All Forum Posts by: Michael Olesky

@Mel Rosario, Cash is king because the seller is more confident in the deal closing.  A buyer getting a mortgage needs to qualify and stay qualified until closing, so as you can imagine things change, a job is lost or something and the deal is now dead a week before closing leaving the seller in a bad position if they've moved or bought another house.

If you have the cash, use it to at least purchase so you can get better deals and then refinance it back out after a few months. Another option would be to put down a huge EMD and remove your finance contigency, but make sure you are getting that loan or you'll loose the huge EMD!

@Meghan Helbick  It's a legitimate concern for me and I am looking at holding for 10yrs.  Even if demand doesn't diminish, the insurance costs will absolutely go up hurting profits.  People are still willing to live in New Orleans for some reason so I'm guessing people will be scuba golfing in FL at some point!  But New Orleans is good to watch, they'll be affected by a sea level rise before we are.

Study your Fema maps, especially where you are since there is a lot of low lying land around lakes and consider a shorter holding period if things develop the way we all hope they don't.  

I'd tell him to stick his hard sell tactics up his @$$ before I commit to doing it for him!!

@Daniel Cruz  - It's easy to look back and question every step you made but the way I rate my past performance is by asking if I did the best I could with what I had and what I knew at the time of the decision. 

I've found that no matter where my decisions led me, I could have done better and I could have done worse! 

If I were in your shoes, I'd probably let the dust settle on these purchases and make sure they are stable.  In the meantime, start researching markets, both the one you are currently in and other ones you are interested in and decide if you want to continue buying in your current market. 

Since you bought cash, you might look at getting a mortgage to pull 50% of your money back out if the monthly numbers will allow.  This money won't be taxed and you can use it for your next purchases.

Bottom line is you have a decent foundation so far, do what you need to do to shore up those investments and then keep building!

Best of luck Daniel!

Mike

Hey @Timothy Cervantes - sounds like a sticky situation, good on ya for helping your pop. I'm close with my parents also so I can relate to your eagerness to figure something out. I'm not clear on your LLC plan but if a new loan is involved your loan will be based on the appraised value not the price you are buying them for. Meaning you'll have to pay the difference (the 40k you estimate they're underwater) between appraisal and purchase out of your own pocket.

While I like your noble gesture of taking one for your dad, you might not be doing the best thing for him.  Consider this, you most likely will be setting your own financial progress back 10+ years taking on over leveraged property.  I'm guessing your dad would rather take the hit to his credit/finances in his twilight years instead of crippling his son's best working years and financial potential.  I don't know your situation, but two over leveraged properties on your balance sheet will most likely be a major road block in your future RE endeavors.

You might better serve him by purchasing your own investments that you can use cashflow from to support him while helping him get these investments in line until you can dump them.  In the meantime, you should get all the financials, minimize as much expense as possible and boost income as much as possible. 

Are the rents inline with market or can they be raised?  Shop the insurance policy around and see if you can get a better rate.  Could you put 2k into each unit and charge a bit more for rent over time?  Can the property taxes be contested? Do you have a large friend that looks like 'The Rock' to collect rent for you?  Every penny you can gain pulls you that much more out of the nosedive. 

Not really a solution to your situation but I wanted to share my thoughts on what I'd be thinking if I were in your shoes.  

Best of luck!

-Mike

Hi @Hunter Perkinson   - I'm interested to see what your project ends up being so don't forget to let us know when you decide.  I work in the GIS (geographic information systems) field and have been looking at doing some research of my area for my own knowledge.  

One great source for free data is the Census.  http://www.census.gov/data.html  and http://www.census.gov/geography.htm

@Lee L.   I'd be much happier to see posts/updates from friends about their RE or business exploits than the lame updates about what they bought at the grocery store or how hard work was!  

So what happens if the landlord's insurance doesn't allow dangerous breeds like german shepards, but the tenant wants a german shepard as an ESA.  Is the landlord forced to get a new insurance policy?  What if the landlord couldn't get a different policy that accepted a shepard?  Can the landlord tell the tenant to get a different breed?  

I think it's a welcomed change to balance out the quick turn real estate niche's that most posts are about.  This site is about all the different aspects of real estate investing and you guys not buying anything this year is probably a good example of how buy and hold investing goes in a recovering market. 

For me, I like it because it keeps me grounded when i see things selling for higher than i think they should and am tempted to bend my criteria.    

Ironically, if you write an article about not buying anything at all, it might be one of the most important articles on the site!

@Andrey Y. - my reason is simple and close to home for you. I owned a townhouse in crosspointe (just south of the stadium near the hi/h3 split) for 5 years and in that time frame the HOA fees went up $50 - $100 per month just about every year. When i bought the place, i was paying around 200/mnth hoa, by the time I sold it was nearing 500/mnth and expected to continue climbing.