All Forum Posts by: Bart H.

Bart H. has started 11 posts and replied 1128 times.

Originally posted by @Cliff Mccue:

I remember talking with an attorney who was a real estate investor and he told me that what he would do is instead of drawing up a regular lease. He would draw up a lease option contract or maybe it was a lease to own contract. The sale would have to be executed after each year and the given price. If not, then there would be a new contract drawn up. He said the reason why this worked is because the HOA is not allowed to stop you from selling your place under whichever terms you choose. Also they are unable to pick who you sell to.

The one downside to this is that you now have a target on your back and the HOA will look to make your life difficult at every turn. This method has been tested in the courts in Illinois.

I am not a lawyer, nor is this legal advice.

I wouldn't do that because now you are dealing with a foreclosure instead of an eviction if things go south.

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I agree, I think that Dallas is mostly picked over. The easy money has been made.

I don't expect a huge correction, but then again I also don't really expect much price appreciation outside of normal inflation.

Unless another big company comes here. (ie Amazon), I think the market is cooling off a little. I think it will be strong over the next 15 years or so, but I don't think DFW will be anything unique from other fast growing metro areas around the country.

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Originally posted by @Jessica H.:

@Jean H., @Scott L., and @Jeff Bridges - thanks for the additional info on opening a business checking account in order for the deposit-only ATM cards to work.

@Michaela G. - I agree with you. I would also just use the account for receiving rent and move the money to my regular account asap.

@Bart H. and @Joe Splitrock - I will talk to them and see if I can persuade them to open a bank account. I'm stuck with the tenant I've inherited.

Thank you all!

Jessica

What do the leases say you inherited?

Our leases give acceptable means of payment, and cash isn't one of them.

MY guess is even with inherited tenants you can refuse to take cash as payment. Require at the least to get a money order.

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Originally posted by @Amadeus Hladun:

... I knew that was the answer was coming, to be patient.

So what would you say to me if I was looking into getting into a condo that would have mortgage+condo fees that would equal that of my basement unit that I currently live in. Therefore if I got into it and then rented out my downstairs suite as well, then I could be saving an extra $800-$900 a month. Like I know it's not a great deal but I would then be truly living for free and then I would have another property, and the basement isn't completely finished there so I could put an extra bedroom and bathroom downstairs and make it more valuable for when I would sell it. Or would you say just be patient and wait for a GREAT deal which honestly I haven't been able to come across as of yet?

Don't do a condo, 0 appreciation, usually increasing fees and difficulty turning it into a rental.

Live in one of the units of your duplex or to save up additional money to properly buy the next place.

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Originally posted by @Jessica H.:

Hi everyone! I'm so happy to be posting for the first time here at BP! I'm a long time podcast-listener and have been reading the forums and blog posts for a while. Also, I'd like to share that I'm closing on my first rental property (duplex)! I'm signing the final loan docs tomorrow!! :)

Here's my challenge I'd love to get your feedback on. I'm trying to figure out the best way to collect rent for tenants who don't have bank accounts and want to pay in cash. Here's my specific situation:

I inherited a tenant from the sale and she pays only in cash
The property is 2+ hours from where I live so collecting in person is not doable
I'm going to be managing the property myself (I'd like to learn more about this)
The property is in a C neighborhood so I won't be putting a rental box to collect monies

I looked into PayNearMe but that's not available to me since I only have one property. It looks like the only option I have is to open a bank account and give them my bank account # to make deposits in person. Is there anything else I can look into? Or, any precautions I should take regarding the bank deposit solution?

Thanks so much in advance!

Jessica

P.S. I've reached out to PayLease to see how much their services are but I have to be careful on expenses to keep a positive cash flow.

Never ever accept cash. Others on this thread have mentioned a few reasons. We have it explicitly excluded from our lease.

We have begun to accept payments via Venmo, and while we don't get payments that way, we also just set up Apple pay.

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Originally posted by @Kenneth Kussman:

I live in Texas, can I Quitclaim ownership of my home to my son without problems before I get married to keep it out of a new marriage?

Would it cause problems for my son?

Also, I still have a mortgage, will that be a problem?

I am neither an accountant nor lawyer, but here are a couple of potential pitfalls with your plan.

