All Forum Posts by: Mark S.

@Sharad M.

You're a machine! I love it. Motivation for me to get started. I've been mainly looking at MLS and REOs. Occasionally, I'll look in our local paper and there are some FSBOs. I just can't find anything where the numbers work.

Do you do this full-time? Is there a lot of competition for these properties in your market? What type of neighborhoods are these properties primarily in?

Sharad M. , where did you find this deal? Was it a foreclosure or what? Sounds like an amazing deal. I need one like that!

Okay, so I feel like I'm talking to myself in this thread. Maybe that's because many of you that were going to chime in already have, and you're sick of me ranting / raving. This will likely be my last post on this thread if no one else chimes in (yay! Right?). I slept on it, and after being up for hours reading more about the area online (specifically, several online forum posts about what goes on in that area in regards to drug dealing, etc.), I've decided that even though I like the house, I just can't buy in an area like that and feel good about it , even if it is being managed by a PM. There's certainly a lot more to total returns than just Cashflow, but as a buddy of mine said (and many of you have already, in some way, said), "Mark, all that just to get your cell phone bill paid every month? It's not worth it, dude." So, I will be letting my realtor know that I'll be passing in this one. If anyone disagrees and thinks I should (really) buy it, please speak now or forever hold your peace. ;-) Thanks to all that have contributed to this thread.

David Beard Need you on this one, bud. What do you think? You asked in one of your earlier posts about the neighborhood. I've been looking and this is about as good of a deal as I've found in a while.

Got the crime records today. Not sure exactly what to compare it to, but found the following: 3 "shots fired" in past year. 3 "terrorist threats" (what, exactly, constitutes a terrorist threat?!) Multiple theft calls A few burglaries A few harassment calls Several other rather minor calls (dog barking, noise disturbances, etc.) Looks like a C- / D+ neighborhood to me. Anyone else ever get crime records for an area before buying a property? I don't really have much of a benchmark.

The bank came back and said they'll accept my $38,000 original offer. They will not do any more repairs. Looks like all is have to do have the flooring in the utility room (rubber vinyl cheap stuff) relaid and replace the side fence. Shouldn't be more than like $1,000 - $1,500 total. Still need to see what inspection finds, if I accept. Got crime records in the mail to me. Should I accept and get rental #1 underway or what?

I think it depends, like you said, on the individual's goals. In your example of a 5% CD versus a 4% fixed mortgage, one needs to factor in the after-tax return of that 5%, which, after taxes, will be less than 5%. I suppose someone could make the same argument for tax deductibility of interest in a home (although, that's for primary residence; not sure if that applies for investment real estate). I think responsible use of leverage can be a great thing, but liquidity also has value. In most cases, a mixture is almost certainly appropriate.

It'll be interesting to see if they react. Originally, I was ready to be a buyer up to $42,000, but was hoping for $40,000 or less.

If they DO come back with something, should I come up and start negotiating or still hold firm seeing just how far they might come down?

I offered $38,000. Asking price was $45,000. Seller comes back at $45,000. I said, "next!" Just out of curiosity, what are the odds the bank responds again and comes down?

Thanks, everyone. After looking at a few more properties and crunching the numbers in my area, I'm realizing that the deals here are a bit tougher to come by. Also, at the price point I've been focusing on lately ($80K and under, mostly), there's a lot of action.

I spoke with the assistant chief of police in the area and told him exactly why I was asking. I'm also in the process of requesting formal crime records documents. Long story short, it's low income, but it's not THAT bad. The neighbor I spoke with may have been a bit overly sensitive.

I have mixed feelings about it, but I'm taking a shot. I'm offering $38,000 with a few contingencies. After further researching other rentals the area, I could almost certainly get $650 to $700 / month. I guess my original estimates were a tad too conservative. Still might not be a home run, but hopefully isn't a horrible start.

Crossing my fingers that I'm not making a horrible mistake...