All Forum Posts by: Michael Lauther

Cliff Earle you are probably correct in your assesment of the interest I have been offering to pay. Its most likely the reason I have no takers. It may make more sense to target SDIRA owners with an equity proposition which would make it more attractive.

Alan Chambers A property manager will not solve the problem of a tough area only make a living handling those problems for you. I am not clear on the rent you would expect from a Quad but if you apply the 50% and 2% guide or rule you would have an idea if the return might be good enough to take on the challenge of owning in an area like this. If you do not feel comfprtable visiting the area, I would not take this on as a first investment.

Shari Posey the answer to your question which is what I would pay and that may have more to do with my needs than what the market value may be. The quick answer is $110,000. In evaluation this property I would add management fees regardless of who was managing the property as well as vacancy and a fund for future repairs. (even newly renovated buildings will experience break downs and they will wear out eventually).
This number would give me a 15% return on investment after operating expenses that would eat up 50% of the rental income. My first offer would be closer to 90,000. If this were in a typical lower income working class neighborhood with tolerable crime statistics, vs. a more affluent area that this appears to be, I would probably lower my offer considerably. Needless to say many of my offers are not accepted but then again I don't have unlimited resources so the limited cash I have gets to work very hard for me.

Shari Posey The city would matter as well as where in the city. I would accept a lower cap rate for a property that had better appreciation potential and would look for a much higher cap rate if the prospects of above average appreciation were not there.

Cliff Earle I have thought about non recourse loans because I also buy and hold real estate in my Self Directed IRA. I believe the tax liability generated by borrowing would more than be offset by the ability to buy many more heavily discounted properties in many markets. These properties have cash flows that generate between 20 and 30% profit on rental income alone. I have been talking to other IRA owners with the intention of giving them a great interest rate secured by a mortgage on the property paying 6% for 20 years. I am looking to borrow 70% of appraised value. The interest I have generated so far is from those looking to take an equity interest and partner with me but I am unsure of how to structure that deal to make it worth my time and effort.

Anna Z. I know you asked Anesh and I look forward to his answer . I find it necessary to make several trips to a target market to meet people. I first find several properties that have potential and begin with the real estate agents representing the owner, usually a bank or a short sale. I make it a point to talk to and meet property managers and have walked the streets meeting the neighbors. I realize this is a very personal approach but unless I can find trustworthy people and maintain good contacts I cannot operate effectively from a distance.
Once I own a property I focus on that area and get to know the neighborhood.

Cliff Earle Contact me any time, My recent experience is exclusively in Dayton OH and I concentrate on zip code 45403. If you post your questions however you can get great insight form many members who invest in Ohio. I look forward to hearing from you.

Emma S. lending out your IRA as used in this context means to lend your funds usually secured by real estate and collect interest instead of holding an equity position in real estate. Holding a mortgage for instance.

LLC stands for limited liability company and it is a legal entity that can be used to own real estate and insulate ones self from individual liability. They can also be used inside a self directed IRA to gain Check book control of the funds to invest in real estate or tax liens etc.

Hope this helps understand the thread but feel free to contact me if you need help or further explanation.

Anna Z. Welcome to Bigger Pockets. I am a buy and hold landlord and live in NY but invest in Dayton OHIO. In order for me to have any sanity while managing these properties from 700 miles away I need to have reliable people in the community to look after my interests. It is critical to establish personal relationships with those managing things for you otherwise you will be at the mercy of contractors, property managers and real estate agents who may not have your best interest at heart.

I would suggest not investing out of state as a brand new investor but if you do perhaps finding a partner in the community you want to invest in or at least have contacts that you have established in or near the community.

Best of luck to you.

Thanks for the answer Andrea. did you use the bleach water mix on drywall or plaster? Did it eliminate any of the odor. What is TSP? I intended to use Kilz as well but was wondering if there is something better.