All Forum Posts by: Bill F.

@Stephen E. I don't think so. I go to the Coastal Carolina REIA in Wilmington for their monthly meetings.

@Andrew Laing

I second @Aaron Merriman's thought. If at all possible have the current owner handle his tenant and sell the property to you vacant. It will make your life vastly simpler.  

If that can't happen, I'd make sure to screen the teneants before you buy just like you would if they were applying so you know what you're getting into before you own them and the bulding.

Everyone seems really surprised that the market doesn't react when the Fed Funds rate goes up. The market has already accounted for a FF rate higher than it is. Due to QE I, II, III et al everyone knows that rates must go up. Having rates at or near zero limits the Fed's ability to enact monetary policy, which no one wants.

The plus side to higher rates is that many large investors will move out or lessen their invesmtents in Real Estate and back into more traditional securities.

@Craig Montesano

What type of properties are you looking for? Condos/Townhomes or SFR and are you investing or buying a personal residence?

Carolina Forest has good schools and a mix of Condos and SFR.

I'd stay away from Midway Park and the area North of 24 and East of Western.

PM me and we can talk more.

@Tareq Salaita Any market that sees significant appreciation, like Atlanta, will see an increase in people trying to arbitrage the market. When prices rise, margin is create seemingly out of thin air. Wholesallers can leverage this situation into large returns in a short amount of time with little or no money down.

This says more about your local market than "Real Estate" on the whole. It could be a sign of a bubble in Atlanta if the increase is prices comes from speculation rather than a growth in population, new industry, or wage growth.

I heard line once that made a lot of sense: "Real Estate is local, but credit is national" When credit flows easily it fuels speculation across all markets. Right now the credit environment is much tighter, despite the low interest rates. Foreclosures numbers aren't high and a lot of people that didn't get out of their homes are just getting back to even with their loans made in 2006-2008.

Short answer, real estate is cyclic so we may see localized downturns, but nothing on the scale of 2008.

@Johnny Fullerton Look at this no different than a tenant who wants to move their unemployed significant other in or someone who wants to rent out a room; however, in the case the 'rent' for this room is. 

What would you do then? 

I think the residency laws in Massachusetts will play a large role in your decision.

Right now the current tenant meets your income requirements for the apartment by himself, so unless your application standards hold that all members of the unit must meet all the criteria individually, logically you shouldn't deny they new guy because he doesn't meet your income requirements. 

Thinking about the worst case scenario, your current tenant moves out and the unemployed one stays, forcing you to evict him. The question you have to figure out how to make sure that doesn't happen. The 100% certain way is not to allow the guy. You could screen him, but not put him on the lease. At a minimum you'll know if the new guy has any felonies or evictions which can help inform your decision, but I'm not sure that will completely shield you from the worst case.

I think you either say no right off the bat or at least go through your screening process, minus the income verification, which will give you a better idea if the new guy is a deadbeat or if he honestly did fall on hard times.the character of your current tenant can help you figure this out and I wouldn't say yes unless I meet the new guy in person. 

@Blake King I keep most of my short to medium term savings in a GMNA Bond Fund.

This bond fund specializes in government mortgage-backed securities. The fund primarily invests in GNMA securities, which are backed by the full faith and credit of the U.S. government and typically offer a higher yield than U.S. Treasuries. Most Brokerages have one and mine has no fee to purchase shares. You get better yields (2.3%) than a money market with negligible decrease in liquidity. Even during 2008-2009 I think the per-share price went down about 2-3% at most over a week and picked back up, so volatility isn't that large of a concern.

@Leon Lee Once the closing attorney files the paperwork with the registrar, you own the property. If someone still lives in the property, you are really inheriting a tenant, even if its for a week. What will happen if they refuse to leave? You don't have a lease with them or even know their names, credit history, employment status.

You could push closing until you take possession when you take ownership.

You could draw up an addendum to the closing docs that 'rents' the home to the individual staying in the house at a pro-rated amount with a security deposit. I'd also throw langue in that makes the seller responsible for any expenses associated with an evection.

When will you do your final walk through of the property? I'd use that as an opportunity to speak with the people who will stay if at all possible.  

@Patrick Philip

First off, three assumptions: you are passionate about Real Estate, you want work in the industry day in and day out, and are willing to use your inheritance with the end goal of growing your wealth more than you would if you bought a portfolio of indexed mutual funds.

Buy a business that operates in the RE industry. Don't buy a turnkey property, buy the company that sells the turnkey properties. Don't hire a management company to run a 40 unit apartment building, buy the property management company that runs 300 units. Business come with employees that already follow per-established systems and process that service a customer base. If you buy an apartment building, you need to make your own business from thin air, even if you hire a PM. 

If you like the idea of investing in RE as an asset class, but don't want a job in it, invest in syndication. You won't have to potential upside of owning a business, but you get more downside risk protection.

@Brandon Smeltzer That logic makes sense to me and its obvious you know your market. You need to listen to what the market is telling you. BRRR is one method of REI, but not the only one. Its that tool in a tool box metaphor. If BRRR doesn't work in your area at this time either change areas, wait until it works, or change methods. I'd rather have my money parked on the sideline loosing value due to inflation than shoehorn myself into a deal just because its the hot method on BP.

For new methods, try getting into off market deals through direct mail or driving for dollars. 

Maybe BRRR would work in another area by you, like @David Zheng suggested. 

Its also not sacrilegious to wait until the market changes. Save up capital until you can deploy it in a manner that suites your goals.