All Forum Posts by: Nathan Gesner

I've never used a subject-to though I understand it and keep the option in my pocket. I think the seller should have 100% ownership to do seller financing. I also think these Sellers are more negotiable on price because they've owned it for so long and have made so much off the investment that they don't care so much about getting top dollar.

@Lisa Daconta I don't think it's complicated enough to create a written flow. 

1. Learn the market

2. Find an agent to work with 

3. Find a lender and obtain financing

4. Find the deal

5. Buy the property

6. Manage the property or hand it off to a manager

Have you looked for a local real estate investor group? Just networking with like-minded people can open your eyes and help get over basic hurdles.

@Dave Ventura I agree it looks like an addition more than a renovation. It's a bad design because it creates a narrow hall-way back to the bedroom. If the bathroom were put at the back of the bedroom (bottom of your drawing) it would be much more functional. They probably did it because water was already on that side of the house.

 Donnie, instead of reading forum posts that are scattered all over the place, you should try to find a book that explains the basics of real estate investing like how it works, why it's better than other forms of investing, how to fund it, how to manage it, etc. A good book to start with would be The Unofficial Guide to Real Estate Investing

If you are leaning towards selling, I would start researching an agent and head that direction. I wouldn't bother with a property manager but I would definitely be careful since you aren't in the area to watch the home. Maybe  you can find a good agent that will do a drive-by inspection once a month for $100 or something while waiting to sell.

You don't need to "force" a termination because the lease will terminate unless you renew it or allow it to continue. Simply contact the tenant 90 days prior to termination and let them know - in writing - that you intend to sell and will not be renewing/extending their lease.

I saved up money and told my father-in-law (a REALTOR) I wanted to buy an investment property. He told me about a home that was on the market in my price range. He used to own it and got a good return from it. I bought it without looking at it, crunching numbers, or anything. It was a complete rookie purchase and I can tell you a dozen mistakes we made.

Long story short, I put $6,700 down and eight years later I sold it for over $70,000 in profit. Then there were the tax benefits, a few vacations paid for from the reserve fund, etc.

It looks pretty good to me based on the numbers. I'm not sure I'd get excited about it but your knowledge of the market and the situation may provide more insight.

If you are not experienced in renovating homes, I would probably pad your numbers a little, especially on a home that's sitting vacant. You can expect to run into some surprises and additional expenses.

If the home does not appraise for the negotiated purchase price, you can:

1. Negotiate a different price

2. Pay the difference

3. Walk away

There's nothing wrong with the "rules" although they are actually called "rules of thumb" which means they are a general guideline.

The 1% rule has to be tailored for your market. In some areas, you can use 2% or 1.5%. In my area, a good deal will usually be 0.8% or better.

However, that "rule" is just a way to quickly analyze a deal and see if it's worth investigating further. I can analyze 100 properties in 30 minutes using some general rule-of-thumb guides. I'll narrow those 100 properties down to maybe ten that are worth looking at and then I'll dig deeper and analyze them.

It's the first step in a funnel, narrowing down the options as a means of saving time.

It looks nice. It definitely looks like yours is priced well for that area. I notice the Zillow listing doesn't have a complete address and there's a notice at the bottom that the listing is incomplete. Maybe try filling in more detail or advertising on a different site?