All Forum Posts by: James Park

Bryan.. Wow! your wealth formula is absolutely amazing! At this moment, my #1 is my internet retail business that i started in 2005. I wish to buy one SFR a year valued at less than $250,000 for the next 8-10 years from the cash generated from #1 and find good tenants to pay down the mortgage debt.

I have a couple of questions: It appears what you sayings it that flipping homes is more proactive income whereas rental is more passive income. What exactly does MFD stand for in your #3?

I am just not sure if flipping homes is my DNA. I've watched so many "Flip that House" episodes on HGTV and it completely stresses me out. Half the show you see the flipper yelling at his contractor why the work isn't getting finished on time. The flipper is over budget and losing profts as days go by. I'd like to ask a real professional flipper from Bigger pockets how much the show protrays the real life of a flipper.

Personally I rather make commission as a real estate agent for my proactive income and use rentals as my passive income while keeping my #1 - which provides with stable stream of income.. Bryan, thanks so much for your invaluable advice.

Sorry Jon and Jason...

Julio and Mark are both investing in the Dallas housing market. Let's say that Julio is starting with only $100,000 while Mark is starting with a $500,000. Mark is buying SFRs valued at $200,000 - $250,000 with 10% - 20% down and financing the balance. Let's also assume that the SFRs will double in value in the Dallas market in 10 years.

I am curious to know from the BP members at what level of leverage on your real estate investments do you feel that you can sleep at night peacefully?

One of the REI books I've read said that even if you have a mortage of a million dollar against your rental properties, if you have a million in cash, it is the same as owning your investment properties clear and free. This way you should be able to sleep at night as you know you can pay off the debt at anytime. Do some of you investors have a guideline that you use as to how much leverage you feel comfortable with? I am not sure if this is a good rule of thumb, but i try to make sure that my mortgage loans do not exceed the cash i have in hand. Is this being too conservative as an investor?

For those of you investing in rental SFRs, what type of rates are you getting from the banks for a 30 year fix with 25% down these days?

I've always wondered which investor would come out on top in the next 10 years of investing.

1. Let's say that Julio buys up $50,000 SFRs and flips them for a profit for $25,000 - $40,000 in the Dallas market. He does anywhere from 5-8 transactions a year.

2. Let's say Mark is a buy and hold SFR investor and buy one property a year and finances each one of them with 30 year fixed and rents them for 10 years. So Mark will be holding 10 SFR by end of year 10.

In this case, who would come out ahead? Have you met more people who are multi-millionaires by flipping homes or buying and holding several properties. I know both strategies have its pros and cons.

Greg and Steve,

Both of you advised me to evict them while the mother (tenant 1) is in Asia next month. Do you advise me to do you this even if the $800 comes in on the 3rd as she has promised? I gave her the benefit of the doubt when she put the $1800 in my account on the Oct 1st, 2011 like she said she would.

If the $800 does not come in by the 5th, I am ready to move full force on evicting them and will have a 5 day notice served on the 6th.

What risks to do you see if the mother does keep her promise and pay the Nov & Dec rent. Wouldn't it be best if we are able to amicably agree to a move out date without using the court process to forcibly move them out via eviction? I think the mother is trying to buy time after she gets back from Asia to find a place her family can move to. I am in communication with one prospective tenants who submitted an application. They have a credit score of 780 & 790 with $200k+ income. Unfortunately, they are looking at a Feb 1, 2012 move in date.

I have a question for the Chicago area landlords who have been through a eviction? Which eviction lawyer can you recommend who can move quickly on the eviction process and get me a court date within 20 days after the 5 day notice? How long does the eviction process usually take in the state of Illinois. Is there any advice you can give me as this would be my first eviction experience if i would to move forward with it.

I have the rental property under my peronal name and not in an LLC. I know that this is not ideal from a protection stand point. In this situation, what ways can i protect myself through my insurance company or other methods if my current tenants were to have a frivilous lawsuit case against me? I doubt this would happen but I want to keep all my bases covered.

Thanks

I just got a text from tenant#1 that $1000 was deposited into my account and $800 will be deposited on the 3rd. The $1000 just hit my account today so she is paying her partial rent payment 4 days early.

