All Forum Posts by: Thomas Franklin

@Johanna S. if you decide to keep your home as a rental property, do you have enough capital to purchase a new home? You did not mention, if you have children. An option would be to sell your home and use the cash, to purchase a residential property. You can use FHA Financing requiring a 3-5% down payment and you will receive residential loan terms that includes a 30 year amortization schedule. The plus side is you will receive management and landording experience while your tenants pay the mortgage. The FHA will require you to live there a minimum of one year before you can move out and lease the unit. The downside is such a purchasing scenario does not provide you asset protection, with respect to closing on an Investment Property in the name of a LLC. This is one option to consider without knowing the full details, of your personal situation. I hope this helps you.

@George Mealy As a seasoned Investor, I strongly suggest that you vet all people that you want to make part, of your Power Tram. Many people make great promises, but they cannot deliver. I'm sure you have a website that such as the Department of Business and Professional Regulations where you can check licenses, look for complaints, etc. I would encourage you to always ask for references. I hope this helps you, to achieve your Investment Objectives.  

@J Beard Thanks for the appreciative words. I always strive to have my comments add value, to a Forum Thread. 

The first thing I would suggest is understand why the seller is motivated. Why is she selling? Why does she want all cash? You can ask questions, in a way that is not too intrusive and asked showing genuine concern. If you can understand the seller's needs, you can be a problem solver and maybe negotiate a lower price creating a WIN-WIN Situation, for everyone. As far as calculations goes, you need to have a Realtor or yourself obtain, at least three comps, of similar homes that recently sold. If you have a mix of layouts such as a 3/2, 3/1, 4/2, etc. take the sales price and divide it by the total square footage, of living space. This will give you dollar per square foot. If you know the subject property's square footage, of living space, you can work backwards to calculate the home's value based on the comps. Do not use Zillow or other Real Estate Valuation Websites. These websites provide guesstimates regards a home's value. I would make an initial offer, of less than full value. Of course, I would expect the seller to make a counter offer, but this gives you room to negotiate.

@Joshua Pavao Thanks, for the kiddos! In addition to market sense and people skills, REI also requires knowing what information is needed to determine feasibility, of acquisition, deal structuring, how and if to partner, building the right Power Team that wants to see you succeed and is not only in it because the/ she sees dollar signs. Your Power Team should compliment/ enhance your work ethic and have strong morals, ethics, and values. Consider mistakes as an opportunity, to learn; however, with the right people, in your corner, you can be steared, in the right direction and mistakes minimized.

@Joshua Pavao 

Books are good, for learning the fundamentals. However, in my opinion, and experience you need to learn and gain a great understanding, of the various municipalities, with respect to demographics, pocket market appreciation/ depreciation, pocket market economic factors, demand for the need to rent, the needs of tenants such as close access to transportation and shopping, vacancy rates, etc. None of the aforementioned can be learned, from books. A wise investor will have a good understanding of the marketplace; thereby where to invest, will be dictated, buy one's marketplace insight. 

My company is seeking Investor Friendly Realtors, HUD Authorized Realtors, REO Brokers, Wholesalers, Title Companies, and other individuals with skill sets, to locate deeply discounted distressed homes and facilitate acquisition, in specific Zip Codes of Miami, Florida. My company is an ALL Cash Buyer. These assets will be rehabbed and listed, for Retail Sale. If you feel you can be an asset and add value, to my Power Team, please message me, with your phone number and Email address.

Regards,

Thomas

@Melissa Gittens 

You are absolutely correct that locating an Investor Friendly Realtor that understands both the RE Marketplace and the Investor's needs is essential. This is the quagmire and having to sift through the pitches.  

Hello @Cristina Andino

I look forward, to reading your BP Message and possibly doing deals together. 

@Joshua Pavao 

It is very wise, of you, increase your REI knowledge. It is equally important to keep abreast, of the market where you wish to invest. Miami has many municipalities consisting of varying demographics and varying pocket economies.

You asked me about what Commercial Properties I owned. I primarily owned Apartment Buildings, in Little Havana and Coral Gables. For Little Havana, there was nominal property appreciation, great cash flow, and a very low vacancy rate. The majority of Latin Renters are like planting a tree. Once they move in, they rarely move out as long as they are treated fairly. For Coral Gables, there was huge property appreciation and a lower cash flow, and a higher vacancy rate.

I kept the total number of units per building to less than 35 units. This was my magic number, to self manage. One strategy I utilized is I had an onsite Property Manager that was a tenant. This was factored into my initial Vacancy Rate Calculation, during my initial number crunching. There was a Management Agreement in place that was specific in the duties and responsibilities, of the manager. The manager was given a 90 probation period where I reduced their rent 50%. After the 90 days, if I was satisfied with their performance, they would live rent free as long as he/ she continued to perform. The Management Agreement contained a clause that if he/ she failed to perform, at any time, they had the option of paying full rent or finding another residence. Having Onsite Management negated the need for me to deal with late night trouble calls, rent collection, serving various notices, overcoming a language barrier, etc. This strategy increased my monthly cash flow 8-10% because I did not utilize a professional Management Company that typically charge 8-10%, of the gross rents collected per month, as their monthly Management Fee.

If you are looking to owner occupy, you may want to consider starting out, with buying a Duplex, TriPlex, or a Four Plex. Assuming you have a respectable FICO you can buy, with a FHA Loan (3-5% down, a 30 year amortization schedule, and a residential loan rate). You live in one unit and let your tenants pay the mortgage and other property expenses. This will give you experience as both a Landlord and Property Manager. The downside is you will need to live there, for a minimum of one year; AND because you closed personally, you will not have Asset Protection, in the form of closing in the name of a LLC. If you want to close in the name of a LLC, Mortgage Lenders will offer you Commercial Loan Terms (25-30% down, a 15-25 year amortization, and a ballon due in 5-7 years). This is what I am encountering, in the current Mortgage Industry.

If you think you will go FHA and then Quit Claim the property, to a LLC you run the risk of the lender discovering a Title Transfer and activating the Promissory Note's Acceleration Clause that will call the Note due in 'x' number of days.

I hope this information helps. Please let me know, if I can assist further and let's connect as colleagues.