% on the exact mechanics but generally you take over someones loan without changing the bank.

In regards to Sylvania or Perrysburg, as long as the monthly rent is about the cost of 6 month taxes, it is fine. Yes looking at a $4000 tax bill vs a $700 is daunting however you are also looking at $1500 in rents rather than $700. I would say 99% of what is on MLS would not be good investments, but you can find one here and there.

@Daniel Kramer in your case since you were going to buy from family, cash wasn't going to make much of a difference.  Were you going to low ball your aunt :).  

You probably should have approached her with seller financing, she gets a steady check every month and you get a rental property.  It would have saved you at least the lender fees and appraisal and probably a reduced down payment etc.  She then could have gone out in the market place and sold the note if she needed cash fast.

Lastly, there is no biggerpocket standard in describing a deal.  I'm closing on a property in Sylvania next week, I paid retail however I met my goals of 10% cash on cash and at least $400 cashflow so it works.  As long as the deal makes sense for you that is ALL that matters.  Biggerpockets is a little like Facebook where most people just post their best successes.  However, 99% of the people on here are not getting those crazy deals.

Anyways, good luck with your endeavors.

@Daniel Kramer congrats on your buy.

I wouldn’t sweat what you did. When it is all rehabbed just get a heloc on it and you have access to some of that equity. The real question is did you buy it right?

@Jason K. I self manage in Phoenix but maybe @Doug McVinua can help you.

I would second Ryan's comment.  I have two rentals for rent on zillow and I get about 10-20 inquiries per day per property.  If you can't rent it right, then it's likely you have some challenges on the PM side.  

Second if you think the home is worth 235K, why are you selling it for much less?