All Forum Posts by: Teresa F.

I use Equity Trust -- great customer service but fees increase based on value of plan. I have heard good things about Cama Plan. They are based on Pennsylvania but handle accounts nationally. $50 to open an account.

I have purchased a few short sales and the banks have taken the position that there is essentially no contract until the deal has closed. That means that they are free to negotiate, walk away, etc., until the ink has dried on the closing docs.

In response, I take the position that we are negotiating until we close or one of us decides to walk away. I no longer accept the bank's BPO as the "final offer" but feel free to counter. When a short sale I had been sitting around for for over a year "restarted" with a new negotiator, I "restarted" too.

Regarding your original question, it is important to have a reputation for closing deals. However, having a few cooking and then walking away from one that no longer looks as appealing probably isn't going to hurt you. Another option may be to make offers that you could rapidly hand over to someone else. I've done that a couple of times. The agent didn't seem to mind changing an LLC name on the contract.

I've had REO's and short sales that came my way from back up offers I submitted started looking appealing when another buyer walked away.

Happy shopping.

Teresa

Hi Corey! Why be the average Joe when you can be the Amazing Corey? I'm a gal, and I'm fortunate enough to practically trip over great deals in my market. Unlike many of the people who have responded, I don't wholesale. If I run across something that doesn't work for me but would work for one of my rehab buddies, I will give it to them. Building good relationships with other investors, Realtors, Title Companies, attorneys, accountants, contractors, etc., will not only make your life easier but will ultimately bring you deals.

Shanequa mentioned that she has seen properties on the MLS only to learn that they are already gone when she calls. The Realtors I know bring me "pocket listings" that I go see and have under contract before they are listed on the MLS. The Realtors that do this for me know (1) that I will CLOSE the deal, (2) will refer other investors, and (3) will give them the information they need when they need it. I have also given advice to some who became investors.

Just be patient and help others when you can. I promise, it comes back ten fold.

Teresa

Cora -- The easy any to whether a buy and hold will work is whether you end up making more money than you spent at the end of the month. In this market my area has so many deals it is pretty hard to go wrong. Probably the easiest way is to buy the least expensive property you can in a low crime neighborhood. The sketchier the neighborhood, the fewer people are going to want to be your tenants.

Figure out what your monthly expenses will be -- mortgage? insurance? property taxes? utilities? maintenance? Plan on putting a little aside for major expenditures -- HVAC, new roof, etc.

Now, with those expenses every month will you have anything left over from rent?

Probably the two most important things a "buy and hold" newbie should be aware of is "holding costs" and "over rehabbing." For holding costs -- can you afford to hold the property while you are rehabbing and getting a tenant. I've turned properties in one week (best) and 8 months (worst). It is easy to "over rehab". You want your property to be really nice so you see every defect and want to cure even the most minimal of problems, then you start putting in higher grade finishes. Take time to look at open properties in the neighborhood and see what they offer -- granite countertops or laminate? High end appliances or no name brand? For my properties in DC, black or stainless steel appliances make a big difference (in some neighborhoods -- it would need to be high end name brands). For my properties in Huntsville, Alabama -- the French doors make the property stand out, the appliances are simple and white.

Hope that helps,

Teresa

In my condos, the first person who walks in fills out an application and generally becomes the new tenant. The second person who comes in, usually fills out an application as a back up.

My apartments also rent quickly (the best school in the city is across the street) but have more turnover than the condos. My single family houses have the greatest maintenance expense but the least turnover.

Hi Cora! Congratulations. I am a California gal (raised there) but now live in Maryland and primarily invest in the DC Metro area. A few suggestions -- first, find a local Real Estate Investors Association (REIA) and go to some meetings. All REIAs are different and frequently they will be "sell a thons" with a guru trying to sell you a program. Keep your credit card in your pocket but talk with the various attendees, ask for business cards, and talk with other investors in your market.

The easiest way to figure out what a good deal is is to learn your market. If you know what properties are on the market in East Oakland, Pinole, Emeryville, or Richmond, you'll know when a good deal pops up. Find a zip code, or small area, and learn all you can. What I do is follow the money. When the city has decided to spend money (e.g., a new Bart stop) I know that the value of the property is going to increase.

When it is time to look at expenses, etc., there are some good free websites to help you look at rental rates and property analyses -- I like FinestExpert.com and Rentometer (for rental rates although FinestExpert does this too).

Keep us posted!

Teresa

I've started buying more condos. Nathan's comments cover my reasons for concern. I ultimately decided that the return on my condos is worth the risk. I am in the DC market so that may make a difference. First, I am able to buy at less than 30% of tax assessed value. Second, my rehab is generally painting and cleaning. In my area there are no condo communities that meet the FHA requirements (unfortunate but true). Regarding owner occupancy limits, I am going in as an investor. If there is a limit on investors in the bylaws, I don't buy. If a subsequent owner occupancy bylaw is proposed, I make it clear that I want to be grandfathered in. Regarding tenants, I have class A, B, and C properties. I've had great tenants in my class C and not so great in my class A and vice versa. I think that success with tenants is careful screening and clearly defined expectations. I've learned the hard way, but . . . I have learned.

I send an e-mail to my tenants at least sixty days before the end of the lease and ask if they plan to renew. At that time I let them know what the new rent will be (generally 3% increase) and remind them to renew their renter's insurance and send me a copy of their declaration's page.

At initial lease signings I generally tell tenants that there is an annual increase in rent so none of this is unexpected and I do not provide explanations. I've had a few problems but generally, my tenants are long term (3 plus years), responsible, and likeable.
I've never had a tenant not renew because of a rent increase.

I am expanding my business (buy and hold) to include a property management company. I've started looking at software solutions and decided that a web based solution will probably work best. Buildium looks good but I've never used it and would like to hear from others who have. Thanks, Teresa

Same color paint, same finishes for all properties.s I never use flat paint. Although eggshell finish costs a bit more it looks good. I use semigloss in bathrooms and kitchens and white gloss on trim. Although I have a few properties with carpet, I am phasing it out. Although my tenants are typically long term (over three years), I have had to change carpet for each turnover.

I've used the Allure with great success. Tenants love it, it looks great and high end.