All Forum Posts by: Ron Averill

@Neil Schoepp  You are right that emotions have to be removed from the equation. But there is more to it than just the numbers. Many investors have bought based on good numbers, only to find out later that the deal was not as good as they thought. Many posts address this previous experience and the many reasons why it happens. In this post I'm trying to tease out experiences on the other side of the buying decision.

@Chris K. I'm still relatively new to REI, and I am a natural born over-analyzer. I try to check this trait at the door every time I evaluate a property. So far, I have not lost one due to this, but I almost expect it to happen to me some day.

@Joe Villeneuve  That's a good answer and a great philosophy. But realizing later that you missed out on a great deal must have affected your decision making process in some way on future deals. What lessons can you teach the rest of us from this experience?

There are lots of stories about buyer's remorse, but have you ever regretted NOT buying a property?

If so, what caused you not to buy the property in the first place? And what did you realize later that made you regret not pulling the trigger?

Most importantly, how did this experience shape your future decision making process?

Yes. The properties are in East Lansing. 

@Bill Gulley   Wow. Thanks Bill. It will take me a little while to digest all of these great suggestions. I might need some of your back pain meds to get there. Hope you recover quickly. 

The seller realizes that the current value of the properties is less than he owes. Currently, the only urgency on either side is to agree to a deal that makes sense to both parties. This will give the seller peace of mind, which I deduce is his main goal.

I'm currently in negotiations for an off-market deal involving four houses. These will be buy-and-hold properties. The seller is retiring from the business. The total selling price will be below the total of the current mortgages on the properties, so the seller will have to bring money to the closing.

I would like to find a creative financing approach that would (1) help the seller to bring less money to the table or to spread out this cost, and (2) delay my need for conventional mortgage(s) until I complete the rehab work. 

Is this a good candidate for a wrap? I don't have any experience with creative financing, but I've read some impressive concepts here on BP, so I'm hoping someone will have ideas for this situation.

Suggestions?

We started using Williampaid.com a few months ago. It was very easy to implement, and our tenants love it. So far so good. 

It is free to the landlord and free to the tenant as long as they use the ACH option. There are small fees to the tenant for choosing other payment options, but we like that the other payment options are available.

2013: Read about 10 books on real estate investing, spent a lot of time on BP and got our finances in order. We are new to REI and I tend to over-plan. But this keeps me out of trouble most of the time.

2014: Our plan this year was to start building our real estate portfolio with at least two rental properties. The strategy is to buy-and-hold forever, or until circumstances change. We actually closed on four separate properties from three different sellers in June -- three duplexes and one SFH. It's a long story how this happened all at once. Might make a good blog post in the future. It was a hectic month, but so far so good with all four properties. Now I want to buy one or two more this year, but my wife is reigning me in just a bit. She keeps me out of trouble the rest of the time.

I recently bought a duplex in which the stairs to the basement are accessed from the kitchen, which is already a bit small. This layout is very inefficient and inconvenient. I plan to reverse the stairs so that the basement is accessed from a door in the living room / hall way. This will allow me to increase the useable space in the kitchen and improve the access to the basement. 

My situation and house layout may be very different than yours, but in general I would not sacrifice kitchen space or functionality by setting stairs there.

I also own properties in a college town. There are a few companies that own the majority of the student rental properties, and they are able to set the market values for rent. I try to set my rents just a bit below theirs, for similar properties in the same neighborhood, so that no one can legitimately say my rents are out of line. 

If your rents are substantially lower than what other landlords charge in your neighborhood, then you might be creating discontent among their tenants, or at least making it difficult for them to justify a further increase in rents. I've noticed recently that rents are increasing in several college towns, sometimes to unbelievable levels. I wonder if these rates are sustainable.