All Forum Posts by: Larry Turowski

Not a CPA, but of course—if they are expenses and not capital expenditures, which would need to be amortized. If nothing else you’ve got your utilities, taxes and insurance. 

Hi Nick, I buy houses and invest in Rochester and would be happy to help. Feel free to DM me. 

@Maria Andino do we live in the same neighborhood?  We don’t really, but my point is this type of thing isn’t that uncommon.

As everyone else has said, talk to him. Call directly if you can get his number. Or better yet, if you know where to find him, talk to him face to face. You want to try to get him in a conversation. I’ve left notes for people before but if he isn’t in enough pain to do anything about it yet, he probably won’t make the effort to call you.

Come right out and explain that you are interested in buying but move on before he has a chance to say no. “I live right next door and was wondering if you’ve ever thought about selling. How long have you owned the house? Oh you used to live there and then rented it out when you moved? How did that work out? you’re step daughter lived here for a while, right?  How did she like it?”

Build some rapport and then start asking questions about why he isn’t renting it out now. Eventually circle back to your situation, why you’d be interested in buying and how, if he is ever think about selling, it would benefit him: no realtors commission, no hassles, etc. and if they expressed interest and ask them what they would be looking to get to the property. If he asks you are, you can always say well. You hadn’t thought too much about it yet because he didn’t know if he was interested in selling. And ask if you can see the inside. 

Like everybody else, I didn’t read the whole things. But I agree with @Jeff Copeland. Inspectors point out every imaginable issue. They have to. Even a new house can have a laundry list of issues. 

Ultimately it comes down to price. I buy houses like this all the time—at a steep discount. The way you ask, “Would you buy this house?” makes me believe your discount isn’t steep enough. You want the price to be so good it’s a “Heck yeah!” And you don’t need to ask if we would buy it. 

@Tejas Shah Savannah Bank. It’s a small local bank. You may need to find something similar in your area. 

@Nathan Holt yes you can get what is called a blanket HELOC (or mortgage). I've done that several times. The advantage is slightly lower overall closing costs than doing them separately, and if they properties would separately not qualify for a loan due to a minimum amount required by the bank, combined they may.

@Tejas Shah how much equity do you have in these properties? Some banks will to helocs. My bank calls it a cloc, commercial line of credit, maybe because it is under an LLC. But the ones that will generally will only do it in first lien position. This means you'd need to pay off your mortgage with your HELOC as part of the closing. And this would only make sense if you've got enough equity to still have funds left over in your HELOC to do whatever it is you want to do next.

@Justin Dziedzic Congratulations!

Your insurance on the property itself should be fine. Umbrella gives you an extra layer of protection. Insurance companies do not want to pay out. We all know that. And they’ll fight tooth and nail before accepting any large settlement. Which means they are in your side. You’ll be fine.

Leases will be state specific. Sometimes even more local. Network around and see if any other landlords will share theirs.  Heck you can even ask tenants. DM me I’d be happy to share mine, but a local example would be better.  They aren’t copyrighted—at least I’ve never seen one copyrighted so you can copy them verbatim.  Also BP sells state specific lease agreements.

As for worry or stress, everything in life has that. Worrying about losing your job or keeping up job skills. Worrying about having enough for retirement. Worrying about the stock market. Worrying about missing out on coulda woulda shouldas. You’re not going to escape it by doing nothing and you’re not exactly rolling the dice here. You have a very limited downside. You’re likely going to make some money and more importantly learn a lot and so even better in the future because of that education.

Gotta agree with @Bob S.. The bar is really low for becoming a wholesaler. The  bar is only slightly higher for becoming a realtor and they can be every bit as bad and shady as wholesalers.

The truly good wholesalers and truly good real estate agents who work really hard—they’re great.  That said, like Bob, I haven’t bought a listed property in a long time.

@David B.a good way to frame it is would you buy this house for $450k with $145k down to cash flow $150/mo and get some appreciation over the years?

When you are trying to decide whether to keep a primary residence you should think of it as buying it from yourself. This is pretty much the same thing as investors considering their return on equity and whether it makes better sense to keep or sell.

There are other issues to consider too. If you can’t find a better investment vehicle (a deal or other investment) to put your money to work then you should just stick with what you got.

@Alazar Wubet I remember my first flip vividly. It was a fairly low risk deal in therms of investment, a mostly cosmetic flip about an hour from me.

I definitely lucked out in finding a contractor who was honest and did a nice job.

I bought the house in the winter but didn’t close until the beginning of spring. When I went out after closing, for sale signed had popped up everywhere!  Yikes!  It was in a depressed area and worse than I thought. I definitely started worrying. 

My biggest lessons were 1) rehabs take longer than planned. This has consistently held true. I plan for it now but even doubling the time to finish I get from my contractors is often still not enough. 2) leave some margin for unexpected repairs. I did, fortunately, and definitely did have a couple of unexpected items outside my scope of work. 3) visit often to check on progress.

I was fortunate and it turned out well even if it took 3 or 4 months longer than expected. I’ve had others, even just recently that haven’t turned out great or that I’ve even lost money on. Don’t put all your eggs in one basket. But do something. The experience is worth a lot. I’m at the point now where I can ballpark my rehab costs and make an offer in 10 minutes of looking at a property.