All Forum Posts by: Joe Splitrock

As expected this post keeps trending. I think most people will agree the market will pull back at some point. The question is when will it happen and how much will it pull back? Although values go up over long periods of time, there are always pull backs. It will not be different this time, sorry.

I am a believer that if you are not heavily leveraged, you can weather any down turn. If you have high liquidity, you can profit significantly from a down turn. Just a caution to everyone is pulling equity out through refinancing - you are at highest risk. 

I was surprised @Chris Newman took a right turn with this discussion with the whole dooms day discussion. I will add surgical masks and latex gloves to the list, because realistically a pandemic is most likely to cause civilization to collapse. Maybe buy some bars of gold if you want an asset you can carry. I will stick to real estate myself.

I agree with @Account Closed to avoid two year leases. This is to protect you. If things are going great at the end of one year, you can have them sign another 1 year lease. Early on in my landlord days I had the idealistic belief that leases would be honored by tenants. I have had multiple tenants leave mid-lease. Best case in that situation you will get them to pay rent until you find a new tenant. 

My belief is that tenants stay because they are happy. Families are more stable because it is harder to move with kids. My guess is that applicant number 2 will buy a home eventually, assuming they are staying in the area long-term. I have lost several tenants to buying a home and they always leave on great terms. 

My perspective after re-renting so many times, I don't even care anymore. It is just part of the business. 

I think it is more driven by the down turn. Investors were able to get in cheap and they are continuing to purchase and running prices up. It happens with the stock market and commodities too. I just found the site two months ago but have been in the business ten years. I am not sure what that means.

Just needs some paint:)

Ha ha so true. This reminds me of a Craigslist post I just saw for someone who was looking for a house for their 3 kids and 5 pets. Dogs, cat and some other random animal I forgot. Oh yes and their target price was 25% under market value. 

@Sarah Ziehr there is a distance that registered offenders need to stay away from schools by law and they are discouraged from finding homes near schools. There are also drug free zones that make the penalties really steep if you get caught around schools. Owning property near an elementary school is ideal for me.

@Tyson Hill have you tried to track down the owner and talk to them? They may not know they placed an offender in their unit. I would say it is very likely that is why your tenant moved and the owner should know he is running the neighborhood down.

I just passed on a property that had a sex offender living across the street. My realtor told me, maybe it is not that bad, using a similar example. I looked it up and found he violated three teenage girls when he was 39. I passed on the property. I found another property that was very inexpensive and looked great. I ran the sex offender map and found a cluster of 4 living in the apartments across the street. I passed on that one too. I guarantee tenants will move out when a sex offender moves in next door. Women and families will not feel comfortable and will likely not care what type of offense it was. It is a risk for landlords.

Look at a sex offender map and clearly some landlords specialize in renting to registered sex offenders. I guess you could say they found their niche.

I agree with a strategy of avoiding low appreciation areas. Areas that appreciate are more desirable to live in, so even while you are holding the property, you will get better tenants and receive higher rents.

Realistically, many investors starting out that are buying properties for under $80,000 are generally not investing in high appreciation neighborhoods. The key with those types of property is cash flow and buying at the right price. 

@Account Closed perspective is different than the majority of investors because an island has limited land and one with perfect weather is going to be in limited supply. I don't think it is fair to make the blanket statement that since values went up dramatically in Hawaii, that you would expect the same everywhere.

You need to be careful when buying a triplex that is selling for under $100,000. If the cash flow is so great, then why is the owner selling it? The rents look good, but what is the vacancy rate? Are the tenants all current paying rents?

I was recently looking at fourplex and asked the owner about vacancy rate. He responded that the vacancy in my city is under 4%. I told him that is great, so are you saying your vacancy rate is under 4%? I got no response.

You could ask the owner for an income and expense statement for the last two years to show exactly how the property performed. You may get push back which means they are trying to hide something.

I like the approach of offering under asking price. No harm coming in low as a starting point. Don't worry if you miss this deal, there are plenty more.