All Forum Posts by: Jody Sperling

If you have 30% or so equity in your primary property, go out and find a bank—usually a local bank or credit union—that will offer a first position HELOC. This will cost you no more than $1,200; it functions like a refinance but closing costs are super cheap. Once you have the HELOC, move all of your "emergency funds" into it. The money is still available, but now it's parked in the HELOC, pushing the payment on your primary property lower, instantly improving your cash flow situation. People who use this strategy can "pay off" a house in 5 to 7 years in most cases (but of course you'll use the stored equity to acquire more doors, so the HELOC won't ever functionally get paid off).

Move all of your rent checks into the HELOC as well. The bank/credit union will give you access to 90% of the equity in the HELOC, so you'll already have a huge cash cushion compared to your previous situation.

Then, as you continue to build, you aim for 5k per property for a portfolio of fewer than ten properties, and 3k per property for a portfolio of greater than ten properties. Best of luck!

Facebook is your best friend in cases like that, and usually locally too. Search for St. Louis real estate investor groups on Facebook and join them. Create posts explaining the work, pictures boost your response if you can get them, detail your situation and a request for references/anyone looking to complete some work.

I almost exclusively use my local FB group, and it is exceptionally helpful. Best of luck to you!

What leapt out to me immediately was a non-real-estate-related solution. I don't know exactly what your income is as an engineer, but in your industry the wages tend to be very high. It's one of a handful of cases where perhaps you focus on building a portfolio of index funds. VTSAX is a favorite among the FI community, and it will produce impressive results for you. Average return adjusted for inflation is 7% per year, and the fund spins off dividends which you can reinvest in the immediate and eventually pull off as income.

If you simply love the shine of real estate, consider long-distance investing. Buy properties in the rust belt where growth is happening and property is still cheap but appreciating. You can find plenty of investor friendly real estate agents to help you and make the process more comfortable.

The issue with buying in California is pricing and government regulation. Since you aren't already established, you might as well avoid the headache. Best of luck whatever you choose to do!

To make the most out of a three-way partnership, you're going to want to focus on commercial real estate as soon as possible. You're also going to want to find private financing. Those two objectives suit an LLC very well.

With that in mind, begin to test the strength of the partnership by creating an LLC. You can hire a lawyer to do it and it will cost a couple grand, or use an online tutorial and tool to do it yourself for a couple hundred. Open a bank account for the LLC. Transfer the saved funds into the account.

While you are working on that, one of you should begin researching private and hard money lenders in your market. Put a list together and begin calling to ask questions on the process. The other one of you should begin searching to identify properties that you would like to acquire.

In order for the investing portion of your efforts to work, you need to pick up value-added type properties where you can buy cheaper and rehab to create more value. When you can do that, you can refinance out of the private and/or hard money loans into stable bank loans and begin renting your acquisition.

If this process goes smoothly, you have a functional partnership. Congrats!

There's so much left out of the above outline, but it should give you a sense of the flow and actionable steps to follow. And if you're curious, the LLC in this situation accomplishes to goals: it gives you a safe place to park money where no one can fight over it, and it enables you to accept loans from hard money lenders, many of whom will have a provision in their lending agreements that forces them to work exclusively with LLCs.

(One final word I'd strongly consider: push all profits the business makes back into the business until there are enough profits from the business to support each of you independently. It will go remarkably fast if you choose to do that. Otherwise, I suspect you'll find one of the three of you will ease off the gas too soon and stress the partnership.)

Best of luck!

Kilz oil-based or its equivalent paint is the way. Anything the animal pooped, peed, or sprayed on needs to be sealed in with an oil-based primer.

I speak from experience. Bought a house where the owner had smoked for a decade. He had two dogs that pooped and peed throughout the house. We tore out the carpet, the flooring and gutted the bathroom, painting every exposed surface with oil-based primer. 

Once the oil smell fades, there is no detectable odor. Hard work, but gets the job done when nothing else will. Best of luck!

I think the question beneath your question is, "What if every expense on my rental properties doesn't have a direct ROI?" And I'd say to that that there's more to life than money.

There's no way to know if the $5,000 will result in attracting a better quality tenant, but it certainly can't hurt. Best of luck!

Most people polygraph themselves on social media. Why not just run your standard background check after verifying the kind of person you're dealing with by reading through their social media profiles?

Listen to the BiggerPockets Real Estate Rookie podcast. Search on facebook for _______ Real Estate Meetup (fill in the blank with your hometown). Read through these forums.

The biggest thing is to act, though. There's no magic sauce. Use common sense and you'll be fine. I bought my first two properties at retail, with a real estate agent. I have four doors and I've been doing this for eighteen months. I still have no clue what I'm doing.

If you can afford to buy a house, buy a house. If you can handle renting bedrooms in the house you buy and living there too, rent bedrooms in the house you live in. You'll make money and the renter will pay your mortgage for you. If you have family and can't afford that, don't sweat it. Don't be greedy and you'll be fine. Best of luck!

Don't take the 12 months rent upfront. The prospective tenant is desperate and involved in something you don't want to be part of. No way of knowing what that something is, but there's no reason to find out.

You have a business, and your business has requirements. One of those requirements is 2x monthly income and another is credit score. If you were running a pizza shop and a prospective delivery driver applied who had his license revoked and a DUI, you wouldn't hire him just because he said he'd fallen on hard times.

This is no different. If you want to give back to the community, work with a local charity. Best of luck!

Nothing beats a high cash value whole life insurance policy from a mutual insurance company like Security Mutual for cash reserves. It does take a couple years to start pumping so it's not an overnight solution, but when the policy is going, it's impossible to beat.