All Forum Posts by: Rumen Mladenov

I have a rule. Security deposit and first month rent must be certified funds - cash, money order, cashiers check. I accept personal checks from month 2 onwards, until one bounces - and then it is certified funds only for the remainder of the tenancy.

I am in a similar situation, with about a dozen properties. I have 3-4 of my properties with HELOCs in first position; any cash I have available goes to pay down the balances, and whenever I need money for a repair or a new purchase, I draw on the HELOCs. I honestly do not see the point in keeping cash reserves earning 0.05% or whatever it is these days. The only valid concern would be if you are afraid that your HELOC(s) may be frozen, but in my case, even if that happens I still have credit cards with substantial limits I could use for emergency repairs.

As for a separate personal reserve - yeah, if you expect major repairs, extended multiple vacancies, a credit freeze and a job loss to happen to you at the same time, hypothetically you may end up needing it. Hypothetically, you may also need a boat in case there is a great flood and your city is submerged in 10 feet of water.

2003 corolla. Roof is bent from the roof rack when I hauled 10 16 ft 2x8s for a deck on top of it. I also hauled doors, a range, a dryer etc. on top of it - most of my properties are within a mile from the Home Depot. The employees who work there already recognize me - I guess the story about the Corolla that hauled all that lumber was repeated more than once among them!

Not that I planned it that way - it only happened because they did not have a rental truck available that day, and I did not want to delay my project.

Is there a way to do a title search yourself? As @Adam Drummond 

correctly said, having a professional do it for every property you may be interested in gets really expensive. Especially given that may of them get stayed...

Same story in nearby New Castle County, Delaware. A couple of years ago I was buying REOs at very good prices, and it seemed like no one else was bidding. Nowadays I can't seem to win a bid, no matter how high I go! I got one as a back-up bidder because the winning bidder backed off (it had an illegal addition that he did not want to mess with. I just tore it down).

@Joe Villeneuve 

I am not sure your track record and the OP's are comparable. Perhaps I am wrong, and the OP has a number of successful deals under his belt - if that is the case, I apologize for making the wrong assumption.

Unless you have skin in the game and your partner is protected in case of default, you will not find a credit partner.

For example, you can get 70% of ARV funded by a credit partner if you either come up with the remaining 30% on your own, or bring a deal with 30% instant equity. If you fail to perform, the credit partner gets the property.

Most credit partners, at least the ones you would find at the REIC, have a "BS detector" so inflated and unrealistic ARVs do not fly.

I did that in one of my rentals. The tiles tended to slide down at first, I had to reposition them several times over a couple of weeks until the glue finally set. Looks OK, and still hasn't peeled off after 3 years. I do not have it by the stove though, only on the sink side. It is doable, however it was more hassle than I anticipated, and I am sure it will not last as long as ceramic or glass.

HOA stands for homeowners association, it takes care of the common grounds in the neighborhood, and of the swimming pool if there is one. All homeowners pay HOA fees towards that, occupants and investors alike. You can have in your lease a clause that the tenants are responsible for the HOA fee, however if it is not paid you are the one on the hook as the homeowner. I pay it myself, and use the free access to the swimming pool as a way to attract more/better tenants.

My rule is that rent must cover PITI, 20% estimated vacancy/maintenance/CAPEX, 8% property management fee (I manage myself and consider this my second job income), and any utilities/HOA fees that I pay. As long as that is covered and there is some leftover (positive cash flow), I am happy.

The key metric here is the 20% estimate. In my market it is achievable; it may not be in your market.