All Forum Posts by: Ronald Perich

@Kevin C.Thanks so much for the response! I'm picking some up today!

@Kevin C., @Brian Morgan, @Carlos Flores

I was curious how the vinyl planks were holding up for you? It looks like a much better alternative to laminate and is about the same cost when on sale and you factor in the installation methods. I was looking at the floating floor variety. I can get a good quality product (5.5mm thick) at $1.99 sq/ft. Waterproof, natural look, quiet.

Interested in your thoughts?

@Gino Barbaro, you may be completely correct. I'm not saying there might not be motivation there. I was trying to make sure @Daniel Perea understands that being motivated, even really motivated, doesn't mean it's a good deal.

I do like the suggestion of living in one of the units. Would certainly help with the living expenses. And it might make a small difference in bank finance underwriting.

@Gino Barbaro, this property hasn't had a price reduction the entire time it's been listed - I don't think there's much motivation there. And with those rent targets and the mix of 1 and 2 bed, it doesn't surprise me why she hasn't sold. As Jason Hartman often says, there's always a greater fool who will pay more than I did.

@Daniel Perea,

Welcome to BiggerPockets! This site is a great way to learn more about real estate investing.

I see where you are a truck driver. This probably means you have a lot of time to listen to the radio/iPad...

Perhaps you could gain some additional education by listening to the BP Podcasts, from start to finish. To help specifically with your question, check out:

Getting Started in Real Estate and Raising Money with Brian Burke

Cash Flow, Creative Finance, and Life with Ben Leybovich

The Ultimate Beginner’s Podcast For Real Estate Investors

Commercial Real Estate Investing With Frank Gallinelli

Buying Apartment Complexes, Raising Millions, and Building a Profitable Business with Ken McElroy

40 Quick Tips for Buying Your First (or Next) Investment Property

The home page for podcasts is at:

http://www.biggerpockets.com/renewsblog/category/p...

And perhaps you should put pen to paper and see if this is actually a good deal or not. Let's assume you can get it for $175K. You'll need a minimum of $35K down, leaving you a balance of $140K. 

What will your payments be? 

What are property taxes?

What expenses to you have to pay?

Have you figured out your "vacancy" expense? (hint, how much do you "lose" because it's vacant)

What's your monthly repair budget?

What's your budget for capital expenditures? (on A/C, roof, sewer line repairs, etc)

After all of that, do you still make any money?

And then you have to ask why it hasn't sold in over 2 1/2 years. And why all of the pictures online show vacant units (that's plural)?

From a financing perspective, it will be much easier for you to find financing for 4 units or less. Listen to those podcasts to learn why.

I didn't directly give you the answers you were looking for. As Napoleon Hill said in Think and Grow Rich, "Anything acquired without effort and without cost is generally unappreciated". 

I appreciate your passion for getting started, I really do! But if you are asking these questions, it might benefit you to spend an entire weekend doing nothing but educating yourself in some key areas.

@Matt Kvalheim, it can also the work the opposite way. I recently closed on a nine-unit and was able to challenge my assessment down to the purchase price. I'll save about 50% on taxes as a result. 

I will say, though, that my underwriting of the deal had me paying full taxes just in case my appeal wasn't won. So this is going to work out even better than my conservative numbers.

Something to think about in this situation is trying to make it a win for the person. They are being uprooted from their "home" for the last six years through no fault of their own. Who knows what bitterness this might cause (as they already expressed). And with bitterness comes that tiny little devil sitting on your shoulder. 

Every night while the resident is in bed, that little guy is whispering "concrete in the toilet will show him", "don't worry about breaking that door when you move out", ...

So help this person out if you can swing it. Maybe cash for keys kind of thing or offer to get two men and a truck out to help him move. You never know when they might be looking at one of your rentals in the future.

It's a shame you have to ask a six-year person to move, especially if they have been a decent resident and on-time with their rent.

This would be a partnership, and you need to treat it as such. You need just as much due diligence as if you were buying the property outright. That means seeing the financials, property inspections, etc. 

But in this case it also means that you need to see how well you and your new partner are going to get along. What does the operating agreement state about buyouts? With only 10 years remaining on the note, there must be a lot of equity in the place so why doesn't he have the financial means to take it outright? What is his credit score? Who runs day-to-day? What are the reserves like for repairs, maintenance, and CapEx? What if there is a dispute over a decision to be made, etc.

@Steve BabiakThat was why I put dummy handles for open/close. You have to lock via the deadbolt. No chance of accidentally locking out because you need the key to lock the deadbolt.

I had the opportunity to change the deadbolt core from a landlordlocks.com deadbolt for the first time this weekend. The change out is amazingly fast. About ten seconds from start to finish to change out the core and have a new lock installed. It was a little challenging to install,

I got a different color core for my contractors so they can have their own set of keys while remodeling.

And the master key works for all of them.

The best advice for these is to buy the dummy handle and have the deadbolt for security. They have to use the key to lock the deadbolt when they leave so there should be less chance of a lockout. Just made sure you have the right size of dummy for the size of the door.