All Forum Posts by: Account Closed

@Account Closed you asked a question about college grads. Obviously you are inexperienced in this area. I have experience renting to college kids.    And I gave you my experience and how I handle college kids. Take it or leave it .... 

Also fwiw source of income is a protected class. Ie you cant discriminate based on if she is a massage therapist or a physicist...
and thanks for the back handed compliment :)

you do know there is a real profession called massage therapist?  You are sounding very agist and sexist.....

Eta: they have lots of work opportunities because that kind of work is needed everywhere - so it would be easy to get a job - kind of like a hair dresser, accountant, etc

@Account Closed Can you provide more details on your acquisition strategy? It sounds like you are getting these properties in pre-foreclosure or non-performing notes.

>My opinion, backed by cash flow $$$ :-) is AZ beats CA anytime of the day

Case Shiller, that looks at the numbers not just their opinion, indicates otherwise for coastal Cal.  Case Shiller indicate top 3 returns for buy n hold for this century are all coastal Cal cities (San Fran, LA, San Diego). 

>$600 to $700 a month on $60k invested. It might match the midwest of even beat it.

At what LTV? Would you be so kind to post a pro forma that depicts this?

I dont know..... i know lots of massage therapists that have their own businesses, etc and not sure a physicist has the same ability to get a job no matter where they go ? Also a massage therapist has many many many opportunities to make money, where as a physicist has a smaller channel of opportunities     

What do you do when a seller doesnt want to sign your agreement and he wants to review it with an attorney?

How can I handle that objection?
THANKS

Will be closing on my first property this Friday. Would love to hear any regrets, mistakes, tips, or things you wish you knew after closing to help make me a little less nervous. Thanks!

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $175,000
Cash invested: $6,000

Buy & hold property in Tempe. 3/2

What made you interested in investing in this type of deal?

Cash flow. Over 20% ROI

How did you find this deal and how did you negotiate it?

MLS

How did you finance this deal?

Conventional

How did you add value to the deal?

New flooring, lighting, kitchen and bathrooms.

Would you post the pro forma for one $90k RE that depicts $250/month cash flow?

 Let’s go with you have realistic pro forma that performs as advertised (but if you do, they would be the first zero appreciation market realistic pro forma I have seen that depicts this amount of cash flow).

Now let’s play this out.  At the $90k price they have historically appreciated less than inflation.  So 10 years from now the 10 RE is likely to be worth less than $900k in inflation adjusted dollars.  What about the rent?   At $250 * 10 = $2500/month, which again historically is producing less cash flow in inflation adjusted dollars, but let’s use the $2500/month cash flow is $30k year.  

Now run the scenario using San Diego, LA, OC which in the last 10 years have experienced the following RE appreciation: 62%, 66%, 49%. Same $200k invested in coastal so cal on $900k property (Using same 80% LTV) if with similar inflation would produce $558k, $594k, and $441k respectively from the property appreciation alone.

How do you think the properties would compare in cash flow?   San Diego rent has appreciated 58% in the last 10 years.  Current San Diego ave 3 BR rent is $2923 which means the monthly increase over the next 10 years (assuming similar appreciation rate) is $1695/month.   $900k would purchase ~1.5 average priced homes.  The cash flow by year 10 from the San Diego 1.5 RE is likely to be greater than the $30k for the 10 units you referenced.  

A higher appreciation market will always eventually have better cash flow than a lower appreciating market.  It is in the math.  

All of our rentals currently meet the 1% rule (monthly rent is greater than 1% of purchase price). We have some LTR that are near 2% and an STR duplex that is over 4%. So we have great cash flow from our San Diego rentals.

I realize this projection is using past appreciation and not necessarily what will be achieved.  However it depicts that Appreciation and leverage can be great wealth builders.

I'm a super small fish renting out a 3 BR 1 BA 1000 sq/ft property in a nice but modest area in Milwaukee. I have been involved in REI for just a couple years and have not experienced many vacancies. I have had 100+ inquiries online and several completed applications. The requirements I have posted online are no vacancies for 7 years, > 600 credit rating, clean background check, and 3x rent gross income. I decided on these qualifications somewhat arbitrarily based on the advice of other investors/BP. I have had a number of candidates that have met every criteria with the exception of the credit rating, with some as high as 595. All of these credit reports and background checks have been done through zillow.

1) Why is the common expectation a 600 credit score?  Why is that the arbitrary line in the sand?

2) Am I at any risk for litigation if I accept a tenant with a credit rating under 600 now?  I've met several of these people personally, have income verification, and feel extremely comfortable allowing them to rent, but do my facebook and zillow ads put me at risk to allow them?

3) If I need to talk to an attorney, what type of attorney should I be looking for?