All Forum Posts by: Jim Stardust

Rob, the property is underwater so he's not likely to get further ahead with a lease purchase and it is my understanding that not many folks are going with lease purchases these days?

What's the house worth? How much underwater are you? How much did you put aside to get it ready for rent?

If you're still in the area, you don't need a property manager. You can handle most of the issues yourself and save yourself 10% or more. As for fixes, hire a house inspector, it'll be the best $300 you've ever spent, you don't want to bring in tenants and then have a major issue, it's probably unlikely for an 8-year house, but you can have that inspection ready just in case. The house should be in near tip-top shape for someone to fork $1500 to live in it, their expectations will be high so be prepared. Are you supplying all appliances, what about washer/dryer? If you're in a good school district, you're likely to attract families with kids, so think about kid (and probably pet if you're going to allow it) proofing your place.

Finally as far as flooring, think along the lines of what can hold up and be in good enough shape in case you decide to sell the house in few years. I went with hardwood in living, kitchen, and dining area and carpet in bedrooms, it was the wow factor for my tenants and I will be able to sand and refinish if I needed it in few years. The cost was not much more than Laminate and it just makes a huge difference against the competition. Carpets will be destroyed and will have to be replaced, avoid them when you can.

Good luck, this is great way to start into real-estate. Grab NOLO's Landlord Legal Guide, check out thelpa.com for advice and guidance, make a set criteria for the type of tenant you and stick to it, and you should be set to go.

Rich, what kind of protections can you put in a contract if someone is willing to take the money and run?

I think your portfolio should have a certain level of diversification depending on your age, your risk tolerance, your expectations, plans for the future, and whatever will make you sleep at night. RE investments are a good hedge against inflationary pressures so if you expect inflation to start creeping upward, you should be in a good shape. Other than that, you should have some equities, treasuries (look at TIPS), bonds, precious metals and other commodities (maybe through ETFs) and of course some cash that you can move around to take advantage of opportunities.

Having said all of that, I think we're in a state of stagnation and not many investments will work out that well, unless you're a trader and you can move in and out of positions quickly. My best bet is stay as liquid as possible and take advantage of real estate deals because they're likely to outperform any asset class if you have a 10-year horizon.

Just my two cents...

What about contractor that want to do a single job, like put in a flooring or install a countertop, I'm in the mix of hiring two installers and they're both asking 50% upfront, though one lives down the street from me. The other one needs the money to order carpet from a wholesaler, I doubt he'll want me to pay the wholesaler myself?

I believe many CC companies are curbing the amount that you can take in cash to yourself, it's usually around 20-40% of your credit line, so read the fine print. Otherwise, there's nothing wrong with shuffling money around this way, I would also contact the CC company that sent you the card and see if they are willing to wave the transaction fee or extend the 12 months to 24 months, they'll likely work with you if you have good credit scores.

Rob, what's the point of making obscure showing time, the 4:05 you refer to in one of your posts, is it to test people's punctuality?

Try this:

http://www.treasurer.ca.gov/ctcac/compliance/empverify.pdf

Also, if you need additional forms and anything related to landlording, check out the LPA.com and their excellent library of forms (http://www.thelpa.com/lpa/forms.html

Trust your manager, she really seems to know what she's doing. The Craigslist ad would tell you where you stand quickly, if you don't get much interest of feedback, you have room to lower the rent and still be within your initial target.

Just curious, where can you purchase property for $55,000 in good school districts? I'm wondering what the properties your friend bought in "rundown neighborhood" actually cost? What kind of renovations did you do?

My suggestion to you would be to start with a duplex, live in one and rent the other one, take advantage of your status as a first time home buyer to get good financing terms or deals through HUD/FHA. If you don't own a home, you must be renting now (or live with family) so this is a win-win solution for you personally and professionally.