All Forum Posts by: Aron D.

REI is a long game and since you own a cleaning company look for tired property owners that don't want to keep the home anymore. Some might offer owner financing with a healthy down or no down payment depending on their situation. I have yet to secure owner financing, but always trying to find it. The other consideration is that some may make it look like real estate doesn't involve money or substantial savings. If a major system like HVAC, roof, plumbing, or electrical needs repaired, then it will require substantial capital for repairs. Search out multi family properties that cash flow and could obtain owner financing (unicorn), but you may find it. Another consideration is that you may fix your credit and be able to obtain a new home, but if you don't have the income or savings to cover repairs, then it can become a nightmare.

Not trying to discourage you, but real estate has been the most stressful and most fulfilling hobby in my life.  If you enjoy your job and company that you built then try to scale it and also consider moving to a higher demand area for your services or like another poster mentioned get in the trades (electrician, roof, plumber, etc.). Good luck with your journey and the first step towards your goals.

Work your numbers backwards from ARV. Use the 70% ARV minus rehab and then factor in 10% for closing and realtor fees. You should be able to build your margin into the deal. If the numbers don’t work, then it isn’t a deal.

Fannie is up to 10, but they get more difficult higher you get with more fees and more reserve requirements. Hook up with Chris Mason or an experienced lender. A 1-4 unit property is still one property. Run quickly from your inexperienced Quicken lender.

I bought a duplex in 2008.  The market was tanking and still didn't bottom out.  We had to put 20% down and still had to pay out of pocket for new roof, termite damage, upgrade electrical panels, wiring, stucco repair and new fence.  I get more letters from investors on my duplex than my condo properties.  I wish I would have bought more of them as hopefully the area starts to gentrify.  Like others have stated, you might have to look at more of a commute in order to find a deal.  Good luck in your search. 

Not sure of your market and prices for Quartz countertops, but here in CA you can find that Quartz is actually cheaper than granite.  Some granite prefab might be cheaper, but it is usually the brown/beige lower end finish.  You can get 9x2 slabs of Quartz for around $150-$200 and get someone to cut and install for you.  I've noticed that buyers don't really mind what solid surface countertop options you use as long as it is new and clean.   

I sold most of my flips to FHA. I don't mind the extra hurdles and wait time. Most of the situations require I provide a large buyer credit to close the deal. I look at it as money I didn't have before the transaction. It does make me wonder how people buy FHA if they can't come up with 5% down conventional. Hopefully they make their payments or you get another swing at the property. I think the 2 appraisals are required if your sale price is double your initial purchase (bought for $100k and selling for $200k, etc.).

Not sure how Jay finds the time in the day to share his experiences, but I appreciate all of the knowledge gained from his insights.  He helped me in a situation similar to this, but it was a lower class property in PA and a note investment program gone bad.  I had to put $20k just to get it rent ready and pay back taxes.  I just hate to see other out of state investors getting the wrong end of the stick.  Like someone in another post mentioned, "out of state investing is where CA equity goes to die." 

If I were you and had enough money to file a judgment, then I would do it just to make the people who did this become accountable for their actions.  I would have collections tie this to their credit report until resolved.  You may never collect, but if you let them slide, then it will be the responsibility of the new landlord that decides to screen them.  It is a benefit to the whole community to keep these types of people out of our homes.  Hope insurance or something comes through for you and thanks for sharing your experience.   

Originally posted by :

Probably I will rehab it and sell it. 

 Good luck trying to sell.  I rehabbed mine and have it on the market for the past year with no offers.  It is easy to get in at low prices, but hard to get out.  My only options are to sell it to another investor and lose money, owner finance, or keep it rented.  I hate that I tried to chase the carrot trying to think investing in a real estate note would be easy and stress free, but I would rather take investing in my own backyard and controlling costs/screening tenants.  I am sure there are reputable operators that provide a good service to out of state investors, but more likely than not, they look out for their own interests.

Sounds like the PM is in the business of renovating rather than managing your properties.  They need to screen better and I prefer luxury vinyl plank flooring.  It may cost more initially than carpet, but they last longer and hold up to water better than laminate flooring.  I have more stress over the lower cost out of state rental than the ones that I manage locally in CA.  It is just much easier to schedule an annual or six month inspection and checkup on your tenants than what your property management team is probably doing in Indy (cashing checks).  They need to be conducting inspections and providing photos.  You never know if you are going to get hosed on the repairs unless you are local and can get bids to compare.  People make out of state investing seem like the magical unicorn of investing, but from my experience, it just caused more headaches and stress than just making it work locally. 

I flipped a mobile home as well. It exceeded my expectations. We originally bid on Auction.com for a mobile in CA. Auction.com actually called me to let me know that my bid was nowhere near the reserve that the bank authorized. I told them I couldn't sell it after it had been repaired for what they want as a reserve. After many attempts of the bank listing it for auction, my realtor got the listing from the bank. They initially wanted a high listing price, but after 2 weeks they dropped the price from $100k to $70k. I lowballed at $60k all cash and we met in the middle at $66k. We put $25k of work into the deal replacing flooring, adding extra kitchen cabinets etc. So we were all in at $91k and originally I thought to list it at $120k since that would be a quick turn and not sure of manufactured house flips. My agent listed it at $130k and after a month we got an offer for $130k and made a quick $26k profit. Only issues we dealt with was that the agent wrote up the offer on the 90th day instead of the 91st since it was an REO flip. It was resolved, but the lender took forever to close the deal.