All Forum Posts by: Leland Barrow

You can do a HELOC on a primary most commonly through whoever holds the first. You will not be able to use IRA or 401K if you are under any amount of time constraints. You can contact a local bank and talk to them about a portfolio loan. I am assuming you would need to do this quickly so a HELOC on your primary would probably be the quickest solution. Your 2010 property may have enough equity to cash out refi to payback your HELOC? Personally I am not a fan of mixing personal and business assets or finances. You have enough assets that your liability is significant enough to attract attention if something goes wrong. If you leverage your personal property for business purposes I would recommend only doing it for a very short amount of time. Bad things tend to choose the worst times to happen. If I was in your shoes I would look for a cash heavy partner so you do not use up your cash reserves or just pass on the deal.

We do everything online. A link to the application process is on any of the marketing material that we do. They fill out the application and pay the fee and all we do is go in periodically and look at the applicants and their backgrounds. Our criteria is also stated on all of the marketing material. The service that we use for applying does the very first screening. When I look through the applications I go directly to the sweet spots and look for reasons to move on to the next applicant. It takes less than 3 seconds to dismiss an applicant because they usually didn't pay attention to what we communicated to them up front. If any applications get through the second quick screen then we call them to arrange a showing. At the showing a final screening is done. Do they communicate well, do their vehicles leak oil or are messy, do they enjoy talking to people, do they smell like cigarettes? After the showing we will google search them, scan their Facebook, and verify that they were honest in how they presented themselves. This when we usually find pictures of pit-bulls and other nonsense.

During the entire process the only real interaction is at the showing that we scheduled and then again at the lease signing. Don't waste your time with time vampires. If they didn't listen to your criteria then skip over their app. They wasted their time and money don't let them waste yours.

A risk that you didn't need to take. That could have turned sour and brought a ton of emotion into a business situation. 

A simple email would have been fine.

"The professional exterminator reported no bed bugs. This inspection is N/C. Any further inspections and extermination fees will be billed to you considering this report and the previous report prior to your move-in that documented the property as bed bug free."

You should always have an exterminator follow up their visit with an email or a report of their findings. This goes for any professionals that enter your property for inspections. Paying an exterminator extra for photos during the inspection makes a small claims court case almost iron proof. Photos that "inadvertently" show a messy and unkempt property have extra value.  

A judge would have slammed you in small claims court for your email. I was once told by a judge in Austin "it doesn't matter who is right or wrong, what is legal or illegal, it only matters that you can afford to pay and she ( the plaintiff) can't." You a landlord versus a poor little tenant in court. You are the underdog. Don't make it harder on yourself.

Yes, people are wary of email. They want to know if the property will fit their needs. Schedule your showings in a single day, make the requirements crystal clear, and screen any applications that you get. I think most potential tenants will see it as putting the cart before the horse and being unnecessarily intense. It is a mutual relationship and good tenants are screening you, and the property as much as you are screening them. 

It is a non-confrontational way to discourage trolling. Posts to vote ratio add credibility to those that post. By voting you have indicated that the person added value to the topic. It is a very simple way of identifying people that positively contribute. It is also a way to acknowledge other peoples contributions to a topic.

If you like your family do not rent to them. I have an associate that is currently evicting his in-laws. I am not going to get into the details but imagine the worst case scenario. In all honesty if you decide to rent to friends and family then you have chosen the wrong business to be in. Save yourself the time and heart ache and do not be involved in being a landlord. That is only meant as advice.

If you want to give kids or family a place to stay then let them stay for free. If you cannot afford to let them stay for free then you cannot afford to have them rent from you.

As you probably already discovered SA is a mixed bag and many (most) of the wholesalers are way off on their numbers. Their is a lot of garbage being promoted right now because inventory is low. A general rule of thumb if it is on craigslist or a website it is junk. I hate to be that broad but the good wholesalers have their buyers and those houses do not need to be marketed. If a house needs marketing to sell then it is most likely not a good deal. There is far more money chasing deals in this area then there are deals.

Direct marketing your own deals or establishing a relationship with a quality wholesaler is a far better approach. Just be cautious.

