All Forum Posts by: Jonathan R.

@Ryan Delauz You can only raise it 5% per year. To get it up that high you have to finish the lease and start a new one with a new tenant all together. @John LaVecchia  I have never used an equity partner. I think it would be pretty simple. Something like, "Here are the days I get direct deposits, it is nice not to have to worry about getting the majority of my money on time. We are also providing an excellent home for someone in need and a tremendous amount of value to the community."

When reading posts from people discouraging you from going Section 8, make sure and get a feel for whether or not they have ever rented a property through Section 8. I have a Section 8 property, my numbers are very close to your desired target range, the venture has been lucrative and I am having a blast. My tenant only pays $46 and the government pays $629. I didn't see the need to run their credit, I received a deposit of $600, so if the tenant doesn't keep up, I won't renew to him. I do send him a bill every month saying the right things but I don't sweat it much. I did go with a disabled man in his 50s because I think he gave me a good shot at a long term tenant.

I'll be happy to answer any specific questions you have about Section 8. I did not go with a property manager, I just got a list from my local housing authority of what they need done to the property and showed the list to my contractor. You will likely fail your first inspection of two, don't worry about it and be nice to the inspector; I thought of it as a long term play, I want to do many deals with Section 8 so I will likely deal with the inspector many times over. Be calm when dealing with the bureaucratic red tape of the housing authority; make a phone call to figure out the next step when you are going through the process, when you get sent to voicemail, leave a message; when you don't hear a reply a day later, send an email; when you don't get a reply from your email two days later, drive to the Section 8 office and politely figure out what the next steps are. A lot of times you will be past from one person to the next and the last person won't tell you that you are now to be working with a new person.

I get a direct deposit into my bank account every month. I get above market rent.  It's a sweet deal. Just be cool and have fun with it, you'll love it once you do your first deal.

I'll lay a few nuggets out here even though I'm not sure you are ready for them yet. I'm not an overly religious guy, but one of my great grandfather's favorite proverbs went something like, "Babbling brooks are shallow but still water runs deep." I would suggest also reading a book on emotional intelligence so you can begin to manage your own emotions and the emotions of others. True emotional intelligence mastery is a beautiful thing; it is kind of like having the ability to mentally separate yourself from your body and look at yourself from a distance before deciding how to properly act. You can't change how others behave, but you can change how you react to their behavior.

With regards to real estate. I like that you are a fighter, you'll need that. I don't personally like your hands off approach with your first property as far as hiring a property manager right out of the gate and not really being open to fixing stuff. Get in and get dirty, learn and grow. You want problems, problems mean you have a tenant. "You've got to be bigger than your problems."- Secrets of the Millionaire Mind. I did some painting and light stuff, anywhere I could provide some sweat equity on my first deal I did. It is also easy to answer phone calls, why pay someone else to pick up a phone and call a repair guy, you can do that. When you have 13 properties, then you can begin looking for some relief. Oh, and I too started with a 10k loan from a credit union at 8.5%. I had 8k of my own money, used Lowes and Home Depot credit cards to purchase materials interest free for 18 months, and bought an all in investment property that rents for $675 a month. I literally bought a house for 18k, sure that might not be possible in your area, but at least you have an example of someone that thinks they can get rich off a 10k start up (I think I overpaid for the property, I see some on the market now in your range I would buy). Tax time, I'll cash out refi the property and move onto number two, maybe even number three too because the appraisal will be pretty nice off the dump house I bought in a C area. The nay sayers you have been trading jabs with throughout this thread think differently than you and I do. I'd find a way to kick some serious butt with 10k in real estate and never look back. I hope you read paragraph one, it was more important than paragraph two.

@Wade Sikkink When I was a realtor years ago, I sold a house to my younger cousin who used a great tactic and didn't tell me what he was doing. We looked for some time until he found the home he wanted. He offered well under ask but not completely out of range. I knew the other realtor would counter, and they did. The home had been on the market for a few months so it was obvious the seller probably wanted to move on. I told my cousin (the buyer) the counter and he thanked me. He never called me back that day and did not return my calls or texts about countering their counter. The other realtor called me later that evening and I told her the buyer had basically gone mia. I told her perhaps he really liked his offer. Mid afternoon the following day he called me and came up a couple grand. The seller immediately accepted and sent over the paperwork to wrap it up. So, sometimes you got to make the other party sweat it out. It is also good as the buyer to not tell your realtor what you are doing, brutal on the realtor, though they can sweat it out too-more drama that way.

@Benjamin E. I mention to check out the bar simply to make sure the bar looks stable and busy, plus I like a cold beer every now and again. Blanketing the type of tenant experience other landlords have had to your prospect is stereotyping. Just make sure he has money. If you are curious about how he keeps his home, perhaps pick up his rental application at his current residence and see what you see, check out his car. Good luck.

Look for vacant houses. If everything looks occupied for the most part, that is a good sign. If you see several for rent signs and for sale signs, that might not be a good sign.

I'd grab a beer on a Saturday night at their bar and see how busy they are.

Two more rentals purchased, rehabbed, and rented. I'd like a third if I am in the zone. I'd like to get more involved with my non profit causes in my area. I'd like my wife to be able to spend a little bit more money without me feeling I have to check the bank accounts so much. More sleep. 

@Jerryll Noorden Section 8 is lucrative. I love that my tenant is the government. You'll do great.

@Jerryll Noorden I would absolutely avoid offering tenants a $20 kickback to not "trash the place." You could be in violation of the program by doing that. In my opinion, it is in their best interest not to trash the place because they could be removed from the program. I know you can't rent to your family, or offer ownership incentive, so don't offer kickbacks. Now, what you can do is provide a quality property to a low income individual and fix problems as they present themselves; that would be doing a huge service to them and to society. You also might be able to get away with a once a year Christmas card that has a $25 (nominal amount) gift card to a decent restaurant to thank them for their business. Good luck.