All Forum Posts by: Sharon Powell

Hello Mark!  Well done on doing your homework and laying a good foundation.  

My thoughts in your particular case are to go with your instinct!  If this kind of free time is a rarity, then use it to do things that would be more difficult with family home.   

Capital and contractors are clearly important, but I’m certain that if you were to find solid leads, your investor friends would be happy to help with the deal.  If they aren’t able to, call me! :)

So listen to yourself, put that enthusiasm to work and go meet your target neighborhood.  

Best of luck!

If you wait until you have a deal to find property management, contractors, etc, you’ll be under a deadline and won’t have much time to vet your team, unless you already have contacts in the area who can help. 

You’ll want to check with your own attorney to see if your state has bar reciprocity with the state you want to invest in. If not, you’ll need a local attorney.   And although it’s not necessary, it is a nice touch to bring your business to a credit union or lender whose funds stay in the local economy.  

What DIDN'T go wrong on my first flip?!   Went into a joint venture with lots of excitement and trust, but no understanding of the rehab process.  Turned out my "seasoned" partner didn't have such a good grasp either, so the budget was off by nearly six figures.   The property was a "niche" property- high end and gorgeous, but needed a pretty specific type of buyer.  My partner was also the contractor, and the workmanship wasn't at a level I wanted my name on, so things got awkward sometimes.   The project ended up going under, and I cut my losses at around $50k.

What would I have done differently? I'd have started with a different property, in a price point that would have been easier to market and sell. I'd have done my own due diligence on the rehab numbers and ARV, using BP calculators and checking the numbers with a mentor. Heck, I wish I'd HAD a mentor before taking on that project, because they would have said to run like hell from this project and this partner.

It's not always like this, though.  There are shady investors out there, and there are also stand-up, honest people who just want to make neighborhoods better and make some money doing it.  Best of luck on your first project, and may you avoid all the pitfalls mentioned in these posts.  Great question!

Thanks for the date correction, @Rick Pozos!  

And Cassie, keep looking and be patient.  Your deal is out there... It will be one that fits your financial position and investing goals, and it will make sense to both you and your husband.  Good luck!

Hi Cassie,

Everyone is right to point you toward BP for resources to help you analyze your deals.  Look for the analysis calculators- they do the heavy lifting for you.  I would add that as you run numbers, find rental comps in that neighborhood to see if the rent price you need to charge will be sustainable.

Investors always want to preserve their cash as much as possible, but when looking for a long-term buy and hold investment, it's not uncommon to pay a bit more up front on the property purchase as long as the cash flow numbers meet your goal.  

If you're interested, there is an investor's group meeting at Luby's on Fredericksburg Rd by Loop 410 next Tuesday evening, and the focus is on newbies.  The moderator is @rickpozos if you'd like more information. 

Good luck! 

Welcome to BP! You'll find all the support and information here that you could ever want.  

Funding tip:  My business partner and I are working with Red Door Funding for hard money.  Look for Manny; he's been a great person to work with. 

If you haven't already done so, you could check out the REIA's and Meetups in town. They are a good way to meet other investors, lenders, realtors, etc, and to find your way into deals.

All the best to you!

I truly appreciate all the feedback, and I love the diversity of experience and opinions. 

I am a "retired military spouse" myself and it's ingrained in me to look out for my miltary family. I truly want to help people whenever possible while making sound business decisions, and this has been a tough one.  

@John TaylorI'm not familiar with Guarantee but I'll look it up...maybe it will provide the opportunity to help and have some peace of mind too.  

I just got off the phone with the property manager who evicted my candidate. She confirmed everything regarding the eviction, was very complimentary about the tenant's cleanliness and care of the property, and went so far as to say that she would definitely accept her back at a different property. 

Would that information change any of your minds? 

Good morning! I'm screening for my first SF rental, struggling with a decision, and would appreciate some feedback.

The candidate I like best is a single mom with 4 well-behaved children. She seems to have a pretty good head on her shoulders and gives me the impression that she'll take good care of my house and be an asset to the neighborhood. She's also a disabled vet and will be using the HUD-VASH program, which covers 70% of the rent and will be paid directly to me from HUD.

However, her credit is a complete disaster. She was very upfront and explained all of it as being related to an ugly divorce. She showed me her last 12 months of rent receipts (1 month was late) and bank statements (which show income that meets my minimum criteria). The other zinger is that she is being evicted, with a plausible explanation: the AC went out several months ago, the landlord didn't fix it, and when the Houston heat kicked in, she took it upon herself to get it fixed and chose not to pay rent to cover the cost. She's now evicted as of August 1.

What are your thoughts about renting to a person like this? Would bad credit and an eviction trump guaranteed rent payment and a good fit for the house/neighborhood?  

That's very encouraging- it's so nice to learn what works from those who have gone before. 

I'll be sure to check out paynearme also, @Missy H., thanks!