All Forum Posts by: Alexandre Marques dos Santos

@Max Kibler

The deal seems nice. I would consider it. He is asking 1k less it means 12 k in one year. And you are making mtm more than that. I would counteroffer.

Why not having it for 430 ( cover his debt) and charges only 600/ mo? That way you almost run no rental risk ( like he paid on advance). Also figure out how much to be deposited.

@M Shah

Will Gaston just wrote a forum. Try to reach out to him. I am an interested investor and i am looking at PA area

@Kody Robertson

Not experienced on this type of deal, but i will five my thoughts.

Is the investor partner or he is lending you money?

Being a partner i would open an LLC and put in paper who has what. Then expenses will hit there and having all booked properly, will be easier to fill tax returns down the road.

Also, i would have check going directly to title. Avoiding have possible questioning of money coming to your account, and leaving. You dont want to have your account flagged... even having a good explanation for it.

If the money is a loan, make a contract and then you can receive in your account.

Good luck

@Jose De La Macorra

I would counteroffer. Find a smaller house, cheaper, and rent out to him for “taxes/insurance”. Buy the house paying installments of 1200,00.

This way its a clean purchase. You have control of the asset. A house is an incredible asset IF properly maintained. The way the guy proposes seems to be a great deal... but if he does not take care, it will depreciate. Termites, roof, and many other issues could arise... then it wont have the value of 180-200 you assume now.

@Vince Espiritu

You need to have reserves. Not necessarily cash reserves.

If you have access to a HELOC ( or any line of credit) you can use that if needed.

But if you are acquiring a property with negative cash flow, then cash reserves becomes more important.

Also i do not like to use x months of rent. It depends very much of the state of the property and the monthly income. A 100 yrs old property might demand more reserves than a brand new one.

Good luck

@John Kernen

By the description of your acquisition it seems you speeded up. The absence of experience should advocate for a slower pace.

RE is fascinating but there are certain aspects we learn with exposure. Reserves, unknown, are part of our routine. 1% rule is NOT a rule, but a guidance.

Your situation does not seems to be a dead end. You need to evaluate if you can keep portfolio and if its profitable despite of cash flow. A one time capex expenditure should not dictate your future. But now you need to understand if you can face any adversity, and if not , put a property for sale. One bad asset cannot contaminate your whole portfolio.

Take the lesson. You NEED to carry reserves as the unpredictable will knock at your door anytime.

@Deisy P.

Dont let that drive you down. Everywhere you look, you will find people that will try to take advantage of you.

As an example i quoted to paint my house. 3 years ago i have the job done for 8000. This time i play I did not know about it and got a referral. The guy came and was very nice, asked me what i do, ( i never mentioned i invest in RE), then he sent me the estimate... $49k. Yes, 49 thousand dollars. I laugh.

What i would do in your position is to find a nice property management. If you dont want to go on this pattern, then i would do 2-3 quotes per job. By the time you will start to know better and get used to the numbers.

Good luck

@Anthony Simboli

Not sure if someone proposed this. But i saw you were very aggressive ( waive inspection!!! Crazy)

So you are the one who knows yourself better. You know you will get credit to buy the house? If so, to face the competition you could give a higher EM and tell buyer he can keep it if you dont buy the house due to credit. That will give the seller comfort you will close.

@Victor Tatyanin

Dont want to sound critic, but how did u buy the house at first, without knowing your numbers? Did the broker give you the wrong number?

In Texas i have houses that are paying 3,3%, and number still works.

To help reduce the noise and maintenance i put a deductible in maintenance call. Its amazing how much it helps saving... tenant now think 2 x if he is going to call or do himself ( before i even had tenant calling to clean a clog drain on tube).

If need maintenance, you at least got some $ to help paying... and tenant becomes more liable to maintain the house

@Justin Rea

I would recommend NOT buy those high end electronics. Tenants usually dont take a good care. I have whirlpool and works well.

Usually bought at Home Depot and got nice discount, and installation.