All Forum Posts by: Robert Leonard

Hi @Mylene Mejia ,

Welcome to BP! I recommend you look up The RING found on meetup.com. It's a REIA in Baton Rouge that has lots of members and great meetings every month. I'm a Lafayette investor, but I am going to be investing in the Baton Rouge market in the near future.

I highly recommend the podcasts. They are done in an educational format that makes it like short courses on different strategies by experts on those strategies. Really good stuff that you'll probably want to take notes as you learn from. See you around here on BP and hopefully at one of The RING meetings!

Robert

No cash, no credit cards, no line of credit, all means no way to pay for the unexpected if you figure out a "no money down" way to" jump in" to the business. You really need to have your personal finances in order to avoid painting yourself into a corner. Bad news travels faster now-a-days than it ever has. If you get into a property in a subject to deal and find yourself unable to pay, do you think that won't get plastered all over the Internet and ruin your name?

Leverage (credit) is more powerful in real estate investing than in any other type investing the average person will ever encounter (I think commodity options is the only area leverage is more powerful?). You are at a real disadvantage without it in this business. That's why you should make it a priority to get yours in order.

You do not have to have 20% to put down on your first property, but you absolutely have to have some way to pay for the unexpected - always expect the unexpected.

@Marta M.

@James Mudd Using simple rule of thumb analysis, tells you the cap rate would be closer to 7.35% with both sides rented.

2 x $950 = 1900/month x 12 = 22,800 Gross Rents / a reasonable expectation of expenses of 50% = 11,400/155k = 7.35% Cap Rate

You will get the accurate numbers if you follow @Mehran Kamari's advice, but that cap rate is way over optimistic.

It doesn't sound like a bad deal. If I had a 30 year loan at today's rates on this property and I wanted to make more investments, I would not pay a dime of it back early. You will end up borrowing higher interest money for future investments if your cash is converted to equity in this property. But I guess that's another conversation. :-)

Ah okay @Franddy Aguasvivas , it's not such a big deal if it's the norm for the area. Here, they just put the vinyl on over the wood siding. The idea of removing the wood siding and replacing with vinyl sounds labor intensive and expensive! Get quotes for both options. The price will be market specific and you'll only know the right answer for what's your best economic choice once you have those quotes in hand.

@Franddy Aguasvivas I would personally never cover up classic solid wood siding with plastic, just because it needs a fresh paint job. Personal preferences aside, what's acceptable in your market? Vinyl is very often seen as a cheap finish and isn't allowed in most historic neighborhoods. You are dealing with a huge house and I wouldn't expect the type of person to buy a house that size to be excited about the cheapest siding option available on their next house. I almost missed that part about 3 family. Are there any others near it wrapped in vinyl?

A fresh coat of paint done right will make a house in need of a paint job shine like a new dime! It has to be done right though and it's all in the preparation. No amount of good paint will make the peeling paint stick, so it all has to come off, followed by sanding, priming and at least two coats of a good quality paint and it will last for years! Contrary to what people who try to paint over peeling paint will tell you about painting it over again every 4-5 years.

I think it's a worthwhile investment and the house will be worth more when you preserve the siding in a fresh paint job rather than cover it up with plastic. Just my $.02.

Funny that should happen to you right now @Mike Baker

@Mike Baker

@Mike Baker

@Anthony Bell If your buyer has 21k cash or their own financing, the seller's loan will be paid off and the seller will receive 3k at closing if the buyer is paying all closing costs? If your buyer only has the 3k and needs financing, the deal could be structured as a "subject to" purchase where the seller's loan would stay in place and your buyer would make payments on the seller's loan.

All of the money exchanges hands at the closing and through the escrow process, performed by a title company or closing attorney. Never give money to the seller, any earnest money deposit should be held by the title company or closing attorney. They also handle the payoff and all payments that happen at the closing so you have a professional legal expert handling all of the transaction in accordance with the law (theoretically).

NOTE: If you need to take the subject to route, you will need to find a title company or closing attorney that does them. Not all will perform that type of transaction.

@Jason Eyerly Absolutely. I'm not a wholesaler, but I'm always telling wholesalers to never think of a lead as a deadend. When a property doesn't work for a wholesale, there are plenty of times when it will work as a listing.

If you aren't licensed, what better way to offer something to a licensed agent in exchange for those all important comps than some listing leads? If you are licensed, list them!