All Forum Posts by: Pete T.

I would personally suggest to hold off on buying any more courses, as you have not found value in those you have already obtained. There are plenty of free or cheap resources including this forum, your local library, REI meetings in your area. I would save that money and but it toward your first deal. I cant speak to your area, or even wholesaling, but I would assume it is more that you arent looking in the right places to find the deals.

It depends on your personal preference. Typically, cheaper neighborhoods show better numbers, but normally have more losses due to damage, more repairs, more vacancies, and possibly a worse tenant pool and less appreciation. But those things can change too. Usually the reputation of the area is more important in the present than the reality (ie- the "war zone" neighborhood might not have the worst crime, but gets horrible rents bc everyone "knows" its horrible OR the area w/ the "best schools" that might not have the best stats, but everyone considers superior drawing a waiting list of tenants trying to get in).

@Kassandra T., are you telling me you had this in your lease and took someone to court because they didnt pay you rent and you were unable to get a judgement? Is there a law in your state about excepting partial rent (ie-accepting w/ reservation in writing)? I would be curious to more details of the case.

@James Wise hit the nail on the head w/ the largest red flag- previous owner not paying taxes in a rough area- he probably did the minimum or less for maintenance (could be a reason 2 people arent paying). Those out of pocket cost could be extreme.

Congrats Darren! I am looking to do something similar (likely on a much smaller scale) in Virginia Beach soon.

I have thought of out of area buys for better cash flow, but it is nice to be able to deal w/ everything on your own, especially when issues or vacancies occur. You mentioned owning/living in a MF. That could be a good start since you have to live somewhere and can take advantage of PR benefits if it is a 2-4.

@Jon Holdman as usual, great post, but maybe the better question is whether to rent or own bc I dont think most people want to live w/ their parents or under a bridge. While you have taxes, repairs, and everything you mentioned- even if you were locked into a high interest rate- if it is fixed, the payment remains the same, while rents typically continue to rise. Also, you mentioned the cost of refi, but I would consider that another advantage of paying less. And the ability to borrow on your equity should really be looked at as an advantage. How it is used is a statement of how that person plans their finances regardless. Finally, if you are holding the property, you dont have all of those selling costs and it will be paid off at some point as well, also increasing savings. And even if you do sell that PR, you can avoid being taxed on that money as well.

You can use some of the good and bad (depending on state laws of course) by offering a "discount" of maybe 50 when the tenant pays on or before the 1st as well as whatever your late fee is when they dont pay by what ever the grace period. I havent used the discount many times, but it amazing how often I get paid on the 1st instead of the 5th when I do.

@Ann Bellamy I think what he is trying to say is that appreciation should be considered it isnt something you can count on. Sure, there are trends, history, and new developments that can lend to predictions on what areas may appreciate best, but I would rather count hard numbers (income, expenses, vacancies, management, maintenance, debt service, etc) and take appreciation as a bonus. There are a lot of people that bought expecting appreciation, that didnt have an exit strategy and were not in the best situations when they had to sell.

@Nick B. I am sure he is alluding to the fact that he uses a lot of motivational quotes vice providing very much actual useful information. I believe a PR can be an investment if it is purchased for that intent. Many people benefit from PR benefits buying a property they do not plan on staying in forever. Even if you dont, you have to live somewhere and the added costs can be compared to tax advantages, equity buildup, and the fact that it will be paid off one day (or sold).