All Forum Posts by: Tracey B.

Originally posted by "Tbone77":

I feel like I learned so much from this expensive lesson vs. anything I could have learned by spending money on a RE course. In my opinion, you feel and take to heart a real experience much more than you do someone's second or third-hand account of how things work.

So true! My very first property (our own home) lost me $55,000! At the time, we were devastated, but rather than give up, I took stock, and re-entered the market a lot wiser, and I've never lost a cent on a deal since. Losing money sure enhances the learning value of an experience. :wink:

Originally posted by "kenvest":

1. watching and believing "house porn" on TLC

You're not trying to tell me that they make it look easier than it really is, are you? Don't you just buy on day 1, reno days 2 and 3, and sell on day 4 for an outrageous profit? :dance:

Originally posted by "commercialre":

Use an airtight lease with all expenses passing to tenant.

Thanks for the tips. Is this (ie passing on expenses) legal for residential property in all states? If so, which expenses? ie Can you pass on any or all of property taxes, repairs, maintenance, HOA, insurance, etc?

(Excuse me if it's a naive question; passing on expenses is possible here in Australia for business premises, but strictly prohibited for residential leases.)

Thank you both for your feedback. I'll try and overcome my cultural reticence and put in a low-ball offer. :superman:

Thank you all for your warm welcome!

By far my biggest concern is the difficulty of managing properties from such a l-o-n-g distance. So after a bit more research and reflection, I'm now planning to target multi-family properties (>15 doors) with on-site management. I've found that with my local property (16 doors), installing an on-site manager has reduced management overhead from "very challenging" to "minimal", and I'm hoping I can pull off the same in the USA. :wink:

After more reading about Tarrant County, I'm still convinced that that's a good place to target. I'm particularly interested in Arlington. I can't wait to get on the ground, and translate my plan-view knowledge of the area (from hours poring over maps/satellite photos) into a 3-D perspective. 8)

I have a gas instant hot water service (which I think is the same thing you're talking about!) for my 16-door multi-family and it's been brilliant the year that I've had it so far. It provides exactly what it promises - instant hot water, in unlimited quantities, inexpensively (as it doesn't store any hot water). I'm very pleased with mine. 8) It hasn't had to be touched since it started operating.

Originally posted by "Licwidsand":

We have had more than 10 like this in the last 6 months. We do have over 500 REO's but wow, these guys are a-holes.

This disturbing scam recently appeared in Australia for the first time, too. You're right; these people are real scumbags. :cry:

I've identified a property of 10 duplexes that I'm considering purchasing. It is currently experiencing high vacancy levels (50% :shock:) and those units that are rented are at below market rents. My assessment is that the current landlord has lost interest in the investment and failed to maintain it, so it's looking very unloved. I believe with an inexpensive rehab it could do very well.

The initial asking price ($30K per door, $600K) represents a 10% cap rate if the property were fully occupied, and was let at the market rental after rehab. But as the current gross rental income on all units is only about 40% of the level which would give a 10% cap rate (50% occupancy at 80% market rental), I don't think it's worth near $600K. I think the deal stacks up at around $450K, so would probably only want to offer about $400K initially.

I am a property investor by profession, but I'm an Aussie, and this would be my first purchase in the USA. In Australia, if a property is listed at $600K, you wouldn't dream of offering less than, say, $550K. :blush: But the fact that you have properties selling for 50-80% of appraisal makes me wonder whether it's worth a shot. (That simply never happens in Australia; even a "fire sale" price usually gets at least 90% of appraisal.)

Would offering $400K be considered cheeky for a standard sale? By standard I mean that it's not (AFAIK) in pre-foreclosure or foreclosure, but I suspect it has been on the market a while, and the vendor obviously has lost interest in it and wants to sell, so I presume the vendor is quite motivated.

Is it customary if the vendor wants more to counter-offer? (ie come back and say "$400K is no good but I'd consider $480K", for example)

I'm just seeking advice about your negotiating customs; I don't want to get off-side with a major realtor in my chosen area with my first offer!

Originally posted by "gainesvillej":

It just screams tasteless.

Wow, that's unbelievable; how rude! :shock:

Originally posted by "Wheatie":

I had assumed SFR. Not quite as good as a duplex, since you have two tenants. Not quite up to the $100/unit goal. Not bad in my book, though. However, I strongly recommend you learn the area and the market before jumping in.

Cap rates and other commercial factors aren't used much for single families and even for duplexes.

I was simplifying things; there are actually 24 doors (12 duplexes) with on-site management and I'm considering buying the whole complex, and all dollars are proportionally much larger. The cash flow comes in at under $100 per door but I'm happy with any positive cash flow, allowing me to hold it for the long term whilst it appreciates (as my research suggests it will). I'm not relying on cash flow from my investments to live off; I have other sources of income.

I confess I've not heard of $/unit being used. Wheatie, if you had to invest $1M on 1 door and it was $100 cash flow positive per month, would that be the same to you as if you'd spent $100K on 1 door to get $100 per month? Or are you just thinking of a minimum absolute dollar figure that justifies your management effort?

If the latter, my costs already include payment for three :shock: layers of management (on site plus a property management company, plus a trusted local friend to keep an eye on the other two :wink:), and thus I'd hope to be relatively hands-off. Surely in such a situation the return on capital is more important than $ per door, no?

And yes, I plan to spend considerable time on the ground before plunging in!

Thanks so much for your helpful advice. 8)

Originally posted by "MikeOH":

Is this a SFH or a multi-unit building?

Multi-family (duplex).