All Forum Posts by: Josh Nicolson

Crystal Smiths advice is spot on!

$15k margin is too small for this size (i.e. $15k on a mobile home is great but for $90k+ risk it's not enough).

The 90 days is based on the COE and not listing date.

Hi All, and thanks for the warm welcome.

Christina and Adam,

Currently my investments are in the Panama, Bonifay area.  Although, I'm looking to buy a group of investments somewhere else in florida soon.  Looking at Orlando or the Tampa/St Petersburg area.

For me it completely depends on how the building is built. If it's seperately metered I make the tenants pay. If it's master metered, I pay the utility. 

Even in Arizona I buy properties with master water meters and I foot the bill. However, I stay away from properties with master electric meters. If I do buy it, I spend the money to split the master electric meter into individual meters. 

Seperately metered utilities makes life more predictable. And when you split the meters, tenants are more responsible, and everyone involved saves money (tenant and landlord alike).

@James Register 

Hi James,

NOLO publishes do it yourself legal guides. They take the laws and simplify them so that it's easier to understand. 

http://www.nolo.com

@Richard Dunlop -  You make an insulting comment "common sense", then talk about derogatory comments in the next sentence (WOW).  This is a forum for people to learn from, not to insult people.  I just tried to explain to the OP's post, that you have to be comfortable with your first deal... or it will never happen.  For me, I went to look at 20-30 properties with my wife that made excellent cashflow.  She didn't/wouldn't buy any of those properties because she felt "unsafe", ie she just didn't have the vision.  So I settled on a property in a nice neighborhood with a park.  I ended up making $60k equity in the deal, so yeah, not a good cashflow deal but not terrible equity wise. 

I used cash flow whore (for one because I have a sense of humor) but just to emphasize the fact I went from an equity deal to doing cashflow deals.  But it would not have happened without that first deal.  We now have 35 units, all but the first one making very good cashflow.

@Joe Villeneuve - I couldn't agree more with the second part of your statement.  That's why I only did one equity purchase (happy wife, happy life).  And the first part, I would agree with pretty much any investor except me; I DID have to do that deal, or else we would still be looking for that dream property that made good cashflow and made the wife feel happ and "safe".  I don't mind the criticism.

There are different laws regarding daily, weekly, monthly and 1 year lease/rental agreements. 

I set up all my leases on either a monthly or yearly. I keep my worst rental properties on a monthly basis, soley on the idea that evictions are much more likely. 

To my knowledge there are no legal advantages to renting weekly as opposed to  monthl (someone correct me if I'm wrong). But there's too much work involved doing weekly payments than it's worth. 

Also, the lease is one year so you negate the ability to get easier evictions, yet you still deal with weekly rent checks. 

I have to agree with Mike wood on the repair estimates. 

In my opinion home fires "are like a box of chocolates; you never know what you're going to get" -Forest Gump

You can get in there and your contractor can find "new" problems and you will get a "new" price. 

I just think there is too much risk. Especially, if you don't have any construction background. 

i would get Everything in writing with the contracor BEFORE closing on the property.  I would also get a quote of repairs that aren't listed in originally agreement.  All contractors make their big bucks on "changes" to the contracts (change orders). Ie, if he says the beams don't need to be replaced, get a quote to replace the beams incase the inspector says they must be replaced Etc. Or the vents aren't in the contract get a quote on replacing the vents "just in case". Cover all the "contingencies" in your original agreement.

I don't believe the OP's post but I do worry about the recent introduction of the portfolio loans with 10 year balloons. 

There's a lot of medium sized SFR investors that jumped into these loans. I have no idea what the size of this group is. However, it B2R is owned by blackstone. If, for whatever reason (war, inflation rates, downturn) there is some type of significant restriction in the money supply when these 10 year balloons come. There may be another large housing "bust/opportunity". I plan to time my cash on hand to correspond with the 2024-27 timeframe and be well positioned for whatever he market will bare.

Hi skip,

Out of all the rules of thumb, I really like the 50% rule. It's not the be all end all but if you can follow it you should be in good shape. 

For my first investment I did not follow the rule. My wife is a very risk averse person. she did not want to buy in a low income "bad" neighborhood.  If my first one failed, my real estate career would be over before it started. 

So my first one I found a great deal on a fixer upper in a great neighborhood (relatively speaking for Tucson az).  We paid $90k cash and put in an additional $17k in repairs. We rented it for $895 which is a good $1-200 below market and it appraised for $150; and now worth closer to $160k.  

I rented it so cheap so that it would rent out quickly, and I could choose the best renter (I know about discrimination laws, I just took that risk on my first one).  I that if it stayed I rented for months my chances of quickly getting another one would be pushed back or diminished. 

My mortgage is $680 and rent is $895 which is terrible!  I would never do a deal like that again (in a cashflow whore).  But "at the time" it was what I needed/wanted to get into the game. 

Now, I only buy in low income neighborhoods that my wife would have never dreamed of investing in. I get 15-30% cap rates and my wife never complains about the solid cashflow coming in. You just have to get your feet wet with something you personally feel comfortable with. Use it as a stepping stone and the beginning of your "on the job training".

You can pm me your zip code and I'll check out some properties in your area and run numbers and I can run through scenario is for you and financing/rent options. 

Study the rent prices in your area via craigslist, Zillow etc. And bone up on your legal knowledge from landlord books for companies like NOLO Etc. 

Ask questions and jump when you feel it's "right"!

I've seen varying amounts. In Arizona someone wanted $3k earnest for an $80k property, in Virginia I did a $135k deal with $100 deposit, I've done $0.00 for a $215k deal in Florida. 

I would take the recommendations from the investors in your market. But I would caution from overtly high earnest deposits. Read the contract.  Make damn sure the deposit is NOT non-refundable. If that's the case, run, because even if there's a title defect; the courts have determined non-refundable means just that. No matter what happens you earnest deposit is gone. Buyer beware.