1) if you are still on the loan, you are still liable for the payments regardless of who owns it.

2) If you give your son an asset, there can be tax implications on the gift if it is done incorrectly.

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Originally posted by @Rob Duhon:

I just purchased my first rental. It's a single family home in the Dallas area. It doesn't need much work, but I have to replace most of the flooring and paint. I plan to replace the carpet in the bedrooms, but I wanted to replace the current carpet in the living and dining room with something nicer. The home will rent for $2,350/mo so I want it to attract good renters, but I also want it to be cost-effective and durable. I was thinking either a wood laminate, a linoleum that looks like wood, or a tile that looks like wood. Any advice?

I would go with laminate. Unless the area is prone to water like a kitchen or bath. Or moisture like a basement.

In those cases I would look to other solutions maybe the vinyl in a basement or tile in a kitchen or bath.

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Originally posted by @Will Coleman:

Howdy all,

I am looking to purchase a townhouse/condo or a small small single family rental in the DFW area around $150k. I would purchase this with the game plan of renting out to corporate rentals. I am trying to identify three markets that would have a strong demand for corporate rentals due to hospitals or entertainment etc. I have identified Arlington currently but I was curious if the great people of BP had any recommendations. Thanks in advance!

Might try in the medical district. near new Parkland. Harry Hines/Maple/Wycliff etc.

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Originally posted by @Bryan Tasumi:

Do most properties you buy cash flow positive? What percentage of properties that you purchase will cash flow positive when rented out? 95%, 90%, 80% or less? What is the risk of buying a property that does not cash flow positive?

Do all condos and town homes in Texas cash flow positive? I am talking about in the Houston, Dallas, and Austin areas where the property taxes are high 2.6%+ and have high HOA fees.

I don't really understand the percentage of properties that cash flow positive and whether high property taxes in states such as Texas and high HOA fees always make the cash flow negative or what.

Any advice/insight is greatly appreciated. Thank you!

Absolutely, at least in the financial models we build when buying them they do. We would never buy a house that didn't project to cash flow, and we wouldn't keep a house whose numbers we didn't think would continue to cash flow.

You will find things will come up, especially on newly purchased properties, in the first year or two we often end up needing to do some capital investment, paint, appliances, roofs etc. So sometimes it takes 12-18 months to start seeing that cash flow.

In our market, I think there is a long term capital appreciation play, we also buy in the path of progress so in the future a few of our properties could possibly redeveloped to unlock even more upside.

And I don't think you will immediately get rich with cash flow, it just doesn't happen that way, at least not immediately in most markets.

Others have talked about it, cash flow is your safety net, its what lenders will look at to give you loans, its the margin you have to pay the bills. I would never go into an investment with no cash flow , or no expectation in the near future of cash flow (say a rehab or building).

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Originally posted by @Ryan Fox:

Has anyone purchased a Dallas turnkey property from Memphis Invest? How has your experience been in that location?

I haven't ever had any interactions with them, but my sense is their reputation is that of being reputable. Sounds like they have a system, are able to buy and rehab a lot of properties and have a solid team.

Having said that, I don't think anyone is particularly getting cheap properties in Dallas, at least not to the point where a turnkey property would have an outsized return to their buyers.

If you buy a property, and hold it for 15 years, I am sure you will do ok. But you aren't going to be getting huge cash flow and have a whole lot of equity at the same time.

I personally live here in Dallas, and I see very few deals with much meat on the bone, and I cant imagine that Memphis (or any other turnkey provider) is really selling properties that are giving investors both great cash flow and great capital appreciation.

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All Forum Posts by: Bart H.

Bart H. has started 11 posts and replied 1128 times.

Post: HOA won't let you rent out your home

Post: Is Dallas, TX a good place to invest?

Post: First-Time Landlady: How to collect rent from cash-only tenants?

Post: What would you do in my situation??

Post: First-Time Landlady: How to collect rent from cash-only tenants?

Post: Quitclaim ownership to son

Post: Best Flooring For a Rental

Post: Best places to buy in DFW specifically for corporate rentals

Post: Do most properties you buy cash flow positive?

Post: Memphis Invest (Dallas)