All Forum Posts by: Randy E.

 Ignore him.  Take another look at his last name.  Troll account.

Regarding your possible deal, I'd have to say that without credit, money, or experience, this is one you're going to have to watch slip away. The first thing you should do is begin saving money. Second, begin mending your credit. Third, along the way, learn more about the many facets of REI. A year or two of doing these three things will put you in good position to begin the next step.

You may say, "A year?  Two years???  I don't want to wait that long!"  Well, sometimes, it takes that long or longer.  When I was making plans to buy my first investment property, I saved and prepared for over 2 years to get ready for the venture.  Unless you have a six-figure job, great credit, and thousands already in savings, you too will have to plan and prepare.  The good news is, you can do it.

Good luck.

Another thing to consider is some (most?) insurance companies will not start an insurance policy if tree branches are contacting the roof of your property.  You should have the branches cut (at the property line) ASAP.  Don't wait and bicker with the other property owner. 

@Mike Jones, 

Congratulations on saving a good little chunk of money.  And good for you for thinking ahead and also trying to help your family.

I don't see anything in the immediate area close enough to your price point.  I wonder if you would be open to moving a little further away?  I think you might find something closer to your price point elsewhere in NC.

For instance, Hamlet has one house listed at $20K, and another home under $30K that includes one house and two on-site mobile homes.  Laurinburg has at least three houses under $20K.  Red Springs has a couple in your price range.  Of course, the condition may not be top notch, but all look inhabitable while you work on them.  The biggest question is whether or not you and your mother are willing to move 20-30 minutes down the road.

Saint Pauls NC has a nice 1200 sq.ft. house listed in the mid-$20s that you should be able to get up to speed without too much money as long as you know someone who will do plumbing work for you cheap.

If you have approximately $20K, you ought to be able to find something in your price range in rural NC, but it might not be in your immediate vicinity.

Good luck,

 I've had three tenants install alarms before telling me.  Neither required drilling holes or damaging the properties.

 Two told me immediately after and offered the code.    The other tenants didn't want to provide the code.  Didn't bother me. If I needed to visit the house and couldn't deactivate the alarm, I didn't have any problem with the alarm going off.  It's my house and I don't mind if the police visit.  The alarm won't prevent you from entering.  You still have a key.  If the tenants changed the locks without notice, I'd be much more concerned about that.  My leases have a clause forbidding the changing of locks.

If they are paying on time and are otherwise great tenants, I wouldn't worry.  If it overly concerns you, modify your leases going forward to account for this eventuality.

 Nothing to add.  I just wanted to copy and paste that!

@Delmas Edwards,

A lot depends on your personal financial situation.  Worst case scenario, for whatever reason the property is vacant for five months.  Can you afford to pay your bills and the three loans used to buy/rehab the investment property?

If the answer is "yes", I would definitely keep the house.  If the answer is "maybe for two or three months", I would still keep the house, but I'd be worried.  If the answer is "no, not even for one month", then I would start looking for other options ... but I'd probably still keep the house.  A bird in the hand and all that.

One option no one else has mentioned ... Are you in a position to move into the property yourself?  If you experience a long vacancy, maybe you could move into it and pay down the debt that way.  At some point, one year or two, you'll have enough of the debt paid down for it to not be so onerous.  

Bottom line, you hustled and got an investment property when there probably didn't seem like you had much of a chance to do so.  Further, you got it rehabbed and leased at a decent price.  Not knowing other factors (any deferred maintenance remaining, etc) I would have to say this is a success.  You just have to be careful and not spend money elsewhere until you get this debt under control.  Once you reduce/eliminate this debt, this property could be a great aid in getting you to the next step.  Congrats.

Good luck!

 Hear hear!  I agree.

Three months and not one qualified applicants would be a sign to me to lower to rent.  As @Amy Beth said, renting it for $50 less a month is better than sitting empty three months.  Look below at two apartments that hit the market Jan 1.

Example A: Rent of $1000/month.  Takes three months to lease.  Rent collected for year = $9,000. 

Example B: Rent of $925/month.  Takes one month to lease.  Rent collected for year = $10,175.

Holding out for that extra $50 or $75 a month is costing you a lot more than whatever you think you might be losing by holding out for months for a marginally higher rent.

It sounds like you already know the local rent should be lower, but you're rationalizing your higher price by mentioning the age of the building.  There are other factors other than simply the age of the two buildings.  

Have you seen the interiors of the other apartments to determine if they are similar or better than yours?  Have you driven the various buildings to see if the streets are the same as yours?  Don't be fooled by assuming short distances don't matter when it comes to rent prices.  Very similar properties three blocks apart might fetch prices $200 apart.  You have to put your feet on the ground (or wheels to the street) and conduct an honest comparison.  Or better yet, just heed the market.  No qualified applicants in three months -- the market is telling you something.

"I'm a nuclear physicist and my husband doesn't understand my job or want to understand it.  Should I quit being a nuclear physicist?"

"I'm a oncologist and my husband doesn't understand my job or want to understand it. Should I quit being an oncologist?"

"I'm a romance novelist who also plays cello in the state orchestra, and my husband doesn't like romance novels or classical music. Should I quit both?"

We can all agree that we would all say a spouse who considered quitting her job as a nuclear physicist simply because her husband didn't like algebra would be a completely inane idea. The same is true with REI. The answer is not to quit. The solution is to forge ahead without asking for his help, which is probably what he's saying anyway -- that he's not personally interested and doesn't want to spend his efforts on that front. Fine. You do that, and let him pursue his own goals.

Good luck.

 You said you qualified for a mortgage, but the amount was "laughable."  For a beginning investor, instead of designating the amount laughable, you should figure out how to make that amount work for you.  Lower your expectations of the house/neighborhood you want, then go search for one the approved amount will allow you to purchase.