All Forum Posts by: Thomas S.

If your present lender is OK then you can start but may hit a wall financially in the future.

I would suggest you buy multi plex units to insure cash flow. If you do single family how many negative cash flow properties can you afford and how do you expect to continue to have your bankers support going forward. SFH are extremely difficult to cash flow and a vacancy can and does bankrupt many investors.

You also need to modify your lease for further protection. Insurance wise you need to include language to exclude certain dangerious breeds. Your insurance company will back you up on this.

For now your lease is not sufficient and depending on your state regulations a eviction my not hold up. Go on line and get a copy of your state landlord tenant regulations and see what it says about dogs and evictions in general.

Single family rarely have positive cash flow and are very high risk due to the fact that the loss of one tenant is 100% of your business. A multi is simply a single building with more than one tenant. requires exactly the same learning curve but is far safer to start. The larger the better but start with a minimum 3 plex for security. For finance and insurance purposes check your area to determine where they draw the line on commercial classification.   

Why do you think you are missing something. Getting into this business is extremely difficult, when done right, and is a whole lot more work than people think. 3 months is no time at all to be getting started and to be honest taking a year to find your first good deal is far better than taking 3 months to get a bad deal.

This is a game of endurance not a 100 yard dash. Hang in , be patient or you will jump and fall off the cliff.

Sean is right in advising not to trust the sellers numbers. He is most likely blowing smoke up your skirt and you are getting caught up in the excitement of your first quarry. A seller/appraiser/investor is the very last person in the world you can trust.

Do not start with a flip. They are highly risky (I have done numerous flips) and based on your personal skill sets not at all advisable. Your only option would be to be a money partner with a experienced flipper until you learn the ropes.

I would suggest you start with a good solid positive cash flow multi plex. Put 20% down and learn the business of being a landlord. Manage it yourself, do all your own repairs and once confident do it again or maybe consider partnering with a flipper at that point in time.

Fast is not part of the formula for growing wealth.

If you can  get out of the contract just do it and move on. Trying to solve this issue going in is something you factor into your purchase price otherwise you simply find a property that does meet the correct criteria.

Target properties that work don't compromise by trying to fix someone else's problem.

Based on the fact that you are new at this I can almost guarantee your estimates are way off. The addition is probably not permitted which means you will likely have to remove it, if not I would guess that it is more than likely not salvageable due to extensive water damage. The final ARV will probably be lower than everything you are being told and your final repair costs will be twice what you estimate.

Discouraging yes buy all too often the reality for inexperienced flippers.

My advice would be to first check the permits for the addition and hire a highly qualified contractor to view the home and give you a real estimate on condition and repairs. Worse case you get some education and move on. 

They do it because they are deluded into thinking that since renters are paying down the mortgage, even though the owner still has to pay in themselves, they are making money but primarily they are speculators playing the appreciation game.

Investors purchase with the expectation of a monthly positive return. Speculators buy without a positive return relying on historic appreciation records to support their gamble. 

Speculators have all sorts of reasons/excuses to justify negative cash flow but it doesn't change the fact that by definition they are still only speculators. 

Understood but the guy is clearly an idiot as asbestos poisoning is completely off the wall. As you were told poisoning takes a life time of exposure under normal circumstances. Text him back and tell him to stop licking the floor tiles.

If you don't want to play with him just tell him to rub salt and complete the eviction.

Now obviously some landlords will clench their butt cheeks and tell you to hire a lawyer, cover your butt be very, very afraid but honestly tenants do this sort of thing all the time and in your situation he has no case. It's just the boogey man.