Mike S is correct. Buy and hold is a decent hedge strategy against inflation and dollar devaluation. If the dollar goes into turmoil then you want to be over leveraged. The loans become cheaper and inflation will drive prices up. As others have pointed out there is no replacement for the dollar. In comparison to the alternative it is far more stable. Even in a hyper-inflation scenario the rest of the world would get it far worse than the U.S.. As America goes financially so goes the rest of the world. China is facing a crisis with their population. They have allowed themselves to become upside down with the elderly to young ratio. If populations are increasing then you need more youth to cycle into the job market and produce. Natural resources are not declining. The law of conservation that we learn in elementary school addresses that. As a vague, broad and more of a science fiction reference we have the sun that is continually putting inputs into our system and entire planets that are within reach that dwarf the resources that we have. Populations also level out and even decline naturally. This has occurred in Europe and the reason that their economies are partially in transition. People are our greatest resource and a flat population increase is usually the first sign of issues for any country.

The world is always transitioning and it is always cycling through ups and downs. Choosing not to invest because of irrational fears is not a good idea. Imagine that you lived during the time of WW2. Can you imagine how many people thought that was the end of the world. The world was at war, economies were wrecked, and countries appeared to be on the verge of annihilation. After the war economies boomed and the world settled back into its normal patterns. Gold is a ridiculous investment unless you are diversifying and using it as a hedge. Anything that is pegged to fear rather rational or irrational, is unpredictable at best. Money is made when there is a large degree of predictability.

During the civil war a dozen eggs would cost a weeks wages. If you truly think that the dollar is going to collapse then be the guy selling the eggs. Gold is a pretense and a false promise. If the world does suffer some catastrophic financial event then Gold is not going to do anything but make you a target. History has shown us how much gold did for populations that were singled out for their wealth. That is enough of that nonsense. Do not be afraid to invest, just invest wisely and in things that have real value. 

Truth be told the VA does not enforce occupancy. That being said it is still considered mortgage fraud and you could be held accountable and made an example out of. That is probably highly unlikely to happen. The VA knows it is grey area and a thousand excuses or arguments can be used to justify non-occupancy. Not to mention that the same principle is fairly common with FHA requirements. There are a lot of investors that use low down payment FHA loans for REI. Please understand that I am not a lawyer, this is not legal advice, and I am not advocating or even suggesting to dismiss the occupancy requirements. If you purchase with the honest intent of occupying then I wouldn't stress if things come up and you cannot. The VA has better things to do then to try and arbitrate nonsense. If you flagrantly violate their rules then you deserve whatever comes your way.

The VA loan is a great way for veterans to purchase a home or help build their assets. I have used the VA loan and paid zero, absolutely zero out of pocket at closing. Being creative and negotiating can help you get a good deal. I currently own about a million dollars in real estate that was just purchased with VA loans, with 100% financing, and no money out of pocket. All legally and ethically purchased. There are not a lot of programs that allow you to do that.

The one thing to be careful about is renting out a VA purchased home that was purchased under false pretenses. Insurance will look for any reason to deny your claim. If you move renters in and you have never occupied then you will get burnt if you need to file an insurance claim. Committing fraud is cause for termination of an insurance policy. That may even lead to criminal charges.

Buy, occupy, rent, refinance, repeat. It is the VABORRR method and it requires nothing out of pocket if you do it right.

Considering most vets delay college to serve their neighbors I think it is a fair trade off. 

It all depends and I am not an expert. Turn key is usually closer to retail. You get a property that will probably cash flow, reduce your time involved, and minimize your risk. The tradeoff is you will pay for it. Subject to and flips depend on the deal. Personally I think there is a lot of hype about subject to. I would recommend educating yourself on that before going that direction. Insurance and federal regulations should be taken seriously. Flips on the other hand are essentially project management. If you buy right and do a proper analysis then you can mitigate your risks significantly. I cant speak on a national level but in Texas inventory is low and competition is tough. To find a good deal I would suggest doing your own marketing even if that means knocking on doors and driving for dollars. Direct marketing is the only way that I know of to regularly find good deals in this market. If you are just starting out then focus on getting to know people. Your network and your marketing is the best way to get good deals. I hope that helps.