a few lessons learned doing real estate in 2015
- Technology
- Redfin.com Mobile app is AWESOME. Better than MLS Search Alerts from Realtors
- Sherwin Williams has an App... to match colors and find ideas
- Evernote.com has been great for capturing IDEAS for home improvement ideas
- Amazing how quick you can move on properties with Docusign
- You can deposit checks by taking a picture of the check/uploading via wells fargo app.
- Sean Otoole/www.propertyradar.com provided the best presentation of the year at a club meeting I went to. Great guy/Great Company... and willing to help out the little guy anytime.
- Discovered that you can have a broker showup and BID at the courthouse steps on your behalf... Discovered that a bunch of people who look borderline homeless can have 1M of cashiers checks in their beatup looking leather folder
- Realtors
- You don't need a realtor to put offers and buy a property (just a good escrow company)
- Haven't met a realtor yet who really understands "Bigger Pockets Style investing" so.. I just gave up on that... and life is much better now... but I do squeeze them for info that they do know.
- Set up showings with the Listing Agent directly (even if you might be working with an agent) I Had a few really good opportunities come my way by acting interested to the listing agent... and not putting an offer down... and then waiting.
- my realtor informed me I could do put an offer with 2 options to the seller 1) all cash offer for X price OR 2) convention loan offer for Y price
- Fixing up stuff
- Youtube is simply amazing... (much, much better than any Home Depot clinic)
- pebble tile shower floor project cost about 200 bucks and came out great
- Craigslist FREE section had some free cabinets - and then I used Rustoleum Cabinet resurfacing (about $100 bucks)
- Home Depot sometimes has amazing clearance prices on 'engineered hardwood/tile'...(I got a great deal at one store and confirmed the other store in the area also had it on clearance to insure I had enough quantity)
- Referrals were the best way to find handymen/contractors. I had good success initially showing all the possible projects I wanted to get done... and then getting a price for the initial project. $30/hr is VERY reasonable - consider that this is effectively $50 an hour since they probably aren't paying taxes on this.
- Leasing
- Some property management companies can find you a tenant only then you do the lease and vice versa...
- NOLO provides WORD Documents you can use for Leases and stuff
- Buy a house after 1978 and you don't need to worry about LEAD Disclosure crap
- Financial Stuff
- My Accountant informed me that I can Depreciate properties and save money on taxes, but that I would have to recapture the depreciation expense once I sell.
- I can live in a property for 2 years (out of 5) and sell it TAX FREE!!! I can live in 2 properties consecutively and sell them at the same time (year 4) and both are tax free.
- Created a Seperate checking account for property #2. It was much, much easier to just do this over the phone with Wells Fargo than in person.
- Chase/ WF make it very easy to move money between accounts if you both have an account at the same bank. Educating the tenant on how to do this was worth it!
- the biggest benefit of real estate if having someone else pay your mortgage over 15-30 years.... easy to get tripped up on other minor stuff
- I would have rathered to pay cash... on a deal.. and then refinance later... Lenders have all sorts of hidden costs/fees..
- You need to live in the property for 1 year if you want an owner occupy loan.
- Overall
- A 1-4 Multi-family property counts as 1 property (towards your 4-8 allowed by lenders)
- The BS/phone calls/Paperwork associated with all the little details in Real Estate drastically lowers ROI (assuming you value your time)
- Dig your well before you need it with Lenders (amazing the time/level of detail they need)... Have 2 lenders ready to go.. so they don't think of playing games with you
- 4 paid off properties bringing in $3600/month is a VERY ATTAINABLE GOAL.
- Purchasing a very beatup property initially has been very beneficial.. as I've gotten to understand how hard/easy certain improvement projects are...
- Bidding at the courthouse steps
Comments