All Forum Posts by: Justin Marshall

 As in payments to different lenders as well as possible points up front.

Get the property under contract for purchase price and back taxes and present to your bank with comps in area.  If they wont entertain that option you could always get private or hard money to cover the taxes to prevent an auction and then finance the property as is.  Keep in mind you will be making multiple payments doing it this way plus the hard money will be at a high interest rate.  Hope this helps

Welcome to BP!!!  Most any questions you have can and  will be answered here.  Make sure to utilize all the information on site.

Depending on what type of lending you plan on using will dictate if 30k is enough.  Other main piece to the puzzle is the location of which you wish to invest and type of investing.  If you are looking for a flip I would suggest finding someone to front the purchase price and you pay for the rehab.  If you are looking to start a buy and hold portfolio then your options are much greater as you can finding a lending institute that will be lower interest than any other source of money.  My passive portfolio is made up of 4 sfh and combined I would be hard pressed to have 20k in all of them.  Reasoning is I buy them in distressed condition and rehab them to a grade "B" unit.  I have a construction back ground so that saves tons on labor costs but finding a lender that will front all the funds is whats important.  All my lending is based off the arv which is determined prior to the purchase via the bank I use.  I use commercial funding which the terms aren't as long but I get to use the equity from each property to buy the next one.  The hardest part in my opinion is that first property whether its a flip or rental.  Get your feet wet and you will learn to swim.  Never limit yourself to one exit strategy either.

I use a Heloc on one property as my capital expense account.  The heloc I have in place is revolving so I'm only paying for the money when I use it. This way I have money sitting but its someone else's money so mine can be used to buy more properties.  If you do not have something like this set up keep a separate account for capX so that when something comes up you have the capital to fix anything major.  Rule of thumb is 3-5k per property depending on condition of said property.

I've tried to obtain the 2% rule within my portfolio but even with me doing all the rehabbing outside of the licensed areas the best numbers I've been able to reach are a 1.6%.  With this being said I'm still profiting 200+ per door on every property which is higher than what most people mention in any of the podcasts I've listened to.  Out of all my units I've only had 1 month of vacancy on one property in 2.5 years and I ask for top market rates.  A lot depends on your finishes and locations.  Don't let any rule of thumb dictate what you should and shouldn't buy.  In my location I find it hard pressed to drop below the 1% but again that's rule of thumb.  I could reach the 2% if I were to stretch out my financing but I don't do typical financing rather commercial lending which only allows me a max of 20 yr notes.  Hope this helps you.

If I'm understanding you correctly your PM is just putting the utilities into their names on the 2 properties as to eliminate hassle for you.  I'm also assuming that if/when you have a vacancy in either property that they are managing they are absorbing the cost.  I'd also assume that as soon as the units are rented they will be taking the utility payments out of the rents.  The other PM you are using might not be large enough to absorb those debts or just simply doesn't operate that way.  I'm from the Midwest and I've never heard any of the local PM companies putting utilities into their names for the reason that they are there to find and manage tenants but not to make sure your lights stay on. 

Thank you for the advice it goes along with what I’ve been pushing towards.

My 3/2's take a little longer to rent as well comparatively to my 2/1's.  I think its because of the price difference to be honest.  I'm getting 400/bedroom plus tenants are responsible for all utilities.  My 2/1's are averaging 1050/ month with utilities and my 3/2's are around 1400.   With that being said I know that's more than what I'd want to pay for a house to rent but I do rehab all my units with everything new down to the flooring in every unit prior to renting.  My 3/2s I usually have 1 month vacancy when a tenant leaves and my 2/1s I can have rented before they move out.  Best of luck to you.  Instead of offering to reduce the rent offer a partial month free.  People feel like they are getting more out of it.  50$/month adds up much faster than 300 off the first month ;)

Stick to your finance degree or a business management degree and find job that will allow you to invest with additional income.   Anything with either degree will give you a w2  job that's should be worth falling back on if ever needed.