All Forum Posts by: Stephen J Davis

I would write the earnest money contract based on closing after the tenant is out. Put the closing date out 75 days and subject to the tenant being out. See an attorney to help write the first one. The seller is then responsible to get the tenant out. I also did a double close on this type of deal. I used an earnest money contract with my buyer instead of the usual assignment contract. Set the same closing date and find a title company that will do double closes without double closing costs. I hope this helps and don't give up. Good luck.

Yes, that happens a lot more than people think. When I was a wholesaler, I always just made the offer with about $10,000 in it for me. Now these were only $150,000 to $200,000 homes. You may be working with much higher priced homes in CA so you have room for more. I also wanted my buyer to pickup 15% or more equity after purchase price, rehab (if any) and closing costs. This kept them coming back to me. This is different if there is a lot of rehab (more risk.) Formula for turn key (no rehab): ARV-$10,000-15%-closing costs is the offer I made. If there is rehab you would subtract that too. Good luck Jeff.

Section 8 housing is not a guarantee of payment. I had a 42 unit complex that was all section 8. Many times I would not get paid due to failed inspections. In every case, this was damage caused by the tenant that the tenant never paid to be repaired. One was a just a broken window pane. I went, at my expense, and fixed all the problems. It was over 60 days before I got the back rent. Be very cautious with section 8. I prefer tenants that can pay their own rent. 

He is right about CA but wrong in general. Yes, I think you should consider out of state investing where you do get cash flow, equity build up and appreciation. The problem with break even deals is vacancy and maintenance which do occur. The other problem is what happens when you lose your job? Remember, it's not if, it's when. I stand by don't buy anything that doesn't; cash flow. The end goal is to have enough cash flow that it meets and exceeds your personal bills. Appreciation is the icing on the cake not the cake. The cake is cash flow. Then, when you lose your job, you don't care. Have you read Kiyosaki's Rich Dad, Poor Dad yet?

@Daniel Kirchen undefined

Yes, I would get a bid from a general contractor that can handle all the work. Be sure to check 3 references if you don't already have a good relationship with a GC. The GC can make or break the deal. Is this a flip or buy and hold?

Yes, as I understand it you will need to get the bank to do a short sale. This can take a long time. I saw one go for over a year but I think it is usually about 4 to 6 months. You will learn a lot by working this deal even if you don't get it done. You will be a better investor for it. Good luck.

I always use 30 year fixed mortgages so I get the highest cash flow each month. As a rule, you never pay off your property anyway. The house will be income producing debt which is good not consumer debt which is bad. Good luck with your first deal. Do you know how to properly analyze the property?

You rock! That is the best thing you can do to start out. Then join a local RE Investor group to get contacts and support. Check out https://nationalreia.org/find-a-reia/ Thanks for your service!

You may want to think about investing out of state if there is no cash flow where you are. Your goal is cash flow as you said so to invest without it makes no sense. There are many turn key investment opportunities that include out of state property management. I like https://www.empireindustriesllc.com. The owner, Steve Rozenberg,  is a outstanding individual and is a member of Bigger Pockets. You can search his name to find him.

@Vic Liang Sorry, misread the $50,000,000 number. Still doesn't sound real to me. Every one of my deals was 20 to 25% down and secured by the property. I even had personal liability on the initial loan. When I refinanced that was removed. Do some more research before moving forward with them. Good luck.