All Forum Posts by: Jesse Waters

If it makes you feel any better, I gave the bank 45 days to close rather than the normal 30.  Two days after our original closing date they called me to let me know that we weren't going to make it to closing on time.  WOW, REALLY!!!  Never would have guessed that.  Fast forward, another 45 days, and we finally get to closing.  Cause for the delay-Mostly because they didn't know what they were doing.  We were getting info from the loan officer, the underwriter, the processes and one of their supervisor's.  Ironically, none of them were talking to each other.

My take away, roll with it, don't argue with people with only half a brain, and I don't do business with that bank anymore.

A friend of mine and I keep trying to do a rehab/fix-n-flip in our local market. Unfortunately, every deal, so far, doesn't look good by the numbers. My partner for this venture is a contractor & I'd provide the funding out of cash or LOC, taking a 50/50 slip of the profits after the funding was re-payed.

In each deal we have looked at, we ask if the work required is worth the projected profit.  Unfortunately, to this point it hasn't been.  Our market doesn't seem to have the upside at the moment, even though it has plenty of properties in just about every price range and things seem to be selling at a decent pace.

For most of our projects to work out, we would have to be purchasing somewhere between 25-50% of the asking price.

I did a Guru's course a few years back, and while I learned a lot, I feel that I overpaid for the education.  At the time I hadn't heard of BP.  Hind sight being 20/20, I could have learned just as much, just as quickly here on BP.  Glad I got the education, but chapped about the price of it.  Oh well, live & learn I guess.

@Joseph Ikeguchi Welcome to BP. This is a great place to learn, discuss & grow your ideas. I would suggest getting educated. It sounds like you are on the right path with that, read books, blogs, video's & chat here on BP. Also, see if you can find a local REI to talk with. You will also want to figure out where you want to go, and to some extent how you want to get there. I am a fan of backwards planning. Once you figure out where you want to go & the how to get there you can develop your plan. Sounds like you have got the where (financial stability, income & a non-profit) and part of the how (real estate) learn, figure out what sounds good to you: fix-n-flip, wholesaling, REO, buy-n-hold single family, multi etc. You can develop your plan.

Best of luck.  I'm sure you will do well.

@J Campbell If you are buying off the MLS, then sure, why not. Especially if you are just starting out. A good agent/broker will assist in viewing homes, giving you a reality check, pointing out things that you might miss & bring their experience to the table in general. The agent I use also happens to be the broker in charge of her office, needless to say she is phenomenal when it comes to contracts & negotiating. My only caution is don't always believe what they tell you that you can get for rent on a single family property.

The point was mentioned that you can negotiate a better price by not using an agent, true, but to me REI is a team sport & if I started excluding my normal broker from deals word might get out, especially since I am in a smaller market. I have done deals where I did most of the work and my broker never actually saw the property, it was the 4-plex down the block from one of my other ones. I did most of the negotiations verbally & had my agent/broker draft up the contract. She also picks up on things that I miss in the finer details.

If I am buying something that is not on the MLS, I doubt that I would use an agent, in this case I would have to pay them out of pocket, rather than the seller paying them.

@Paul Tanso May business partner and I have been dealing with the same issue, how to partner with people & how to account for it.  My first source for seeking help was my accountant.  We are good friends apart from doing business and she said it was possible to add people as "partners" based on the equity they added, but it would be as a general partner in the business and not specific to one property or another.  She said we could try and keep track of their equity share limited to a particular property, but she told me our accounting bill would go through the roof.  I took that as a simple answer, of don't even think about trying it.

The best solution that I have heard of is taking "loans" from people as @Arlan Potter mentioned.  The broad stock market preforms at 8% average (so we are told & expected to believe.)  Currently you are lucky to get 0.25% in a savings account, and CD's are at 2% (maybe).  I think taking loans at 7-8% interest payments monthly, with the full principle either rolled over or paid back in 3-5 years is a great deal for folks, easier on your accountant & allows you to maintain control of your business & get the extra capital you need.

@Philip Adeleye Welcome to BP.

Personally I tend to avoid HOA's when ever possible. They then to be more trouble than benefit. It seems the more you have to pay them, the more rules you have and the more you have someone else minding your business for you.

The condo association may have either a suggested "soft" cap on the number of rentals they allow, or hard cap in the POA/HOA by-laws. I have run into a few that also put a cap on the rent's you could charge.

Another down side to Condo HOA's is that they seem not to be run the most effective way possible. If they need new siding, they hit you with a special assessment, if the building needs to be re-roofed, they hit you with a special assessment. Even though, they are supposed to plan for & budget these items in on a monthly basis, they rarely seem to.

Like I said, just my opinion, but I avoid HOA's.

Good Luck.

JW

@Brian Buckley Good question.  Having tenants that pay on time & don't cause problems is worth a lot more to me than just the rent collected.  I am guessing that you have a good rental market & could easily get new tenants if the ones you have moved out, just remember vacancies can be expensive.  So, I would give them some options, with 30-45 days notice.  Sign a year lease at a rate somewhere between what they are paying & full market rent, or go month to month at full market, either way get it on paper.  I highly recommend having each tenant sign a new lease with you, that way the contract obligations are expressly between you and the tenant, you want to avoid them doing the "well, our old landlord.... (did, said, allowed, let us, whatever).  

Hope that helps some.

Absolutely. The last property I was able to negotiate for a new roof, among other things.  I got cash at closing from the seller & turned around and had the new roof installed.  I bought another property that needed repairs (not replacement) negotiated that with the seller as well.

Not sure if its legal or not, but I actually want the kids there.  I feel that I can get a better gauge on the potential tenants by having their children present.  I also think that it makes it easier for people to look at the place.  If you don't allow them, where you draw the line?  I think it would discourage a lot of folks from looking, just seems to give off a bad vibe.