All Forum Posts by: Ryan ODonnell

I'd say in the cycle of life that we all go through, you're going to be better off with "We buy houses". I may be overthinking it but what's a Psych degree for if I don't right? =)
I say cycle of life because if people see those signs enough and they need to sell their house or know someone close to them that does, they will eventually call one. Put out enough of them often enough and it just might be yours!

Seems pretty extreme of a wholesale fee, but I would assume if your end buyer agrees to it then so be it.

There are some investors that are experienced that will take small amounts like that and put it directly into a deal and you can have a promissory note straight up. Why give it to a hard money lender and hope there's protection? I'm surprised they would take that much. I would think they would need to be registered and everything if they're going to be doing that too.

First thing is I think it would be kind of harsh to say someone is an "idiot" for getting in an overleveraged position. It'd be like saying you're an idiot for leaving food on your plate at a dinner and we've all done that. It's the people that load up 3 plates of food and are left with half or more of it that I would call a bit dumb.
Sometimes that's the best way to learn and get experience. You're always going to think something can work, but until you do it you may not really get that it won't. Patience is the key. If I were you I would NOT buy more yet. Make sure you can sustain what you have a little longer and put together some more reserves to cover yourself. I don't like the idea of taking equity out of properties to buy more. If you don't have the money, you don't have it. Leave well enough alone. I've seen and heard of a LOT of people that got into bad spots because of that reason.
WILLPOWER, PATIENCE, and CONTROL will lead to the most success.

Yes, I speak from experience. Just took a 27k hit recently.

You're right Will. This was a much more thorough answer.

I failed to elaborate on what I meant by you can't be held personally liable.

Education generally teaches to put rental property in an LLC or series LLC because then they are treated as a company and you can't be held personally liable.
My accountant is encouraging me to put properties in our personal name into Trusts. I am in the process of finding out about that as well because with these issues you seem to get a different answer from everyone you talk to.
As far as doing it yourself, depending on your state it is usually cheaper to do it yourself, but be sure you have all the details and such you need in your operating agreement. This is the area where your lawyer may be worth the money to understand your situation, what you want to do in the future and tailor it to that.

Always assume they're not going to treat it like they own it...which means they're going to jack it up. Would you rather replace tile flooring or laminate? Would you rather replace nice plush carpet or commercial grade? If it works and looks nice, then tenants usually don't mind. That depends on where and what type of house you're renting also.
You'll probably not save money when it comes to paint really, you either should do it or not and most time you just paint and it makes the place look fresh.
This is where I learned to really know what the neighborhood calls for. You're going to get more for granite than formica in the neighborhood I buy, but would I do that for a rental...no way.

They get $500 in Illinois when I went to do this from Indiana. But sometimes you gotta pay to play.

Ok...I can give you a much better answer because I was in the same boat after I felt I was "educated".
In hindsight the thing that kept me going and made sure I didn't go broke in the first deal or two was RESERVES. Just because you have 50k doesn't mean you have to or should leverage all of that. If I had to do my first deal over I would do it the way I'm doing it now. I find private money and get them to purchase the property. I choose a property that will require about a 30k or less rehab (These are all over the western suburbs in the 200-250k ARV range). Then I negotiate where the investor covers purchase and holding and I cover rehab so I still have skin in the game, they like that. Then we split PROFITS however we agree. I do it that way so that I don't guarantee them a return on their money, but rather a significant portion of the profits.
I also try to stay in control of the purchase, rehab, and sale. Investors will try to tell you how to execute, but in the end you have to make sure they understand you are being paid because you know what you're doing and all they have to do is write checks and monitor progress.
I had an investor try to tell me to replace a toilet! That was just the tip of the iceberg so needless to say I walked away from his money because I didn't have the room to operate the way I know best.

That's just how I do it. Sorry for the long response, but hopefully that's more helpful.

P.S. You need to make sure you have some connections for contractors and who's going to do the work if you want to do a rehab type deal.