All Forum Posts by: Paul Hoeppner

I'm currently looking at purchasing a SFH which is currently RIGHT NEXT to a public elementary school in a great neighborhood. However, the school district is making some changes, and combining 2 schools into one. This particular school is finishing after this school year, and a developer has already purchased the school. The plan is for them to turn this school into loft apartments. I'm assuming they will be really nice lofts.

Do you think this will have a negative or positive effect on this property value long term? The SFH that I'm looking at is right next to the school, within 30-40 feet.

Just went through this exact scenario with a property.  We gutted the place, which we knew we were going to have to do prior to the purchase.

Something to keep in mind, once you start opening walls and removing floors, in certain cities an inspector might "coincidentally" drop by.  In a lot of areas, anytime you open up the walls, the city is going to make you bring all electrical up to code and have the plumbing inspected.  Just something else to take into consideration.

I've had instances with auction.com specifically where I'll stop at a number, get outbid, then get a call from the website asking if I'm still interested in the house at the last price I bid.  At this point, you can even knock off a couple more thousand (depending on the bid increment).

Your best bet is to call around.  Ask mortgage specialists and try local banks, for instance Silver State Credit Unions (in your area).

Get creative.  Maybe borrow the remaining down payment with a personal loan, car title loan (a real one, at a bank for 5-9% interest), CC balance transfer check at 0% for 18 months (assuming you have a plan to pay it back), etc.

If you wanted to make the house your personal residence, you could put down 5% and pay PMI for a year. After that, you could refinance the property with no money down since you'd have so much equity.

If you're finding a deal that instantly generates 60-100K of equity, that's just insane.  Some of the ideas I'm suggesting might not be the most cost efficient and I wouldn't recommend for a lot of scenarios, but missing out on a deal with that amount of instant equity would be terrible.

Maybe get a partner.  I live in Las Vegas.  If you show me deals that good, I'll come up with the remaining cash.  There's probably another 25 Las Vegas based investors on here alone that have cash if you can bring them deals like that.

Lastly, please spell check and/or proof read when asking for advice / help.  Haha!  Sorry, I had to say it.

Right. My main point though, is that even if you want to do the work yourself, that doesn't mean the city will allow you to pull the permit. I always hear about investors doing work themselves, however, a lot cities will not allow you to do electrical work or changing occupancy or a number of things without hiring a licensed contractor. Even if you are the owner of the property, you're often not allowed to do the work yourself.

Something that's not talked about enough on here is building permits, specifically with rental properties.

Just a fair warning to new investors out there.  Just because you are capable of doing the repairs to a new or current house does not mean it's legal.  Know the laws of your city.

A common mistake is to think that because you own the property, this means you are allowed to do the work yourself.  This is not the case for rentals in so many markets.  Many markets won't allow you to even put up drywall without having a licensed general contractor do the work.  The city won't even give you a building permit.

It's also going to make a difference based on your net income.  You won't see the tax benefits of incorporating if you're taxable income doesn't reach a certain level.

I have enough expenses that I write off (also depreciation, home office, cell phone, etc.) that it's not going to really give me many tax benefits by incorporating.

Meeting requirements http://smallbusiness.chron.com/scorporation-meeting-minutes-requirements-62256.html

However, those don't really apply as much if you're incorporating by yourself.  Honestly, your best bet is to find a reasonably priced CPA in your state.  Some will give you a free consultation and answer some of your questions.

I'm buying in an area in Illinois.  It's on the border of Illinois and Iowa.  The prices of houses in this particular area make more sense than where I live.

I'm buying distressed and putting cash toward repairing the properties before it's rented.  I can get 3 bedroom homes for anywhere from $20,000 - $50,000.  However, they often need quite a bit of work.

I closed on my first out of state SFH, yesterday. All of the bids on the work that needs to be done are coming back around or under my initial estimates.

This makes my 2nd investment property, and a big thanks goes to the BP community.  One of the most important lessons I learned from BP was analysis paralysis.  This community definitely helped me over come that, and jump into what is shaping up to be a good deal.

$8,000 down, and I expect the home to cash flow roughly $150/month after expenses (including property management), and putting money aside each month for future vacancies and repairs.

Thanks to everyone who takes the time to post their insight on this website!

There are clearly benefits to both options. I personally like the idea of focusing on paying off the property with the highest mortgage payment first to increase cash flow. Otherwise I would focus on paying off the property that has the highest potential vacancy rate, assuming it's a good property you intend to keep long term. It's very scenario dependent. Great posts and information here!