All Forum Posts by: Anthony Dooley

There are distressed properties to purchase below market at all times. In this market, it is just harder to find. There is always someone who needs money more than the property, but these are not listed online with a broker. To find a good deal, you have to look off market. An investment property should be purchased well below market value and rented at market value.

You have the answer. Bill back to the tenants. This is still a convenience to the tenant because they don't have to go apply for gas and electric and pay deposits etc. Don't think of reasons not to buy the deal. Think of ways to make the deal work.

You should sell the empty house. You bought it at market price to live in, not as an investment. I would sell it and purchase an investment property at below market price. When you buy a property at market price and then try to rent it out at market price, there is no margin. You must buy it right in the beginning or else it doesn't cash flow.

It depends on several things. Your market, risk, cash flow goals, etc. I can probably buy at least two decent rentals in my area with $100K. With no mortgage, they will cash flow very well and produce $1600 gross per month. What is harder to find, but a faster way to build wealth, is to find a portfolio of existing rentals for sale. You will need 25% down, so you would be looking for a $400,000 deal of 6-8 houses in the portfolio. This increases your risk because of the debt, but also increases your holdings very quickly. I've done it both ways and either way works.

Generally, the tenant would become a month to month tenant. If they are good tenants and there are no changes to the existing agreement, a renewal is not necessary. I tell tenants that the lease protects them from sudden rent increases for the next year and it protects me because I can project them being there for at least 1 year. I'm sure you would rather keep a good tenant rather than kick them out and hope the next tenant will be better.

Nobody can tell you what to do without all of the information. Does it meet your criteria of a good deal? If not, offer them the price that meets your criteria. If yes, do it. It's not an emotional decision. The deal either makes sense to you or not. Can you lose money on this deal? That is what I ask myself.

The 3 most important considerations when buying real estate. 1.Location 2. Location and 3. Location. If the deal is good enough, you should be willing to pay 6% or 8% for financing. The difference of .5% interest is $500 per year per $100,000. This should not affect your decision to purchase the property. If it does, your deal isn't very good. In an owner finance situation, I normally pay 0% interest, but I am willing to pay a higher sales price in that scenario. Location, Sales price, cash flow, financing terms, potential value add, etc. If one factor is negative, the other factors can make up for it.

Nobody at Goldman can predict the future. Real estate is local. When the Fed increases rates to 6%, cold water will be thrown on this hot market.

 That's cool, but I have to disagree again. I think most people would agree with me that an additional $1,500 per month is not zero capital. I also think any lending institution would agree that zero debt to income makes you a less risky borrower. I'm not trying to be confrontational, but where I'm from $1,500 for 10 months looks like $15,000. This could be used to put down on another investment. To your success.

Matt Theriault has some fantastic information and techniques for this exact situation. Epic real estate investing on youtube or podcasts. He has free templates for letters of intent that can be used to write a contract once the seller agrees to the terms.