I had made an addendum contract that states that I will accept $1800/month, but contingent upon them allowing me to show my place. Tenants had agreed on the contract that if I find a new tenant they will vacate my property with 2 weeks notice. If the tenants continues to pay their rent of $1800 that i had agreed on in the addendum contract, do they have the right to stay?

I do want to avoid the eviction process to the best as so i do not need to bleed even more legal fees and lost rent. My ideal situation would be for the tenants to pay $1800 until end of the year and voluntarily leave on their own in Jan or Feb? Then i can fly to Chicago and clean, fix, and stage the home for sell or rent beginning of 2012.

What do you guys think i should do in this situation? I have the 5 day notice ready to serve if the $800 does not hit my account by the 5th of November.

Here is a email i just received from my tenant #1

James,

You will get 1,000 on the first and the 800 will be in your account on the 3rd. As far as December payment i will pay you the 1800 but I asked you before if i can do it when i get back from my trip from Singapore on the 3rd and you had agreed to it As long as i have it in your account before the 5th and its okay, i will be in chicago Dec 3rd arriving at Midway at 8.00 p.m and the banks are close by then so i can deposit it on Monday early morning. I am so sorry about all this, I hope you understand. For your information we will vacate your place if only we do not pay the rent and as far as November and December rent will be paid. I will talk to you after i arrived from Los Angeles. We will try our best to get out of here as long as i get a place for my family to live. Thank you for all your understanding and pls. try to be on our side, We have all the bad luck since we moved here...Thank you.

Best Regards,
Tenant#1

My tenant situation is getting worse. The mother (tenant1) called me yesterday with another sob story that the grandmother had sent all of your money to Asia for hospital bills. She asked if she can deposit $1000 to my account on Nov 1st and the grandmother will deposit the $800 on Nov 21st. I almost bought the sob story until i called the grandmother. She told me that she will give here daughter the first month payment on the 1st. The grandmother is not even on the lease. Her son who is tenant 2 has the 700 credit score and the mother tells me now that they don't care if i go through the eviction process or not.

I reduced the rent from $2175 to $1800 in sympathy that her son (tenant2) had lost her job. Now it seems like they are truly trying to take advantage of my generousity. It also appears that they are hindering any new prospective tenants to coming in voluntarily telling then the flood I had in July.

Tenant1 (the mother) is flying to Asia on Nov 2 - Dec 3. I asked her when the earliest date she can vacate my property and she told me Dec 3. If I don't get paid by the Nov 5th, I plan to serve the 5 day notice. I asked if she could move out in Nov and I will return her prorated security deposit and did not like this option as she will be Asia. She insisted that i take the $800 from the security deposit until her mother deposits this amount to my account the 21st of November which i refused to do since that is not what the her $2250 security deposit is for.

I would appreciate any advice from the experienced landlord. I got really pissed when the mother (tenant1) called me at 8pm on Friday while having dinner with my wife. Now it seems clear that everytime she calls me it another sob after another and I am buying it anymore. Emotionally this is becoming too much for me. What are my options here?

As a human being.. I would hate to see the police men throw their belonging out on the street. Is eviction the only option I have a this momoment. I rather pay two mortgages then face the stress these tenants have been giving me in the past 4 months. I could atleast fly to Chicago and clean out the unit so that it is presentable to the prospective tenants. I've had many people viewing the property but only one application so far.

Hi Daniel,
I have a California Broker license and I had no problems recipricating my broker license to the state of Georgia which is now my new residence.

California will not recipricate licenses from any other state, but i have seen most states recipricate licenses from other states. Georgia is one of them. I plan to keep my California broker license just in case I may invest or move there in the future.

Wow! thanks for the replies. Let me ask two questions:

Question #1: If you are a homeowner, what is the ratio of the percentage of your equity in your primary residence compared to your REI equity + primary home equity.

For example if you live in a $300,000 home that is paid off and your equity in your home ($300,000) + equity in your REI ($700,000) is $1,000,000. Your percentage is 30%. I am curious to know what ratio most people are at.

Question #2: I see that most of you have a real estate allocation between 30% - 70%. What percentage of your REI investments were purchased pre-bubble (before 2006) and after the crash (after 2006)? How has your REI strategy changed today compared to pre-2006?

I am talking just equity. For example if your networth is $100,000 and your equity in your primary home + REI is $30,000. Your Real Estate allocation is 30% out of your networth even though you have million dollar mortgage.