All Forum Posts by: Andrew Dial

Seller was not willing to fix any issues or work with us so we have walked away from the deal.  I appreciate all the help. I am back on the hunt

The home inspector found termite damage that appears to have not been treated. The inspector said it was concerning enough the he recommended a contractor look at it.   The windows or the original from 1980 and do not stay open.  There is a water line leak and the water line coming into the house is automotive rubber hose.   Also the front sidewalk needs redone. It is very uneven which would be a tripping hazard

The seller still cannot produce any paperwork on current tenants. 

I appreciate everyone's input.   I do not believe the government is directly paying for rent.  I think they are judt on social security/ disability.     So far we are short on information I feel like. I am going to have them fill out an application and rent history as well as request a bank statement to prove income.  Then we will no more atleast.   But if it doesn't look good I wont close until they are out. Thanks again everyone 

I understand about not attracting the best renters.  My mom and dad had a single wide trailer they rented and oh man do we have stories.   We had an open house and had 26 people come look at it. Half the people said it was way nicer than where they were living now. 
 This is a rural area so I know $51K might sound like a dump but its a decent house in a decent neighborhood. You can buy 2 bedroom houses for $40k around here.  I looked at some single family homes that were converted to multi family and those really attract interesting people.  Those rent for $400-$600 per family.  

51,500 purchase

20 year mortgage that the bank keeps on their books. 4.5% that adjust every 5 years.  

putting 20% down

$1780 property tax

$528 per year insurance 

figuring 5% maintenance 5% capx and 8% vacancy

After buying I will have $18k reserve in my personal savings

My friend has a 2 bedroom 1 bath he gets $700 out of.    My mom and dad had a 1971 single wide trailer just down the road they got $400 out of.  We looked at another 3 bed 1 bath that was renting at $750.   There was another 3 bed (unsure # of bath)  I called about that was asking $900 per month. 

I think I could get $750 out of this house easy if I painted and put in new flooring. 

Houses in Effingham under $100k go quick. The housing market has been hot around here for years.  My first  personal house I bought in 2012 for $75k, put 15K in it and sold it in 2017 for $116k in 1 day. 

Sellers realtor said they called the renters and now they want to stay because they cannot find anything else.   My realtor said we should see how the inspection goes Monday. If the inspection is ok then we will deal with the renters.   If they cannot prove ability to pay then I would hold off closing until they vacate.  

As far as my business plan, I am not necessarily targeting section 8.  They are there already and in theory their income should be consistent. 

I appreciate the replies so far.  As of reserves, we have enough money to repair and float mortgage (less than $300 per month)  

My wife of 6 years stayes home with our kids. I am wanting to get into real estate to supplement my w2 income.  Currently starting with single family homes. 

My name is Andrew Dial.  From Effingham Illinois.  I sell promotional advertising for our family business. I have a 2 year old son and a 10 month old daughter.   I am in the process of buying my first rental.  Look forward to being here! 

First time poster and investment real estate buyer!   I am 30 years old with 2 kids and my wife stays at home.  Decided to get into rental real estate to supplement my advertising sales job.   Located in Effingham IL

Looked a few house and made offers but were rejected. I am thankful I found the bigger pockets calculator otherwise I would have overpaid for one of them.  $-0.42 a month cash flow would have not been good.  

We made an offer on a house and after some counters we were agreed on 51500. Current owner paid $55k in 2013 and put a roof and HVAC in it. He has multiple poorly managed rentals which is why he is selling at a loss. It is 3 bedroom, 1 bath, 900 square foot ranch house. Worst looking house in the neighborhood so plenty of forced appreciation possible. Minor stuff like a dead tree in the yard, 1980s carpet, walls need painted, 2 broke down cars in the driveway. Loan is approved, waiting on the inspection and appraisal. I have already opened a business checking account and I have a meeting with a lawyer about an LLC and drafting a lease. No closing date has been set.

Anyway MLS listing noted renters wanted to stay in the house. Selling realtor said they had been renting it for years and the amount of clutter suggested they have been there a while. House was clean and odor free despite the pets. I was told they paid on time, $650 a month, and were on government aid so the money flow was reliable. It is an elderly lady, her 2 adult sons, 3 cats and a dog. One son is mentally handicap and the other is just a bumn as far as I can tell. No one can produce a lease though. Land lord said they are month to month and rent says they have a lease until the end of October.

I went to the house yesterday to take pictures for insurance and I introduced myself. The mother informed me she only makes $750 a month and they do not plan to stay. They said the house is not worth$650 a month (which I think is incorrect)  and they cannot afford it.  After knowing this information now the selling realtor is not actually sure how long they have been there. Years of on time payment has now become "im not sure"  and the renter says they have only lived there less than a year.   Both realtors are telling me the renters are lying about not being able to afford the house.  I have asked for proof of on time payment otherwise they must vacate before closing.  I am worried 3 adults and 4 pets will never find another place to live for under $650 a month.  

The house was attractive because it would be instant cash flow. If they move out it probably needs $2500 worth of paint and carpet and some yard work to get rent-able which isn't the end of the world. 

I realize I have already made some mistakes already by not verifying what I was told by the realtors. I guess I was being too trustworthy.  What would every suggest I do moving forward to avoid having to do an eviction or getting burned right from the get go?