All Forum Posts by: Thomas Williamson

Joel thanks for the insight, and numbers. You're correct it's not a home run today. It's going to be a cash cow for many years to come, and as for the "over improved" it does not have granite counter tops or stainless appliances. The finishing are nice but basic as well, they're all brand new. I subscribe to the Lifestyles model of best product best price. I fix or replace everything up front so I don't have the back end hassles with maintenance later. Some go cheap that way, I choose not to, especially on a long term buy and hold. Location location location. Sometime's knowing what's coming in the future area is worth paying a little more for now.

Thanks Hugh, I'm always learning something on each property.

Wow I never thought about a lien, I guess because here in Georgia all utilities go in the tenants name, and they're responsible for all bills. The utility companies go after them if they don't pay and not the property. I would never put a utility in my name, but if I had to worry about the property having a lien, I think I would at that point as well. The things you learn on BP.

I've used My Smart Move extensively. For married couples or multiple adults that will be renting, I get separate e-mail addresses for each adult, then send each of them links for the application. When you set the property up in My Smart Move, you can add as many e-mail addresses as you want to when you get ready to e-mail the app link out to the applicants. I make all adults submit one. That's also how I gauge how serious they are about renting the property. I have found the site to be extremely helpful in locating good tenants, and the report back even gives you a recommendation of accept or deny based on what was in the report. You may already know this as well, but you can set the site up so that the applicant has to pay for it. All you have to do is set the property up, put the applicants e-mail address in there, and hit send, that's it. Hope this helps, Good luck.

For me reading Rich Dad changed my life forever. No, Robert won't tell you how to get from A to Z, but that's what's great about Rich Dad and many of his books since then. It forced me to think, and to come up with solutions to my own financial problems. After reading Rich Dad, I took 55,000 I had in a retirement savings account and put it to work with real estate. 3 years later, my wife retired at age 42, we own 9 s/f properties and I just purchased my first M/F property. I owe the motivation to do all that to Rich Dad Poor Dad. I've been to real estate seminars all over the country, and I'm always amazed at how many real estate investors got their start after reading Rich Dad Poor Dad. Do I think he's a fake or con man, no. He's in this to make money of course, but he's also helped thousands and thousands of others along the way. BTW, if you haven't read Kim Kiyosaki's books, I would encourage everyone too. Her's are geared more for women, but still inspirational as well.

Jon no kidding, I was surprised that the building hadn't burned to the ground yet with the wiring issues we found.

Dawn you nailed it! Vanities were from the Depot. I think I own part of my local Home Depot by now, seems like every time I walk in a Home Depot it's at least 500.00 no mater what. :)

Sure Josh not a problem. Purchase was 155,000, we spent approximately 20,000 per unit in rehab times 4 total units. My original estimated rehab budget was around 60,000 total. But you know how rehab goes, we found more problems than we anticipated during rehab. The building is almost 30 years old, so I decided to replace everything, and I mean everything other than all the sheetrock and plumbing. On the interior anyway. I really wanted to replace all the windows and siding, but the budget couldn't take it, so I spent all the money on the interior.

I conducted a pretty thorough inspection before we closed (this is a foreclosure) by the way. During rehab we had to pull sub floors out to replace duct work and that's when the real fun started. Fire damage! one unit had previous extensive fire damage, which really affected the electrical wiring in the unit. One of the previous owners did the bare bones to get the unit back in shape, and then sprayed Kilz (paint) on the fire damage, and left all of the charged wiring in place. I pulled mirrors off the walls and found exposed wiring that was live, lying against 2x4's in every unit.

But it was all still worth it. The rents aren't spectacular (750.00 per unit) but the location is worth the long term investment. Another note on the rents is that the competition around me with just as nice properties, and even nicer in some cases are only charging 750.00, so that hurt my rents. The good thing is the rents are going up in this area. Great area, with a lot of nice shopping centers, next to a great high school, and a Costco coming soon as well. I can't say for sure, but my guess is that the appraisal will be somewhere around 300,000 by this time next year. The bottom line is I'll be cash flowing great on the property once it's all rented out, all in expenses each month are only 1,000. That's taxes, insurance, and mortgage. Does not include vacancies, repairs, etc.

So the pic you see with the trees obscuring the view of the roadway was an interesting story with the city. The trees are on the city's right of way, but they were a major liability for future tenants trying to pull onto this busy roadway. I asked the city to cut the trees down since they were on their right of way, and a major liability. Long story short, they all but laughed at me and told me it was my responsibility. I sent certified letters to several people in the roads dept, planning dept, and Mayor with the same request, and explained how this was a major liability for the city. Crews were out the next day cutting the trees down. Sometimes unless you put it in writing, nothing will get done with local governments.

Looks fantastic Jon, great inspiration.

My wife and I set up the 401K plan (solo 401k) in February. She was able to leave her job because of our cash flow. I didn't want to simply withdraw the money and lose much of it to taxes and penalties, so we set up a corporation, established the 401K plan, and the account was funded. We used the proceeds to pay for another rental property that cash flows 500.00 a month after all expenses.

We chose this method over the self directed IRA, because I wanted to have access to the cash flow now. You can't do that with a self directed IRA. You must be very careful doing this.

I used a company called Guidant Financial. I know there are a few more out there that do the same thing, but I liked what I saw with them. They did exactly what they said they would do every step of the way, and provided an excellent attorney for us.

Again, you have to be very careful with this setup. The cash flow goes back to the business bank account, and my wife is paid as an employee of the company, thus the funds are pulled back using a paycheck to my wife. It seems like a lot at first, but once you get it up and going, it's not a big deal.

The cash flow we will receive from that property we bought, will pay out over 108,000 by the time my wife is 59 1/2. That's when she would have been able to withdraw the money from the 401k. Not to mention appreciation, tax benefits, etc, etc. We are now pulling money out of that house (putting it back into the business account) and on our way to purchasing more and more properties. Real estate kills 401ks all day long. Good luck.