All Forum Posts by: Peter Tverdov

A wise investor told me never to partner. I will never say never, but the deal has to be right for me to do a JV and I don't want to be in it long term if I do a JV. A property is not worth losing a friend or family member over.

Thanks for the refresher that this game isn't just gravy. 

I personally don't get caught up in the rat race on here of people who brag about the amount of homes or doors they own. What I care about is ROI and in my case, cash flow. I wouldn't want 10 properties valued at 50k each that combine to cash flow 10% a month. I rather have one property valued at 500k that cash flows 10% a month.

That being said, smaller and cheaper homes will always need owners and to those who like to specialize in that niche, good for them. 

Find your niche. For some it's SFH, for others its MFH, some like Class A neighborhoods, some like Class C. Some like mobile homes, some like student housing, some like commercial property.

Be concerned with how fast your money is growing, not how many "doors" you own. 

I want 15% ROI as a minimum (if financing) so its usually 10k-20k per year that I want to clear before taxes. All cash would be closer to 8%-10% probably. I prefer to have the opportunity to "force appreciation" and walk into some equity. If the house is right next to mine I might consider 12-13% because I'd like to own enough close together to knock them all down in the future and build an apartment building. I own in C-D neighborhoods though.

@Nick West how much equity did you receive (percentage)? What is the exit strategy and what percentage of the appraised value of the building was your up front fee. I ask because I am possibly in the early stages of doing something similar with an investor and want to receive some equity in the deal while they have hinted at a large commission. 

I started doing this two months ago and I'm addicted. I even gave it to the bank when applying for a loan recently to show them how serious I am. I'll do it for life now. Those who called it a financial report card are right on the money.

To me it's all about cash flow and your ROI. I like to get a minimum of 15% COC return on rentals that I buy (which equates to me finding maybe 2-3 deals per year to consider in my target area). There are A LOT of bad landlords out there. I am sure plenty are on this website. I see people buying rentals in my area for 3,7,8% COC return and the houses stay in poor condition because the landlord has no capital to spend on repairs/improvements.

Your ROI is the most important. Not how many "doors" or "houses" you own. Your passion to landlord is the second most important. Leverage is also a beautiful thing to use. A lot of people are scared of it because they don't understand it.

If it's in a C neighborhood chances are you will make tenants happy with a security system because you will be attracting tenants from C neighborhoods. I have seen systems in A & B neighborhoods so I don't think you'll be scaring anyone away by having one. Not to mention you get a discount on your homeowners for having one installed. Some of them also have alerts for smoke/carbon. Overall, it shows you are serious about their safety.

I use FrontPoint security. They are more expensive than ADT but they are also better in my opinion and burglars aren't used to disarming them compared to ADT and Slomin (which seems to make up the majority of security systems). I will always have systems and motions lights on every side of the house in my rentals as I want to make it clear to my tenants that I care about their safety. 

Originally posted by @Denise Evans:

Most short sales fail because the listing agent puts an unreasonably high price on the property, and nobody makes an offer. In my market, a short sale offer that is 15% to 20% below prevailing market prices will be approved by the lender. That's because the bank analysis is always "Will this short sale generate more money than a foreclosure alternative." What they really mean is, "Will this short sale generate a sum of money that is not substantially less than an REO sale, minus costs for holding, repairs, sale and closing, discounted to present value?"

A short sale closing is cash quickly, for sure. A foreclosure is cash in the future, MAYBE in the amount of the appraisal, maybe  not. It is a gamble.

Once you understand that, you can make offers on a large number of properties that are overlooked by other investors.

Denise, I was wondering if you could elaborate on this point further. I've seen you mention it in other threads. Maybe you could write a formula that would help all of us figure out (or have a ballpark idea) what the banks minimum acceptable bid is? I know you said the bank minuses out expenses after FMV, well what/who do they pay? lawyer? certain fees? how much? What interest rate do they pay on that money over a year? Etc.

I ask because I am currently evaluating a short sale that is waaaay over priced. I want to offer 15-20% under what FMV is for the property and want to know if that price is in the same ballpark as the banks minimum.

Peel and Stick tiles make all the difference vs. roll on linoleum. The linoleum is so cheap looking I can't stand it if it's in any apartments that I own. P&S works great in older homes with some settlement in the floors. Spend a little bit of money, you'll have a more attractive looking place that good tenants will appreciate.

I can't believe anyone would give him a dime. It's hard enough watching his shows. The over acting is awful. I prefer Flip or Flop (which isn't terrible) or Fixer Upper.