All Forum Posts by: Derek Dombeck

The seller is basing the loan on a 20 year amortization but there will be a balloon payment of the remaining loan balance after 10 years. Does the seller mention the interest rate they want to charge? What is the purchase price in comparison to the down payment they are requesting?

Happy Investing

Derek Dombeck

Hi Antione,

You probably have a Service Master franchise office near you. They can give you a free estimate and could probably give you a rough idea just from pictures if you have any.

Happy Investing

Derek Dombeck

I am looking for feedback on what answering services are being used. I have been looking at Pat Live, but maybe there is something better out there. Thanks BP members in advance.

Happy Investing

Derek Dombeck

I am definitely an advocate for BOTH insurance and proper entities. @Derek Lacy, the whole reason of structuring an LLC for example, is to decide ahead of time how assets will be divided in the event of divorce, death, partnership disputes, etc. Why let the judge decide after the event has occurred, when you can have these Issues addressed from day 1 in your corporate docs or operating agreement. The key is not to use a boiler plate doc package from somewhere like legalzoom.com, but to actually structure each entity to you personal situation.

I would much rather spend an extra $1000 to form an LLC to protect my equity and assets than hope my insurance policy covers me when I need it.

Again, I believe you should have both. The right insurance is very important. 

Happy Investing

Derek Dombeck

Steve S 

I have spent years learning the hard way about asset protection. Everyone is going to and should have a different opinion on protecting their own assets. But don't take this lightly. If you want to own rental property in your own name, if and when you run into a litigation situation, ALL of your personal assets could be lost. 

When a company owns the rental property, the company may lose it's assets, but your personal assets should be safe if you structured the company properly.

As for insurance, it is always extremely important to have proper insurance. But, insurance may not protect  you if:

1. If there is proof of your negligence

2. A civil suit is brought against you

3. Divorce

4. Your untimely death ( personally held assets may end up in probate )

5. And countless other reasons

My point is, why work your *** off to build a portfolio of property and take the chance of losing it all because you didn't educate yourself on ALL of your options. Whatever you decide, it will only affect you. The rest of us giving our input have NOTHING to lose.

Choose wisely.

Happy Investing

Derek Dombeck

@Roman Pak,

I have also had this happen over the years. I believe the key lesson is, NEVER base your business plan on 1 contractor, real estate agent, banker, attorney,etc.

Several years ago, I was using 1 agent fairly exclusively. We had a system working very well..........until my agents marriage problems and inevitable divorce brought MY business to a crawl. That cost me thousands.

ALWAYS have a plan B,C,and D.

Happy Investing

Derek Dombeck

Daniel

There are still some banks that may allow the seller to carry back a second mortgage. They will be harder to find, granted. But if the house has some upside potential ( cosmetic improvements that you are planning to make ) a lender that you have built a track record with may write the loan. This doesn't happen overnight and most likely will be done by a portfolio lender on the commercial side of the bank. 

Happy Investing

Derek Dombeck

Hi Ross,

I would caution anyone who does business outside of an entity in this day and age of frivolous lawsuits. The opinions of others to NOT have an LLC are fine for them, as it is a personal choice. But what happens when your $5000 lot ends up in some sort of lawsuit, that may have no merit what so ever, and all of your personal assets are locked up until the suit is settled.........

This will be a no win situation for you.

Also, make sure you educate yourself on entity structures. They are not all created equal.

Happy Investing

Derek Dombeck

Hi Tristan,

I can't speak on behalf of the laws of Texas, but in general if giving cash for keys will get the possession of the property back sooner allowing it to be leased back out sooner, it is a good idea. As far as how much....... calculate how much an eviction along with additional days of lost rent will cost. Any dollar amount less than that is what I would offer the bad tenant. Start low, depending on there circumstances, they may accept $100 or $200. Never give them the money before they have all of their stuff out and hopefully they clean out the garbage too. Ask them to sign a simple agreement stating they have moved as of the current date so you have proof that you did not force them out unlawfully.

Good Luck

Derek Dombeck

Hi Michael,

I do have a RE Brokers license, but I only got it because of the incompetence of the agents in my area. When I did decide to get it, I had been an investor for 9 years already.  I would suggest not doing it unless you want to act as an agent for others. If you are only going to buy and sell for your own portfolio, and you have a license, the Brokerage that you go to work under will dictate how you can conduct your business and may require you to pay them commissions on all of your transactions regardless of their involvement. In my state, I was not required to be under another broker for 2 years before being able to have my own brokerage. Most states are going in that direction.

Happy Investing

Derek Dombeck