All Forum Posts by: Laura Williams

@Account Closed it's unusual to buy a place that's already furnished unless it's a short term vacation rental  ...at least here in the States but anything can be negotiated if you wanted the furniture . It would be more of a negative than positive to long term tenants as they have their own furniture & might not like your taste. 

People buy places that are rental ready and other people buy places that need work. It depends on the price & deal you negotiate. You'll have to analyze the numbers and see what works to give you the most value & cashflow. 

As for a beginner I would recommend a place that didn't need a lot of work unless you are handy. Contractors tend to have a bad reputation for being shady & best to have your first deal go smooth so you don't get turned off to being a real estate investor. Your first deal should be small as you learn so much going through the process and are only going to be better on the next ones. 

@Bryan C.  in that I would NOT sell and just refinance the properties you have to a 30 year fixed if your looking to increase your cash flow. A 33K property isn't going to appreciate like the properties you have now plus you increase your risk of getting lesser tenants and more headaches in that cheaper price range. 

From my calculations if you were able to refinance your 410K loan into a 30 year fixed mortgage at 4.5% your monthly payment would go down to $2,077 a month. I'm guessing your mortgage payment currently is about 3400 (13 years on 410K?)? Which would give you a positive cash-flow of 1073 (almost same as the 3 cheaper properties) instead of a negative 250... plus mortgage equity pay off of $540 a month which you would loose on the cheaper houses. You can use this new cash flow then to purchase additional properties. 

It's just my opinion but I strongly believe if you were to sell these and then pay off in cash on 3 cheaper properties that you would really regret it in 10-15 years. Especially if you were to see the value of these double in this time frame. Plus if you refinance to a longer mortgage you're getting almost the same exact cash flow anyway and you have much better properties. 

I agree with @James Syed in that you get a higher return using a mortgage. But sometimes you can negotiate a much better price if you offer to pay cash and do a quick closing. 

@Derek Robertson @Phil B. @Steve Babiak @Larry Turowski @Steve B. @Leila Jones @Corey Beckwith @Tara Grogan 

Hey Everyone!! I just wanted to update this post and thank everyone for their suggestions. I took your advice and went with a light tan neutral color. Here's the after picture below. Thought you guys might be curious to see. Can't believe what a difference paint can make :) 

I also bought a place on Hubzu and I closed over email . The property was in Kansas City, MO and I live in NYC. I think the title company they used was in Atlanta. I didn't have to travel or pay anyones travel cost. I would think they would have to disclose an additional cost like that before you buy?? Seems strange

@Gayla Kemp 

I own my place and think buying your primary home is a great way to get your feet wet starting in real estate. You can take advantage of low interest rates, first time government homeowner programs, tax deductions, low down payment, etc. Then once you have the next downpayment saved move out and buy your next place. 

But it's not an easy question to answer whether to own or rent cause every situation is different. You have to really do the math and analyze which way makes sense. For example in NYC it's hard to find places to buy where you wouldn't loose money every month if you rented it out…..even after a large downpayment. Therefore you get more for your money to rent. But in other markets it's the opposite and in those markets I would say to buy.

I think most of those podcast that say to rent are aiming it at people who live in a coastal market like LA or NYC where the price to rent is out of whack. Also to not try to pay off your primary mortgage since it's cheap interest rate and you can then use that extra money to buy to your next deal. 

@George Wong I was terrified when I rented out my first place. I had watched that movie Pacific Heights once & it left an impression. I made the mistake of renting my first place to a friend because of that fear & thinking she would be safe.  It turned into a nightmare ...bad decision & NEVER again will rent to a friend!!  After I got her out of the apartment, I used a broker to find my next tenant & knock on wood I've not had any problems again in almost 10 years on my 2 NYC rentals. 

What's worked for me in my market is using a broker ...I find when someone uses a broker to find their place they are usually more serious & better people than I've found on my own plus they tend to stay longer. Also I read that it's best to not get too friendly with tenants & that it's a common newbie mistake. Your tenants need to have some kind of fear of you & what will happen if they don't pay their rent on time or mess up your place. Your landlord experience will be only as good as your tenant so also don't skip on any part of your tenant screening.

As far as anyone messing up your properties that's what deposits are for. You can always ask for more deposit if you feel you need it.  If you have a nice property in a good area the risk of a tenant messing up your place  is not high at all. I've never had a tenant do anything bad other than normal wear and tear. 

I think buying a home, living in it and then renting it out & buying the next one is a great way to get started. You can take advantage of low interest rate and start slowly.  I would encourage you to take that first step and get started investing. You can always post on here if you have any questions or problems as much as you need. 

I've google searched this quite a bit for my own purposes & it does appear that in the state of New York a co-op is considered real estate for the purpose of a 1031 exchange. So it can be exchanged in a 1031. Obviously I'm not a lawyer or professional so be sure to get a good expert to confirm this. 

I read on a BP forum that aimloan.com will do loans as low as 25K with good rates. I've never tried them to know their service or if they still have this minimum. 

@Nicholas Reece If your area has a lot of out of town investors then something like this might be helpful to them along with your local knowledge of neighborhoods and developments going up in the area, etc. Being an out of town investor myself I would pay to get a third person's opinion on values of properties I'm interested in to help me decide by someone who is not making a profit from me buying.