All Forum Posts by: Doug N.

Hi Karyn - 

Sorry to hear about your troubles. 

I am wondering why the tenant has a hand in this - ie sending you emails about what the HWC wants and thinks. Did she pay for the warranty?

It also sounds like no one is calling the shots here - you may want to get a local and trusted handyman (ie lower billing rate, etc) to cast an eye over the situation, and then call in the plumber at $TooMuch/hr. You are the boss here. 

If the plumbing is 'running slow' but not creating habitability issues, then you have a choice to make - listen to the tenant and make her happy for all the non-essential issues, or not!

You may also want to ask the plumber for photos of the 'hairline crack' (cough) and also ask how this crack is affecting the utility of the commode (ie is it leaking). Likely it's not, and you are (probably) being taken advantage of... sorry to say this, as you seem nice and trusting and all. There's more here... how could the scoped main line be clogged in 12 months? Sounds suspiciously like a 'make work' diagnosis. 

Please don't get me wrong - I don't want to come across as pessimistic, and you have likely done everything you know how to do, but when viewed from the other side (plumbers and HWC companies), this looks like an easy day's billing. Confuse and conquer, I believe it's called - sometimes it helps to look at a situation very, very squinty-eyed. 

Best of luck, and do keep us informed!

 Mathhew - That's a great way to deconstruct this!

The monthly loss is engraved in stone. 

The equity gain is speculative (and should not be in any serious analysis).

The resale amount is unknown to anyone.

Would you advise your sweet grandmother to invest her pension in this scenario?

If not her, then why you?

PS: Edit: I was thinking of appreciation, not equity, in stating it's speculative. My mistake. However, equity is also not a given, as a) you are flowing negatively each month, and b) your appraisal is not your own. 

It looks like this gent has years of experience - in rehab. 

Sorry to hear of your misfortune. It's only after something like this happened to me that I began to tighten up on subs - ie really looking hard at references and only paying when satisfactory work is completed.

These types of experiences make it so much easier to be a hardass, esp if you're naturally nice to people all the time and take everyone's word at face value. Not that one needs to be a difficult and unpleasant person to subs, but just super protective of one's investments. If you care a lot, they will often follow your lead.

Matthew - 

If this deal is going against your thinking, I have to ask the (obvious?) question:

Why are you thinking about it?

And it's @Ned Carey for the critical thinking takedown! 

I really should not enjoy this quite so much. lol. 

Jack - 

In this example, you are picking a period that includes many market fluctuations - ie a few recessions, etc. (Not to mention a house in a perfectly aggregate area that matches the Case Shiller overall index). If you move the goalposts a little on either end, your 3% can easily double or triple - or halve. Point being, it's easy (too easy?) to manipulate statistics to conform to any general given hypothesis. To get a realistic apples-to-apples comparison - and to see how very difficult this hindsight exercise is in real life - compare a 30 year stock basket to your RE example. Yes, that's a great question you're about to ask - which group of stocks shall we include? 

you wrote: 100K invested in an index fund that earns 10% a year

10%, year after year, for 30 years? Sign me up!

Srsly, pm me that fund!

Best regards!

@Account ClosedIntroverts can prospect leads very well (data, design & copy for targeted mailings, etc) imo, up until it comes time to chat with the seller(s). At that point, an extrovert will have a natural advantage in a lot of ways - warming up the sellers, restarting stalled discussions, re-focusing the conversation to more productive tracks, re-framing issues to highlight benefits, drawing out seller needs and a lot more. 

I am of the opinion that anyone can become an extrovert given the right incentives, and cash is a powerful behavioral motivator. Once you get that dopamine dump, you will probably look at conversations with strangers in an entirely new light - ie it will be pleasurable for you, and you will pursue it with great enthusiasm. This does not mean you will be awesome right out of the gate, though - there may (will) be some structural issues with your interactions that need polishing (interaction ebb and flow, timing, eye contact, phrasing, intonation, color and more). This can be fixed (over time) with practice, and I can't stress this enough. Get out there and practice on the unsuspecting masses - baristas, RE agents at open houses, sales folks of all kinds, and even your friendly neighborhood tweakers - they love to talk to anyone! 

PM me if you'd like. PS: I like your profile - it sounds like you are pretty self-aware, and could probably nail this in a few months. Best of luck and keep us posted!

I was reading the other day about how PE firms are foreclosing very aggressively bc it's a better play to repo and re-sell than to conduct a workout. It was interesting. 

Housing advocates and lawyers for borrowers contend that the private equity firms and hedge funds are too quick to push homes into foreclosure and are even less helpful than the banks had been in negotiating loan modifications with borrowers. Federal and state lawmakers are taking up the issue, questioning why federal agencies are selling loans at a discount of as much as 30 percent to such firms.

One company has emerged as a lightning rod, criticized by housing advocates and lawyers for borrowers, but admired by investors: Lone Star Funds, a $60 billion private equity firm founded in 1995 by John Grayken. In just a few years, Lone Star’s mortgage servicing firm, Caliber Home Loans, has grown from a bit player to a major force in the market for distressed mortgages.

An examination by The New York Times of housing data and court filings, as well as interviews with borrowers, lawyers and housing advocates, revealed a pattern of complaints that Lone Star was quick to begin foreclosure proceedings, whether the firm had bought a delinquent mortgage at a federal auction or directly from a bank.

Take Charles and Pamela Hubbard of Sacramento. They briefly lost their home when Lone Star’s Caliber subsidiary dealt harshly with their request for a loan modification. The couple said they had submitted the application to reduce their monthly mortgage payments four days before a planned foreclosure sale, but the Lone Star subsidiary said the Hubbards had been late in completing the application and pushed ahead with the sale. 

As Banks Retreat, Private Equity Rushes to Buy Troubled Home Mortgages (nytimes, Sept 28, 2015)

http://www.nytimes.com/2015/09/29/business/dealbook/as-banks-retreat-private-equity-rushes-to-buy-troubled-home-mortgages.html

Foreclosure Abuses, Revisited (nytimes, Oct 6, 2015)

http://www.nytimes.com/2015/10/06/opinion/foreclosure-abuses-revisited.html?_r=0

@Terry Cobbs Thanks for posting!

First thing I would do is buy a condo for that cigar. Or at least a carport. 

Secondly, 35k is not a lot for investing, unless it's leveraged or part of a larger pot of funds. Can you pull a loan against your new house, or get cash in other ways? 

But 35k will launch a nice long-term wholesaling operation. You are close to Austin, so you will likely have no problem finding investors. Start networking, start educating yourself, call @Michael Quarels and tell him you want to get some mailers out. You can make great cash doing this, and then use that cash to fund your future ops. 

Keep us posted!

 Cynthia - that is so right! And so difficult at first, but ultimately a great freedom, as you put it so well! You should post more - you're a good writer with some good experiences to transfer... Best of luck!