All Forum Posts by: Jon Klaus

"I would consider buying a house that would pay for itself. Is that a bad idea? Why?"

On it's own it doesn't sound like a bad idea. However, compare it to buying a property that not only pays for itself, but also pays you $5000 a year on top. Then it doesn't sound like the best idea. Find the best (or nearest best) opportunity you can.

How do you know you are getting the highest and best use of your money and attention? Do lots of research. Look at and evaluate 100 properties before you commit. Read all you can. Become an expert in your market. Ask the kinds of questions you are asking now. Get input from the "Mikes" of the world and listen hard to them, they've done this many times. You get the benefit from their knowledge, experience, and generousity. And read all you can at this site. The last month I've spent here has been invaluable.

Cash may not be shelter if the economy collapses, The dollar could collapse too, even in an deflationary environment.

Free and clear real estate is good. People will always need shelter and give you something of value for it.

The ability to grow your own food is a hedge. As in farm land.

And of course, get right with God.

" I target PRE FORCLOSURES and vacant and abandoned homes."

Douglas, where do you get your lists or how do you build them?

What are the characteristics of the ideal neighborhood for this type of campagn?

One goal for 2009 is to read 25 books on real estate investing, though I may throw a few marketing books into the mix.

I just finished reading How to Make Money in Commercial Real Estate for the Small Investor by Nicholas Masters.

Here is my Amazon review: http://www.amazon.com/review/product/0471752614/ref=cm_cr_dp_synop?%5Fencoding=UTF8&showViewpoints=0&sortBy=bySubmissionDateDescending#R2Z2Q1BGUQ0OZS

I am looking for more book recommendtaions, perhaps something that covers subject 2 well, and very recent books dealing with today's market.

"Monthly rent comes out to 2.8% of purchase price."

This would make it a deal in my area, especially for a duplex. I would stay out of a war zone, though.

The reason for staying in one complex is that I think I can get more for the package at resale time. Like an apartment complex with in a complex.

Yes, I would be active and seek to join the board and work towards appreciation.

Tactics: I would mail a letter to the owner of record asking if they would enertain a cash offer for the home. Most are investor owned. I would follow up with a series of 4-6 postcard mailings over the next 3 months.

Other marketing ideas for buying? Contact property manager for leads? Spiff them? No bandit signs allowed in the complex.

Both? Mail letter and call the day after they should receive the letter.

I am looking into the pros and cons of buying a number of units in a complex of about 200 units. I would only buy units if I could get them for <$30K, and average rent would be @$700/mo each. There is a HOA fee of about $200/mo that includes all exterior maintenance, garbage P/U, water, and property insurance. They should cash flow fine. My questions are about buying into a complex that has a HOA and fees. Drawbacks other than the cost? Advantages? This seems like a scalable way to get into an “apartment complex†with a decent CAP rate. If things went well, I'd like to buy 25 of them over the next couple of years.

I’d pay cash as I went and then ideally do cash out mortgages in groups of 2-4 units. Maybe finance 70-80% LTV. Any issues with doing this type of financing? Other considerations?

What a great tool! Thanks Michael and Joshua.