All Forum Posts by: Randy E.

@Kendall Mitchell, I would be very careful about this from what you have said so far. 

1) How well do you really know this guy?  You worked with his mother before, but how many hours have you actually spent talking to him face to face and getting to know him?

2) Prepaid card?  Joint account funded with only your money?  That's a big NO SIRREE BOB!  

3) You mention you already have trust issues with him.  That for one reason or another (you were busy doing other things, or he didn't make time for you) he never met with you to discuss the partnership in more detail.  He hasn't given you any reason to trust him with tens of thousands of your dollars.

4) Contract, contract, contract.  If you really are going into business with anyone, you should have a contract that states how much money is being invested by each person, duties each person is responsible for doing, what percentage of the property will be owned by each partner, who is responsible for adding more money to the partnership if repairs/expenses exceed projections, if the partnership is dissolved how will the property be divided, etc, etc, etc.  Please, DO NOT PROCEED WITH ANY DEAL OF THIS SORT WITHOUT HAVING ALL THESE DETAILS IN WRITING.

5) Not pertaining to this guy, but don't jump into paying to attend a Real Estate Investing conference presented by some famous Real Estate GURU.  Just.don't.do.it.

If you are serious about getting into Real Estate Investing, please spend time on this site reading and researching as much as you can. While you're doing that, save as much of your money as you can, each and every month. The more you learn and the more you save will help you get a good start investing in Real Estate ... some day. I don't think you have enough knowledge about this field to start throwing money around TODAY. Soon enough perhaps, but please read as much as you can beforehand. And when you're ready, think of utilizing a VA loan to buy a two-or-three-or-four unit building, living in one unit, and renting out the other units. That would be a fantastic way for you to get going.

Good luck, Kendall!

-Randy

Hi @Gregory DiFranco.  Welcome to BP.

I lived in the Norfolk/VaBeach area for a couple of years a long time ago, and enjoyed every second I was there.  It's still a favorite vacation spot for me.

Good luck in your REI adventures!

I am a long time partner in a REI group that owns two smaller strip malls in a neighboring small town. One is in the middle of downtown and has eight units (we use the smallest unit as our office,) the other is a half mile away and has four units including one restaurant space. All the tenants are small-town mom-and-pop type business owners, insurance offices, lawyers, hairdressers, home health care, dentist, etc.

Most of the units have long term tenants, some more than 10 or even 20 years or longer.  The other units turn over every two-to-four years.  Every once in a while, we'll have a unit turn over in six months or less, but that's rare.  However, as mentioned, a vacancy in a commercial unit might take months to fill with a quality tenant.  With residential properties, I can usually have a new tenant in a couple of weeks.  

The maintenance is mostly nil.  A hot water heater one year, a HVAC unit one year, repainting parking lot one year, that sort of thing.  Not very detrimental to the bottom line.

After I get a few more residential units under my personal REI business, I plan to get a (smallish) strip mall. I just want to make sure I have enough capital before I make that plunge.

Good luck.  And yes, location matters!!!

Lois, if you don't mind me asking, what was the nature of the negligence? 

@Jason Henry just go to the bank where you have your money deposited and ask them for a letter that says you have $X at your disposal.  That's all the seller is asking for.  

If you're trying to buy a house and you don't have any cash saved, you probably have applied for and been prequalified for a mortgage.  In that case, go to the bank and ask for a prequalification letter that states how much you have been qualified for.  

If you don't have cash and you haven't been prequalified for a mortgage/loan, the seller probably won't want to go any further with you.  Sellers ask for PoF statements from buyers so the seller and/or agent won't waste time negotiating with someone who can't actually buy their properties.

Good luck.

I recommend calling a lawyer in the state where the house is located and asking him/her.  Most likely, if the current occupants won't move out on their own, you'll need to begin legal eviction.  Until they are out of the property, short of an explicit invitation by them to you, I would stay away from the property.

@DaVon Brooks, how much cash do you have saved to begin your new goal to be a real estate investor?  Have you approached a bank to see how much of a loan you would qualify for?  

The first thing you need to do is figure out how much of a budget you have to invest.  Once you know that, you can begin assessing various properties based on how much it would cost to purchase+rehab.  It will be easy to determine if this property is for you once you know what your budget is?

LOL. Do they really advise their students to do that?

@Tony Lipari, while I didn't do an Owner Financing deal, I also partially purchased my first (and second) investment houses using personal loans.  I say partially, because I also used personal savings I saved explicitly to buy property.  The terms of my no-collateral Line Of Credit personal loans were 3yrs with interest rates similar to yours.  The interest rate didn't bother me because I knew I wouldn't be holding the loans for long.  I paid off the first one in about 18 months, and the second one about the same.  Just picked up my third house in an all-cash deal, and I still have my personal loan LoC to use for something else.

As long as the borrower has the requisite willpower, I think it's a good route to finance your REI dreams.

Congratulations, Tony.  That's an awesome start!

I own only SFR, not MFR. I include language in the lease that says it is the tenants' responsibility to mow the lawn. I haven't ever had a problem, except once when a tenant didn't mow for a few weeks and the city placed an ordinance violation on the front door for overgrown grass. I reminded the tenant that, per the lease, any fine levied by the city for such a violation would be his to pay. He mowed the grass the following weekend, well before the waiting period ended when the ordinance warning actually became an ordinance fine.

Some landlords contract with landscapers to tend to their properties and simply build in the cost of the service to the rent.  I think either way is good.  However, my reason for doing it my way is, if a tenant is willing to pay $50 more a month in rent, I'd rather it go into my pocket, not a landscapers'  -- and I haven't run into any tenants who refused to move into one of my houses because lawncare wasn't included as a perk.