All Forum Posts by: Justin Ericsson

 Ok Richard I called Letts to ask them about your posts... It seems there are two sides to this equation. Unlike you I'm not going to slam you as a person on BP as the information I got about your portfolio explains a lot. I'm not friends with the owner of Letts ... I have met Preston in person no more than 5 times in my entire life. So Richard I suggest you try and be positive in life and take ownership of your own actions.

Matt,

If you are offering your tenant the option to purchase its customary for the tenant to pay a fee to buy the house for $x dollars in so many months or years to give them time to get qualified to buy the house. That fee is not refundable if they don't exercise their option to purchase the house. For this house I would recommend $5k upfront that you will credit back to them if they buy for $40k for example. They still pay rent each month but get the option to buy at this price no matter what happens in the market.

It sounds like you may be willing to finance the purchase long term which is tough to do. You have to transfer the deed to your tenant and create a mortgage and hope they pay the mortgage each month. If they don't you have to foreclose to take it back which is no picnic. I don't recommend this option as its high risk.

Tou,

I would recommend you look in chicago and buy high yield income properties gut rehabbed that produce north of 18% yield cash on cash with government guaranteed leased. $50k houses with market rate tenants in the long run don't pencil out well for cash flow purposes. My 2-flats for example generate $1k per month after all expenses and reserves putting down 25%. So $200k would buy 5 buildings or 10 units that makes $4k+ per month in positive cash flow gut rehabbed and 90% HUD guaranteed leases. The buildings come with one year rental and maintenance guarantees and are highly upgraded for rentals (granite, hardwood flooring, custom paint and tile etc). Something to think about as a comparison.

welcome!

welcome to BP! I think you made the right choice connecting on this platform. If you want to look at chicago in the future reach out to me I would be happy to show you the entire market. We have some pretty awesome investment opportunities here. 

Joel,

Chicago is a great place to live and invest for many reasons. The most notable the prices are affordable and income higher than just about every other city in country. For example I sell 4 bed single family homes in country club hills, illinois that generate $1,850 in rent with country voucher tenants for $145,000 turnkey. Yes the taxes are a little higher than Texas but the income is also much higher and I get the benefit of my rent wired to my bank account every month (meaning HUD pays the rent not the tenant). This area has a low crime index and very desirable as a rental. I would like to talk to you about the different sub markets when you have time. My number is posted below. Thx!

We do both ... Buy to lease and sell to investors turnkey and also fix and flip to home owners. Finding houses is not hard the trick is to buy with real equity and still get nice cash flow. 

one idea is to loan the dollars to other people you know fixing and flipping houses at hard money rates. You can easily charge 5 points and 18% annual interest for 6 month loan. That makes you $2,800 in profit in six months or $5,600 in one year. If you do this correctly for a few years you will more than double your money. There is more risk in this so you need good loan docs and trustworthy borrowers. Otherwise buying low cost rental is probably your best bet. Stay away from D market locations. I would go for C+ locations or B- if you can find one near you.

you can always find a good investment property in any market if you work hard at it. For example I know a guy that knocks on doors offering to buy houses in cash in million dollar neighborhoods and snags one a month this way with lots of equity built in. home owners can be lazy and sell for less thinking they can buy for less on the next house. Now that's hard work but he is rewarded for his efforts. A good local broker with pocket listings can be just as profitable. 

Buy low, rent high, sell high and leverage as much as possible (minimize your down payment). The more cash you preserve buying investment properties = more investment properties. The difference in cash flow buying one investment property with 40% down will never match the income generated with two properties putting 20% down on each. If you buy low on two properties you have twice as much equity and more monthly cash flow minus extra holding costs such as insurance and taxes.