All Forum Posts by: Andy Webb

 During rehab we like to tie the vent fan into the light switch for the bathroom so that it always comes on while the room is in use.  Otherwise some people just do not operate the fan.

 We have been at it for a dozen years now and have used hard money on most of our properties.  My wife quit her corporate job a decade ago and got bored, so went back to work part time for a hard money lender.  I am happy to discuss the process and advantages to using hard money - just holler.

Andy

Sounds like you are doing it right - same thing we tend to buy, the ugly stuff.  We are also looking in the East Texas area (around the I20 and I30 corridors and down towards Athens) for single family and small multifamily.  We spend a lot of time out in Canton where we have some family.  Feel free to connect.

Andy

Keep it simple and calculate equity as Market Value minus Principal.  I suppose you may have some accrued interest in the middle of the month, but it would be too much effort to constantly factor that in.  Once you pay that mortgage each month, the accrued interest goes to zero for that month in essence.

I just did a cash out refinance on a rental house using a DSCR product, literally closed yesterday, so 15 days of interest was due on top of the principal. But it is relatively negligible in the scheme of things, so I am not sure why you would worry about it. I suppose on some massive apartments it might be a different consideration, but even then I would not build any systems to calculate the interest mid month for purposes of determining equity/net worth.

Not sure those books will get into the TX specifics, like lock types required, how to handle a security deposit, safe harbor when charging late fees, required lease disclosures, etc.  I can't think of a TX-specific book or site off the top of my head at the moment.  I usually reach out to my network if I have questions.

Not the most exciting read, but you could check out the Texas Property Code for Residential Tenancies:  https://statutes.capitol.texas.gov/Docs/PR/htm/PR.92.htm

And understanding your lease in detail will go a long way to helping you as well - most new landlords really don't.

Or if you have the time, find some landlord networking groups in your area.  There are a few groups that post here or on Meetup.com.

Andy

@Lily Wang - in this "Free Stuff" case, I was onsite (happened to be 3 miles from my home, so easy enough) - I don't normally do any of the actual rehab work, so was probably just puttering around.  Literally put a sign in the yard that said "Free Stuff" or similar, with an arrow.  With the junk guys I just meet them there, does not usually take them long to sort out what they want, but usually cuts my load significantly.  If you have someone that will be doing any sort of prep work or demo ahead of the rehab, perhaps they could be onsite for you if needed.

In other cases, I have reached out to Salvation Army - they will take clothes in decent shape and furniture as well - I have moved a lot of couches and such that way.  I just set the stuff in the driveway and let them know it is there.

Depending on the condition of the junk, you might open it up to the neighborhood.  We bought one a few years ago that was just a lot of stuff, knee-high, but not a ton of dirty trash, so I just put a sign in the yard saying something like "Free stuff".  Random people hauled off a ridiculous amount of the junk for us.  We also usually call one of our area junker/metal guys and they will take a lot of metal stuff for free. 

Curious:  what kind of property and what kind of lender (you said bank, I know...).  If it is a rehab house with a hard money loan, they won't care.  Assuming your scope of work is in line with needed repairs, etc.

Is there something major in the report that could be an issue?

@Jason Sung - most of the leads we review are ultimately from wholesalers, and you are correct, very few of them make any sense. I am seeing more activity on the MLS now compared to a few years ago, especially outside of DFW proper. Nevertheless, cash flow remains thin due to high mortgage rates, high property taxes, an high insurance rates at the moment.

We are also looking out of state where the taxes and insurance are less onerous.

One highlight with respect to property taxes in Texas, if you do buy a rehab property.  If it is a rehab property, you should be getting it at a discount...be sure to protest your taxes down to your purchase price.  A constitutional amendment recently passed in TX that puts a cap in place for non-homestead properties (used to only be in place for homesteads), capping possible annual increases, I believe at 20%. So if you protest your value to $100k this year, it can only go up to $120k next year.  They plan to run this for 3 years and could extend after that.  What this means: you can lower your tax burden by purchasing a distressed asset, protesting the value down, and then will not have to worry about it jumping 80%, 90%, 100% again the following year...should put a little more cash flow back in your pocket for a longer period of time.

Andy