All Forum Posts by: Joe P.

Correct, you can use the deposit for a deep-cleaning, be sure to save any receipts as well so you can show your tenant when you only return a portion of it. Communication is everything with return of the deposit, so be clear, upfront, and direct.

What I like to do (especially with pets) is be upfront that carpet cleaning will most likely be a requirement upon move-out and will likely be taken out the deposit. I usually charge a non-refundable pet deposit for that, but check local laws. One township I invest in only allows a deposit to be 1.5x the rent, so I am capped at what I can charge. Its easier to set the expectation in the beginning on matters like that, and most pet owners understand.

Sorry, I will be a dissenting voice here. Don't.

If you have markets and properties near you (within an hour or two hours) that are acceptable for investing, I highly, strongly suggest you seek to invest there first. You can still do turnkey/outside management (assuming the numbers work) and you can learn on your own how to take care of a property. Having your own eyes on something for 12-18 months will give you experience to be able to manage others appropriately from far away.

I think the cash/HELOC purchase & rehab combination is relatively common, especially if you're working with a mortgage lender who has experience with other investors. Your underlying numbers are all important -- they're going to look for a good credit score, on-time payments, CASH RESERVES, etc., so I would get in front of a lender now to build a relationship, find out what numbers are important, and making sure your house is in order.

You will definitely pay a higher rate than what you're seeing because its an investment property and you may have a "good" profile instead of a "great" profile accordingly -- but as long as your house is as clean as possible...you should be fine. Show a lender you're worth the investment by taking action now.

Following -- from a renter standpoint I would think it's worth about $400 a year (two window units worth), although I have central air in South Philly and since we've been consistently over 90 degrees, its not working very well. We also use a window unit in our bedroom every summer, every night. So, whatever you decide to do -- make sure it is efficient enough to handle the key zones, which are all living and sleeping areas, or else its just something for them to complain about, and there isn't much you can do about it.

I think how much more rent you can charge is based on your current rents. If you're at the top of the market, I don't think it matters that you add it. But if you're around the median or lower, it might be a good investment. I don't think you'd get 10% more a month, but maybe $50 more? Sure.

Interesting...I always hear about FHA (not conventional) owner-occupied that refinances after a year to conventional. If you have a current FHA loan it would need to be refinanced to conventional, but that seems like a good option for low down payment, owner-occupied, investment properties.

Delco and Jersey. Rents are normalized to real estate values (lower rent than Philly, but way lower real estate costs and in nice neighborhoods). I've got a duplex in Gloucester City -- blue collar town, well-kept, right over the Walt Whitman. Watch for high taxes and flood zones which affect your cash flow.

Hmm -- I think you get what you give. When I started out the forums were huge for me. Sure, I probably asked a ton of stupid questions, but for me it was the best way to learn and start networking with people.

I'm only marginally improved from that point, but I have a few doors under my belt, still asking stupid questions, but also have some experience now that I could lend to others. And, I've met more people in the last 6-12 months than I have in 2 years before that because my knowledge, experience, and confidence is growing in this field.

So yes, maybe its more so for newbies, but I was (and still am in many ways) a newbie who seeks and finds value from the forums, as well as being able to provide some of my immediate lessons learned. One thing I tell almost every new investor, on virtually any forum topic they start or participate in, is to prepare your first property beyond the down payment and closing costs...to include 5k-10k in "backup funds" for any deferred maintenance or CAPEX you aren't acutely aware of. I wish someone would have told me that, or I had the foresight to ask. So as a (still) newbie, I find value in seeing other lessons learned and heeding the advice.

If you think about it, any specialized forum should work the same way. You probably have 1-5% of true expertise, maybe 5-15% "experienced" to some degree, then the remainder a mix of no experience/tire kickers. You were once a no expertise/tire kicker.

Hi Mark - welcome.

Just my $0.02 for what its worth...house will be listed for $420k and I assume you'll buy for 420k? And then comps are 410k-460k? What do you expect to do rehab wise and what do you expect to sell it for? Because based on that limited info, it seems like a dud. Not enough equity between purchase, rehab, and ARV to make it worth it.

Now, if you said buy for 300k, put in 75k, and sell for 460k, that might make it more worthwhile. Maybe I'm missing something in the numbers?

Truer words could not be spoken. The lack of educating our youth has already reared its head in our lives, and will continue to create a burden on our societal and economic systems.

Trying to keep focused on financial literacy, we didn't have classes or studies on any of those topics. If we did, they must not have been memorable enough for me to recall much of it. The only "money" classes I recall were my macro and microeconomics classes in college, and sadly, I spent more time goofing off as a 19 year old to care much about those. The material was dry and taught by robots.

We need to better introduce knowledge and practicality in the classroom and at home. My mother grew up in a home with 2 parents who survived the great depression, and then came to the US in 1959 and had to work (and save) every penny. Nothing went to waste, the concept of saving was heavily entrenched in our family, and that was passed onto my mother. I got my first credit card at 14 with a $500 limit and was told to put two things on it a month I'd normally pay cash for. This helped me to build my credit and learn that paying bills every month would help my credit.

But my real financial education came when I started paying my own bills like rent, mortgage, utilities, groceries...all on my own. It bothered me that I could physically see dollars coming and then physically see them going out just as fast. So my focus was always earn more, spend less, find ways to make more outside my W2. And here we are.

If I knew this when I was 15, I don't necessarily know if I would have taken action then on it, but at least the knowledge would have been instilled earlier. Sometimes maturity accompanies education...you can't have an efficient system without one supplying the other, in my opinion.

Hi Melanie -- thought I would drop in with my story. Bought a duplex in NJ in August 2018 -- it was very close to the 2% rule (103k purchase price/$1900 per month in rent), so I thought I did my due diligence and I was ready to go.

The one thing I would tell every new investor is to prepare for $5,000 to $10,000 of reserves being eaten up in year 1, especially if you plan on hitting the ground running. No matter how good it looks, likely from the point of the seller deciding they will sell, to putting it on market, to waiting for a deal and closing it, they are likely doing NOTHING to that property (and who knows how absentee they are prior to that).

So my rule of thumb is if you can't afford the DP and at least $5,000 in reserves before you purchase, you aren't ready. And prepare for those reserves to be eaten up pretty quickly, especially if you think you're getting a turnkey property. You are not.