Notes From The September 2015 Boston Investors’ Networking Event

Thanks to everyone who attended on Wednesday night. It was great to see familiar faces, and a lot of new ones as well! We had a ton of questions during the Q&A segment which was awesome! So much great information flowing.

• How can you avoid paying capital gains when selling an investment property?
  • 1031 exchange – need to use a registered intermediary to coordinate and maintain the funds.
  • Installment sale – sell the property over the course of several years to spread your capital gains over several years.

• I own a 3-family with a good amount of equity, how do I use that equity to buy my next property?
  • Use an equity line of credit in conjunction with a bank loan or hard money loan.

• Is a listing agent responsible if there is an issue with the title on a property?
  • No, the seller is responsible and generally has a certain period of time to deliver a clear and marketable title.
  • Seller or Buyer can back out if title takes too long or costs too much to clear.

• Has anyone had success obtaining city property/land? How do you make contact with them?
  • Most cities have a process ie. auction. Speak with the treasury department or community development. Some cities will require developing the property a certain way.
  • Face to face interaction is generally the best way to create a good business relationship with the city.

• How do you find properties in receivership & how do you buy them? How do you go about this?
  • You can sign up online or talk to someone in community development at the city/town hall.
  • Approach receiver directly if you want to purchase a property under receivership.

• Which skip trace services do people use?
  • TLO – requires you to have a company and will conduct an inspection of your office. It costs $1/search. They will deny service if being used for marketing purposes. You only pay for leads that come back solid.
  • Micro Built – monthly fee
  • Peoplefinder.net
  • Search for free via PIPL, MLS, Registry of Deeds, Treasury Dept, masscourts.org to search for probates, Google person’s name and “obituary”.

• Has anyone had experience with a 203K loan for a rehab?
  • You need to use a general contractor who is 203K certified.
  • Many contractors don’t like this because they are paid in arrears in installments.

• Do people have suggestions or advice when buying and living in a multi-family? How do you screen for tenants?
  • To find tenants, list an Open House date with a 2 hour window to generate competition and potentially get higher than asking price (in hot markets like Boston)
  • Some positives and negatives to telling tenants you are the owner – mainly dealing with more complaints from tenants, but they also may treat the property with better care if they know the landlord is in-house.
  • Don’t use a standard lease, be sure to put your specific rules in the lease.
  • Call references, and pull credit report (www.mrlandlord.com). Credit report will have all previous addresses (even ones that may not be listed as references on the application). Use Mass Courts to double check eviction.
  • Some investors use an agent to help screen tenants, some use craigslist.
  • Use 1st time homebuyers loan to put 5% down, you don’t want PMI.
  • Owning a multi is a good opportunity to build your contractor list for future deals.

• Tips on hiring a GC?
  • Word of mouth, ask other real estate investors
  • Be sure to ask for licenses, insurance and references. Always have contractors sign a contract and lien waiver.
  • Call references to ask about contractor and ask for their address. Then call the town hall to make sure the contractor was the person who actually pulled the permit.
  • Most GC’s usually specialize in one thing (typically carpentry) and then sub out the other trades. Contractor will need a CSL in order to pull permits.
  • If you have the time, there are benefits to managing the project yourself. If not, it makes sense to use a GC as project manager.
  • Either way, it’s a good idea to use a project manager on your first deal to learn the scheduling timeline.

• What do I do with a stack of door hangers I got for free?
  • Do not open anyone’s mailbox – Federal offense.
  • There were different opinions on how frequently to contact the same owners. Some people said to hang them on every house, and some suggested only the distressed properties.

• When Driving for Dollars, can you walk around the property?
  • Entering the house or stepping onto the property is considered trespassing – use your best judgement.