All Forum Posts by: Steve Shanes

Don't give up. I was looking for longer than a year without doing anything. Anything! Then suddenly market goes extremely high and I moved a bit outside of city and bought 4 new properties withing 6 or 8 months.

Hi,

Got this for you from the Santa Clara Superior Court
Self Service Center. Though you didn't say where you are from, these general rules are likely to be true. I'm not an attorney so it's hard to be sure but I feel this means something like "don't change a thing".

Anyway, I think nothing can go wrong if you attach a letter in simple words explaining this is a legal form you sent, and what you ask your teanants to do.

"
3-Day Notice to Pay Rent or Quit:

You can use this notice when the tenant is behind on the rent. You don’t have to fill out this notice as soon as the rent is overdue. A lot of tenants are sometimes late with rent.

Before you fill out this notice, contact the tenant. Find out if the rent is on its way. But, if you think the tenant won’t or can’t pay the rent, fill out the notice as soon as possible.

The notice:

Has to be in writing
Has to have the title "Three Day Notice to Pay Rent or Quit"
Has to say the name of the tenant
Has to say the address you’re talking about
Has to say exactly how much rent is overdue
Has to say why that much rent is due and the dates the rent was due
Has to give the tenant the chance to pay the rent or move out in 3 days
Has to say that if the tenant doesn’t pay in 3 days, they’ll forfeit the lease.
You have to sign and date the notice
Be very careful when you fill out the 3-Day Notice to Pay Rent or Quit.

The notice won’t be valid if you:

Don’t say how much money is due,
Ask for more money than what is due,
Ask for rent that was due more than 1 year ago,
Ask for something that’s not rent. This can be late charges, interest, utilities, property taxes, or damages,
Tell the tenant to "pay rent and quit" (instead of "pay rent or quit"), or
If you don’t let the tenant chose to forfeit the lease. This is called “election of forfeiture.”

" [end]

Check with an attorney as well!

Steve

It may also be good to have someone else to see the stuff. So he can testify as well (best is to take someone who looks stable and impressive) when it comes to the court.

What was the end?

Steve

It is good and very detailed.

However, I think sometimes it is good to have things set on a timeline. This way you can *see in real numbers* the amount of money (or lack of money...) are you going to have.

You can also plan more than one property this way.

Bizern1018,

You do need one. Not so much to impress others, rather than for your own understanding.

You need to be able to prepare a table, to show on a timeline which money goes where. And where it came from.

Draw at least the cash column, the loans and the property. This will give you a very decent idea for a start. And write down dates for everything.

You may also want to see some financial ratios. I'll be able to help you: write me if you need.

Keep it very simple: one goal (I think) is to understand the way money works in this investment. It has to be simple enough so that your friend, when asks you why you did it, will get a very well prepared answer.

Steve

What are the prices of such property in that area?

What is exactly the plan?

How much do you have as a downpayment?

What condition is the property now?

Did you look at any other properties at all? How did you find this one?

Hi,

Maybe I missed something - 150K + 218K sums to 368 which is not really enough for all closing costs etc.?
And what were the prices the previous time the market was high?

Steve

Well it sure sounds as if you are getting into something very risky with many unknown variables. Are you positive it's worth? I'd have said it's very likely that something (I don't know what) goes wrong with such a plan.

Jeff,

Personally, I'd rather distinguish (with rentals) like so, to create a method:

a. My policy: some parameters have to reach certain points before I buy.

b. My thumb rules: 2% is a bit higher but I've got mine, which I developed after a while and is still improving. The main thing about it is, let you determine if the property goes to step II - analaysing

c. Analysing - a complete analysis for the property that shows some scenarios, mainly the worse and exit strategies. Many times this varies a lot from what you have with the tumb rules. Analysis shows you what is your expected income, cashflow etc., but also shows you on a timeline at which point you are about to need a huge sudden amount of cash, and whether you've got it. It also shows you what's next.

d. Note: Important: your equations are correct but, most of the part of it are given! Of course, you can set cashflow = 0, but what does it mean, when the other parts are set by the market? So, you put everything in place and eventually get a couple of ratios. Then, you find the ones most important for you and check them. This is the right method.

e(and back to a - policy). What are these parameters? Depends on the scenario. Rental property usually what you are looking for is positive cashflow, of higher than X (personally, I'd rather include x in an early calculation and see if I got a positive value. This way I know I took everything into account, otherwise what's the meaning of this x?). You should also consider the following parameters as analysing basics: the return on invested capital ratio (it should be quite good, otherwise you could have invested elsewhere!), and the available financial resources left after considering the future plans.

Steve

Hi,

1. Try something conservative as a start.
2. Decide about the type of investment - best is a rent property for now, I think. With an option to sell.
3. Build a decent plan. Good analysis is essential.
4. Include in your plan sudden, unexpected expenses of sudden, unexpected $15,000. Is it still standing? (it should and can).

Need more help - I'd be able to post you some help about plan building.

Good lock