All Forum Posts by: Robert Leonard

@Mason V. welcome to BP!

As stated, you are trying to finance 100% of this property.  There's no way to protect such a private lender if you found one.  A long term financing lender (commercial/portfolio) probably wouldn't approve you with such a source of down payment, which lenders require that you disclose.

Besides that, the numbers don't work. If you stretch the 50k out in payments over 10 years at the best rate you stated, 10%, you have a note of ~$660/month (7,920 annually). That exceeds the current NOI ($7k) which means the proposed financing will not support the debt service.

Congratulations @Nick Merryman !  You cleared the first hurdle, you started!

I have to recommend Michael Quarrels' second podcast here on BP as a source of some gold nuggets on how to build a list and specifically how to do it from listsource.  I'm not actually using those methods myself, but I know gold when I see it.  Best of luck to you!

@Hassan Mahmood tell them there are plenty of landlord's who will rent to them without checking out their back ground, but you're not one of them. 

Wish them luck and move on to your next applicant!

@Ryan Dossey its a pain that people don't bother to call or text when they don't show for whatever reason.  I had about 50% no shows on a recent vacancy I filled.

That's why I always schedule multiple appointments if at all possible.  I always reinforce the idea that they need to call or text if anything changes and they can't make it.  I send text reminders starting about 2 hours before scheduled showings too.

I never call it an open house either.  I think that gives them the idea that you will just be sitting there showing it anyway and it's no big deal if they don't show and don't call.

Otherwise, I always bring my laptop and wifi hotspot and get things done (check out BP) while I'm there at the property.

@Eric Giovannucci in case you haven't already checked it out, listen to this podcast:

http://www.biggerpockets.com/renewsblog/2014/01/30/bp-podcast-055-jimmy-moncreif/

@Account Closed I think the best thing to do is just be straight forward and say, I'm just getting started and I'm looking to learn and get to know active investors.  Show a genuine interest in getting to know the investors you meet and you will be surprised just how much they will usually share with you about them and their business. 

If you get into a good conversation, ask if they are buying and if so, what is their criteria for properties they buy?  How do they usually find the properties they buy?  Who do they know that's a good wholesaler and what makes them a good wholesaler?  I'm shot-gunning questions to you right now as they come to mind, but you probably want to spread them out in your conversation to avoid being too aggressive in your quest for information! 

Anywho, those are some things that come to mind and you can come up with some things to talk about that are in the news about REI in your market. It's always good when you know about some larger developments or other RE related news that will be good food for conversation with those in the industry.

@Nastassja S.  I'm not trying to be your buzzkill, but you need to keep a steady income before you take a leap into the unknown. I understand what you said about the job you had not being what you wanted, but it's better than nothing.  Sometimes it takes times to get things going and you are now offering to give away your first few deals, when you really can't afford that.  3 deals a month is a lot easier said than done.

I think you will do well to try to get a job in a RE related trade/profession (paid assistant to an investor or agent, title company, mortgage broker, lighting supply co, Lowe's or HD, etc, etc.) that will put you around people in the business and allow you to make some steady income while you get established. Then, as you start to develop a steady deal flow, you can plan to be a full time REI. I'm not saying that you have to wait until everything is perfect to leave a 9 to 5, but some patience is required to make a good decision that won't lead to financial disaster.

I think when you know enough to be a full time investor, you will know a good deal when you see one and investors will gladly buy them from you when you present a real wholesale deal to them.  Do more communicating with your buyers to drill down on what their criteria is to buy.

As far as mentors go, it's very different when you ask to be "spoon fed" everything from the basics or when you ask for someone to help you fill in the blanks or help you understand some particular aspect of REI. Experienced investors get lots of requests from people looking for mentors, but a lot of those who want to be investors, have no staying power and you see them once or twice and never hear from them again. If time is our most precious resource, do you think it is worth while to spend a lot of it trying to serve such whimsical impulses?

Welcome to BP @Ben Dubroc !

I manage all of my own properties and I always will.  That's just a matter of personal preference.  I started my own PM company that will manage my properties the way I want them managed. If you want to do PM for others in LA, you have to have a real estate license to do it legally.

If your friend is near the property, maybe he can help you out with your PM needs until you get home to take care of it yourself?  He just needs to understand the importance of screening and not get into a rush to fill the vacancy.  One bad tenant can make the landlord experience a nightmare.  I recommend you read "The ABCs of Property Management" by Ken McElroy.  He has a podcast here on BP and a very informative website too.

http://www.biggerpockets.com/renewsblog/2014/01/09/bp-podcast-052-raising-millions-ken-mcelroy-rich-dad/

@Oscar Macal 

You received some good advice from @Arlan Potter I'll just add a few things that might help.

Your concern about a car accident causing someone to go after other assets is a legitimate concern.  You should decide on your auto coverage limits based on your personal net worth, not based on minimum required coverage like the average consumer.   Like Arlan said, most of us don't have a whole lot to worry about when we first get started, so just be sure to have enough to cover what you have to protect.  Leverage (debt against a property) does serve as a deterrent to law suits when your assets are public information.

When you get ready to make the move to the next level and deal with commercial lenders (often referred to as portfolio lenders) you will most likely need an LLC. Those I've dealt with do take a look at your personal credit up front. That wont matter as much as you perform and run a profitable business.

If you invest in properties in high demand markets, the idea of losing all of your tenants is pretty far fetched.  It's one of the reasons I invest in real estate - people will always need a place to stay.  Is it possible that things could get real bad for some unforeseen economic catastrophy?  Well, rather than debate the likelihood of whether or not that could ever happen, as a matter of strategy, you can buy properties that will make substantial cash flow for you now, and if some doomsday scenario ever happens, you can lower your rents and still pay your notes?  That's a kind of conservative approach and it's what I do.

@Account Closed

You said you are reading the Millionaire RE Agent and that is a great book.  I think the next one you should read is "The Millionaire RE Investor" also by Gary Keller.  It reads like it was written as the answer to your original post.