All Forum Posts by: Randy E.

Most community colleges offer classes in carpentry/plumbing/hvac/etc that would be invaluable to you as a newbie with less money than knowledge/skills.  The classes are very affordable, costing you more in time than money.

For someone in your position with no wife, no children, and no overall responsibilities, I'd recommend those classes to hone your ability to handle minor breakdowns. 

Buy a 3 or 4-unit using a FHA loan, and you'll be on a fantastic start to financial independence.

Good luck.

Hi Verna, that's the way it is around here, too.  Sometimes, no amount of reasoning is going to work.  That doesn't mean give up what you KNOW is right.  It means you have to stand up and take control.  There might be some mild turbulence early on, but once the money starts to trickle things get better.

 I'm glad you didn't give up on doing what you knew was best.  In the end, your entire family reaps the benefits of your wise decision making and your strong backbone.

Cheers,

You'll get different answers here because people have different goals.  

For me, your two questions conflict with one another.  What I would do wouldn't produce the the greatest quickest increase in cash.  I'm a buy and hold guy, so I would spend the money on buying a property to rent and hold long term.  Like I said, there no great immediate return on investment, but that model suits my goals perfectly.

On the other hand, I could, if I so desired, generate cash from such a deal.  For instance, I just bought a property that, once I'm done with the rehab, will have me all in at less than $20K.  I'm certain the property will appraise for a high enough value that I could take out two-to-three times (at least) my initial investment in a refi.  So, you could say I could have it both ways if I wished.

 Those are fantastic numbers!!  You did a fine job of finding a great deal.

Oh yeah, HOA fees. That's always a concern for me, but I'm sure it's reasonable or you wouldn't have done the deal.

@Moshe Eisenberg congratulations!  Getting two at a time must be a great feeling!

My wife still doesn't get it.  Maybe you'll get lucky and your wife will see the light and be agreeable to your investment plan.  Maybe she won't.  Even if she doesn't, you should forge on with your plan.

I finally took this approach. Say your wife was a theoretical physicist -- you probably wouldn't understand anything she did with her job. You wouldn't expect her to quit her job just because you didn't understand what she did. Well, just because my wife doesn't understand the principles of REI doesn't mean I should continue to invest and provide the best future I can for my family.

Sometimes you simply have to make an executive decision and be willing to live with the fallout.

Good luck.

The tenants should pay at least the $700.  I would first ask them to pay upfront.  If they are financially unable to do that all at once, I would accept what they have now, and deduct the remainder from their deposits.  I would then inform them they need to replace the amount deducted from their security deposit accounts ASAP, whether it be the following months, or broken up into payments over two months. 

Good luck.

Glen,

Without knowing any of the actual details, it sounds like you got taken by a company more interested in fooling newbies than one interested in teaching newbies how to become investors.  The entire setup worries me and I think they skimmed you every step along the way.  

Now that you fully realize your loss, I'm not sure how much you can lessen your losses.  I would bet your losses are already lost.  Without knowing the financial details, it sounds like your total all-in cost is much much higher than what that house would sell for on the market today.  One way to get a quick estimate of current prices in that area is to go to one of the real estate web sites (realtor.com, zillow, trulia, etc) and check what houses in that exact neighborhood are selling for.  

Don't be blinded by what you have put into the property.  The numbers won't lie.  If the current value is much less than you can afford to throw away, you'll have to accept that truth.  

If you can sell at a price that is realistic to the market and that you can accept, great.  If you can't accept such a loss, you need another plan.  One would be, as suggested above, to find a Property Manager (not affiliated with the company that put you in this deal) to rent the property for you.  You'll pay them a commission, 10% or more, for their efforts, but you won't have to deal with the week-to-week issues of being a landlord.  The other option is, also already mentioned, look into bankruptcy if you can't afford to keep carrying the loan.

Whatever you do, you need to get a tenant in there very soon.  As Colleen said above, you don't want that house in that location to sit vacant for months on end.  If you allow that, you'll be looking at putting more money into it or selling for even less than you can now.  Get somebody in there -- use a property manager and pay his fee, so you can get a properly vetted tenant in place. 

Good luck,

I think $550 is too much for picking up and installing a water heater.  Then again, I'm a cheap b&*%*#%.

I'm sure some other people (especially plumbers) might say that's not too far out of line.  Personally, I wouldn't pay more than $200, and I'd try to keep it below that.  I also try to have the heater on site beforehand, but that shouldn't be more than a $50 charge if you can't do it yourself or get your handyman to do it.

You are not a jerk to ask.  I don't expect her to agree to such a massive discount.  Imagine if your commanding officer told you they were redeploying you to a locale you had  previously been deployed to a year ago, but he said they were going to pay you less money because you'd done that job just nine months ago?  You wouldn't agree to those terms.  Unless the realtor is much more a friend than an agent, I don't expect she will agree either.

Not a jerk to ask.  Possibly naive to expect her to agree.  Definitely a jerk if you don't quickly and gracefully accept and understand her refusal.

Cheers,