All Forum Posts by: John Williams

I was able to access a business line of credit secured against an investment property to purchase other investment properties. 

Clarksville, TN - where cash flow meets appreciation! 

Drop your top tip for new/inexperienced landlords. What is something you wish you would have known when starting investing in long-term, buy-and-hold rentals? I'll start:

Rental property investing can be a great tool to build wealth! I'd suggest the need to budget for reserves. Have a bank account for vacancy, maintenance, turnover, and CAPEX. Fund the account initially and make monthly contributions to it from the rent that is collected (even in months where these expenses do not occur). If you have sufficient reserves, most problems associated with rental property investing can be mitigated!

Tell me 1 good thing and 1 bad thing about a property manager you've used... What makes a great property manager? What makes a bad one? 

Keep calling around, someone will do it! I've had luck getting a LOC on an investment property with a local credit union. Try all the local banks and credit unions. Speak to someone on the commercial/business side

You can probably get it done with a very simple contract. Most realtors are just used to using their standard, lengthy association forms. They are typically longer because they include additional clauses that are meant to protect the various parties involved. However, that does not mean that you can't use your contract. It would be smart, however, to run it by your preferred title company to make sure they can close on it. It would also be smart to run it by an attorney to ensure it constitutes a valid contract. 

The question you should ask is, where can you get the best ROI? If you have a very low interest rate on your other rental, it may not make sense to pay that off. For example, if your rate is only 4%, it may make sense to deploy your capital anywhere else you can achieve a better return than 4% - that could be via another rental, private lending, and even something like stocks - or something else!

I've executed the rent-by-the-room strategy around several military towns. For many reasons, this seems to work well for that niche!

The biggest challenge I face with creative financing is getting others to understand it. Whether you're dealing with a seller directly, or working through a realtor, most people are just not familiar with creative financing - and are therefore not open minded about the potential benefits of it (unfortunately people are scared of, and biased against, new/innovative things)

Just spit balling here...

-Move money to stocks - relatively cheap now

-Financing balloon (they either need a new loan or have to sell - and a new loan may not be practical)

-Upgrade - perhaps they've gained some equity recently and they want to redeploy that capital to a larger building and take advantage of the economies of scale