All Forum Posts by: Andre P.

My Short answer- find an attorney who can draw something up.

Off to top of my head (and I've done something like this) I would structure it with your own LLC, identify the specific properties that you own, and have a management agreement in place. Over time, purchase more w/ your LLC and have them added to your management agreement. That may not be the best way to do it, but at least one way to approach it.

I wouldn't do a profit sharing model so much as you clearly own your properties, they own theirs, and you each make $$ on your holdings. I feel like splitting profits can become more difficult if you have a difference of option with repairs or upgrades that are/aren't done and how they are paid for, etc.

My $.02 but perhaps smarter people than me have a better idea.

Just a few thoughts...

Where are you getting your rental amount? 

You don't account for any closing costs, is there a reason why?

I think your interest rate is low, but have you talked w/ a lender to see what they would give you?

I think your repair & capex numbers are low- I would plan 10% for each.

I think there's probably something going on that you and I aren't aware of, this property has been for sale since July, and had multiple price cuts w/ no sale.

Can you do it? Yes

As a first time home buyer? You can't get first time homebuyer credits unless you plan to live there. But it can be your first purchase.

You need to be extra careful on everything, if you're not there in person you need a trusted person to be your eyes and ears.

If this is going to be your first every real estate purchase I would be extremely cautious doing it from afar.

That's a question only you can answer... are you going to buy all cash? Are you just looking for a down payment with a mortgage? How much rehab are you prepared to do?

Then you need to start asking what are the current prices similar properties that you're looking to get in to and what contractors will charge for the work you're looking to do.

The dollar amount is a function of your market, not a set figure that's the same for everyone.

It's hard to give much advice without some numbers, but what you're proposing can certainly be done. My only question would be if you have the money for a rehab on your primary residence, why not just use that to buy a second property? The amount of money required to add a bedroom plus other items is probably pretty significant and could be most if not all of a down payment.

As a former police officer the advice given here is correct. As a landlord you have no reason to interject yourself- all it does is open you up to more issues than it will solve.

Encourage your tenants to call the police next time they hear something, they can remain anonymous if they wish.

It's usually done as a percentage of your rent payment, and would probably depend based on having an inspection done.

In general people set aside 10% of gross rent for management, 5-10% (or even more) for routine maintenance, and the same amount for CapEx unless you know something needs to be replaced sooner.

Provided the renovations on this house were done completely and correctly I would use between 5-7% for repairs and maintenance.

Another vote for Cozy, simple, and free for a landlord. One time setup for the tenant then everything is automatic. It eliminates all the issues with other apps, checks "lost in the mail" and will report to the credit bureaus if they are late/default. 

Given those numbers in my opinion there's no deal to be had, after transaction costs, etc I could see an offer of somewhere between 100-110 making it profitable, but you're basically breaking even given the numbers you've listed.  This may be better for a sale on the retail market.

Help you with what exactly?

As an investor you need to know the numbers regarding ownership and at what purchase price it is or isn't a good investment. It doesn't (or shouldn't) matter what the property was bought for last time since maybe the current owner overpaid or made a lot of improvements or let the whole place fall in to disrepair.

Find out what market rents are, plan for your expenses and see what you would be able to offer.