All Forum Posts by: Robert Leonard

@Phil C. If it's a dream team, it has to include the crew from "This Old House" as my contractors. :-)

Marketing would be handled by Jerry Puckett.

The sharks from "Shark Tank" would be my PMLs/Finance Division. :-D

Aaron Mazrillo would be in charge of wholesaling.

Oh and, B.A Barrakus (aka Mr.T) would be my property management/eviction specialist! :-P

@Alicia McElroy the 2007 appraisal is just a piece of history like a magazine or newspaper from 2007, a thing of the past. A 5% down loan is most likely FHA and FHA loans now have higher PMI premiums than in the past and they are for THE LIFE OF THE LOAN! That should sound crazy to you, because it is, but that's the way it works now.

I would look for a type of loan that works the old fashioned way if I didn't have the 20% to put down. So you'll at least be able to get rid of the PMI when you get to 20% equity in the property. I would look for one loan product that will allow you to eliminate the PMI without having to refinance and incur closing costs twice. If you only have 5% to put down, then you may have to use an FHA loan and plan to refinance to a different conventional loan, accepting the extra closing costs?

What makes this property a good investment?

What am I trying to accomplish with this investment?

What is my plan b in case plan a doesn't work?

How does this investment add to my personal net worth/income?

What are the tax consequences of my investment strategy?

Etc, etc, ...

1. Safety (If I wouldn't put my family in the house/neighborhood on a temporary basis if I had some kind of emergency that required me to move out of my house while it was repaired, it doesn't pass my location test.)

2.  Affordability of average wage earners.  (If homes in a neighborhood are affordable to average wage earners [yes, that can be dramatically different depending on where you are in the country], that gives you a large pool of buyers/renters to choose from when you sell/rent.)

3.  Clean well maintained properties.  (When people care about their houses and yards, properties maintain value and often appreciate in value.)

@Andrew Kniffin I would scoff at the price tag and insist on other options, but I would not skip getting an owner's title policy.  You didn't mention the price of the property, but rates on those run around 10% of that amount for for every 50k of coverage here in LA.

You say you want to self insure, but $1,940 is what you're "saving" to cover the purchase price of your house and the legal expense of defending your right to the title - I don't think that equates to self-insurance.  Not considering your other assets, the $1,940 is no insurance.

It is a one time premium insurance policy that lives beyond the life of your ownership of the property.  I assure you, I am not an advocate of over insurance or wasteful buying unnecessary insurance.  In my experience, it is an extremely cheap insurance product, but I'm sure, like everything else, there are places where that's not the case.  Insurance is regulated state to state.

@Leslie A. definitely consider this one factor in your screening criteria.  People make mistakes and if there are years since he made this one, look at the other factors of financial and employment stability.

One of my best tenants who lived in one of my properties for almost ten years before he bought it from me was a felon who did prison time.  He came right out and told me his story upfront.  I didn't just feel sorry for him or cut him some slack for that.  When he applied, he and his wife had steady jobs for over 3 years and stellar employer and landlord references.  There are definitely mitigating factors that overshadow past shortcomings.

Hi @Leslie A. ,

It would depend how long ago it was on the charge you mentioned.  I'm leaning toward disqualifying criminal history.  How does that compare to any of your other renters?

I haven't used them and I don't have any affiliation with them, but I've used some other corelogic services and they offer a laundry list of background/screening services at www.myrental.com that I would look into for an out of state applicant.  I didn't see what it costs, but its probably around $30 at the most?

@Barshay Graves if you take the golden nugget from all of the previous replies to your post, your takeaway should be, NEVER TAKE A NO FROM ONE BANK/LENDER AS WHAT BANKS WON'T DO.

You have to do some shopping around and networking with others in your market to find the lenders who will want your business and be happy to lend to you.

This makes a good case for why I standardize and use the same two or three colors that I always match perfectly. You'll need to take note of the sheen (flat, eggshell, semigloss or glossy) of the paint too. It can be tough. You'll need a "chip" about the size of a quarter. You might want to try the color match but expect to at least have to paint the one entire wall to make your "close match" less conspicuous? And always prep the surface with TSP (or a substitute) cleaner to remove anything from the existing painted surface.

@Michael Baradell you are right about brokering a transaction for a commission and the obligations to a broker for doing so, but that is not what we are talking about.  I am talking about buying a property and then selling it.  That's investing, not brokering and not making a fee or commission, but making a profit from an investment.

Will the broker not like it? Maybe, maybe not.  It all depends on how much they have faith in the agent/investor that he made a good faith effort to list the property? That's a matter of their judgment.

I'm not a lawyer, but I am an investor/agent and that's what I think is legal and ethical.