All Forum Posts by: Jeff Kehl

I read 'profit by investing in real estate tax liens' by Larry loftis when I was learning how to do it.

http://www.amazon.com/Profit-Investing-Real-Estate-Liens/dp/1427795959/ref=sr_1_2?s=books&ie=UTF8&qid=1383914039&sr=1-2&keywords=tax+lien+investing

Be careful, there are a lot of hidden pitfalls.

The rules vary drastically by state so your best bet is to find someone who buys at your local tax sale to learn from.

I have a line of credit I use for buying and rehabbing. To get it I had to put up properties I owned free and clear as collateral. What you're wanting to do it sounds like is get 100% financing for a buy and hold, 80 % with a traditional mortgage and 20% unsecured on a credit line. Doesn't sound like a very good risk for the bank to take.

I was under the impression most standard residential mortgages prohibit you from borrowing the down payment.

If your using commercial funds it might work. I specifically asked one of my commercial lenders if they'd be ok with a seller holding a second for 20% when they loan me 80%. They said sure but I think this is partially because they know I would quickly invest money into rehabbing the property.

I own several properties in the same areas, some next to each other and I find it does help because a) I make sure they're well maintained and b) if other properties were to be neglected in those areas, I would look into purchasing them.

However these were already nice neighborhoods to start with. As others have said, one investor trying to change an area's image can be very difficult unless you have unlimited funds.

Early on in my real estate investing, I bought a bunch of properties in a town called Miller Beach, Indiana. It's nestled in the sand dunes with views of Lake Michigan and commutable to Chicago. The drawback of it is it's technically a neighborhood of Gary, Indiana with all of the crime and financial issues that go along with it.

After about 5 years of investing there, I decided it was unlikely things were going to change there and started selling. As I was doing that the county restructured and property taxes went way up killing most of my profit on the ones I hadn't sold yet.

So I would probably not try that again unless there were external forces I knew about that were already working to change the area.

My suggestion would be to get very familiar with the local government and chamber of commerce in the area and see what is going on. If new businesses/retail/colleges are expanding or moving into the area then I might be tempted.

Hi Derek,

Greetings and congratulations on starting out on your real estate investing path. I live and invest not far from you over in Rome.

You're starting at a good time. The market up here in NW Georgia is definitely picking up and there aren't nearly as many deals on foreclosures as the last couple years. But it's not heated up the same way Atlanta is and there are still good deals to be found.

Good luck and let me know if I can help you out with anything.

Are there prospective tenants in the area that would be ok with 2 brs? Is there a lot of 3 br competition? Is your target renter a college student with a roommate?

I always buy 3 br if possible because I'm going after young families and that's what they want. I have one 2br but it has 2 ba and an unfinished lower level I could finish cheaply into a 3rd bedroom.

If you're talking about apartments, different story, most expect 2 brs.

Think about your prospective tenant and if they're ok with 2 brs you should be as well. Otherwise, ask yourself why not do 3br.

Also on the gas thing, I was replacing hvac and hot water too so we just went back with all electric units to simplify things.

Hi Luke,

I just had the electric service split on a duplex so I can sort of tell you the process and roughly what it cost. But it all depends on the electrician and codes in your area so I'd call one or more and get some quotes.

Basically they have to split the service line coming from the street. You have to get the utility to cut it at the pole first. Then the electrician installs a 2nd meter base and wires it from the electric supply line. Watch codes aroun how high the meter is.

Then the electrician runs a main line from the meter base to where the new electrical panel will be. Note to put in the electric panel he's cutting holes in the wall so you have drywalll and paint work after.

After the new panel is in, he will locate and disconnect all of the circuits for that unit and rewire them to the new panel. When that's all done city or county checks the work and you'll need to fix any other issues. Once inspector passes it you call utility back. They will reenergize at the pole and set two meters.

This cost me $5k but I had bids as high as $12k. It included replacing some of the wiring in the unit not being split. I would not have done it except I needed to rewire a lot of it anyway due to copper thieves.

So you can see why people look for other answers. Gas I think would be similar except its an hvac guy and no panel.

I've bought several properties from Auction.com over the last few years. They were REOS and my agent always showed them to me first.

But around here at least it seems different now. They have deals with many of the counties around Atlanta and are conducting the 'courthouse steps' foreclosure auctions so I imagine it would be hard to see the inside because the people being foreclosed on are still living there.

I'm using Accuplan and have been happy with them so far. Set up as an llc with checkbook control. Only doing buy and hold real estate so far but may also do some tax liens or notes. I have a sfr a duplex and a triplex in it and it is returning 1-1.5% a month not counting any appreciation. Much better than I was doing in the stock market.

One other thing not mentioned is property manager web sites. The 4 largest in my town all have great websites with their current available inventory. I check all of those a few times a week. That gives me a very good idea of what things are renting for. If I can't find something comparable, my property manager will know.