All Forum Posts by: Larry K.

Consider a rehab then hold it. If you plan and manage the costs you should be able to have cash flow right away and equity built-in.

You can always sell down the line and you'll pay only capital gains, not be taxed as income.

Stay local. Don't chase cap rates.

Stay at this website and read a lot on here.

Keep browsing the forums.

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Attend your local REIA but beware, there are often local, smaller time gurus. I think some of the REIAs are set up for this purpose.

A true mentor I suppose is the best way to go about this if you can find one. I wish I had an "uncle" in this business. For me, my mentor has been a conglomeration of books, articles, and audio-shows by several experts, none of which were a mentor's high ticket price "Learning Course/Package"

So I get the following email from a tenant yesterday. This is a two family house. Also, smoking is prohibited per the lease

"Sorry to bother you but i meant to send this earlier today someone upstairs is smoking "pot" and i do not want my kids smelling it. Can you talk to the tenant so they can smoke somewhere else
Thank you"

How would you handle this? Have you ever had to handle this situation?

I just have them mail the check to my house. If I don't receive it by the 2nd I email them.

I am not thrilled with them writing my home address so often though. I sometimes consider setting up a UPS box to which they can mail the checks.

Learn the ratios of what makes a good deal. Lots of posts in here about that. Search terms like Cap rate, Cash on Cash Return, 50% rule, 2% rule, APOD. You may or may not have looked at your mothers house this way but assuming you have not you can take all the income and expenses, put it on a spreadsheet and start to analyze it. Basically you'll be making an operating statement. There are programs that do this for you but I think you'll learn more if you do it yourself on excel.

Best wishes and welcome!

Craigslist gets quite a bit of responses.

I really like the yard sign though since potential tenants have already accepted the location if they are calling you.

If you don't want to answer I understand but what percent of your former gross salary is the before tax cash flow of all the units. If it is not 100% then what are you doing to make up the difference (ie part time job that gives flexibility to pursue this more? consulting? belt-tightening? both?)

I am asking because it would be helpful to have some input as to "where you have to be" to make the leap

1. Keep your day job
2. Buy a 2 family in a transitional area you can afford without relying on tenant in other unit
3. Renovate while you are living there. Not having a short time frame will enable you be more choosy with your contractors. Many contractors like to throw prices at the wall to see what sticks. Don't let it stick to yours. Do as much yourself as possible.
4. Rent one unit while living in the other
5. Rent the other unit
6. Move into a short term place (parents, rental wiith friend) to stabilize everything
7. Buy another 2 family down the block and repeat the process again and again.
6. Potentially you could consolidate all the 2 families into a larger complex

You'll find yourself with a wave of money coming at you and equity sitting in all of these places. Good for you to be starting so young. You can do this. It is your choice of where you want to be when you are 35.

They have been good tenants so far and seem like gentle, nice people. To the extent that their life goes well, I think they will work out as good tenants.

I like that idea of categorizing it as marketing (or precluding the need to market!)

I am gonna give it. It will be $50 also. Thanks for all the advice.

As a general rule I strive to be a landlord who handles his responsibilities under the lease in a professional and prompt manner. Similarly the tenant has their responsibilities and I just want them handled professionally and promptly. I avoid being a "friend" but am "friendly" in my interactions if this makes sense.

Tenant just had a baby. Am considering giving a $50 Buy Buy Baby gift card.

This event comes up very rarely in a person's life so it it one of the few times I would consider (would not consider birthdays for example)