All Forum Posts by: Chris Calabrese

Christina, for homes obviously within CP is the best, but the north area (Berwyn Heights, Hollywood, etc.) has a lot of student rentals. Also the Metzerott Rd/Adelphi Rd area, College Park Woods, etc. I'm sure you could go into Greenbelt/Beltsville/Laurel/Silver Spring too, but more for non-students. As you know there are TONS of government contractors running around those parts, making a lot of money but unable to settle down and buy.

Hi Christina, welcome to BP. I lived in Laurel for 5 years after going to College Park. Still own a condo there in fact. $300/month isn't much, but over a few months it should get you a good supply of bandit signs and fund a few direct mailings. There's always craigslist and "driving for dollars". Tons of good threads here on all of these. And of course, network, network, network.

For your long term goal, I would definitely try to find a way to acquire some student rentals in College Park. I know a few guys who became pretty wealthy doing just that. With 40,000+ students, there will always be a shortage of housing.

The paint looks great, nice neutral color but still enough contrast with the trim.

Not to be negative, but how old is that roof? There seem to be a lot of shingles lifting up and it appears to be close to needing replacement. Personally, I would leave the cracked driveway and re-shingle with architectural shingles. But maybe it's better than it looks in the picture.

I think the most important aspect is the exit strategy. Even though this is a buy and hold, a lot can change in a couple of years, and you will most likely have different long-term financial goals. What happens when one member relocates, gets married, or loses his day job and wants to sell?

Also, don't forget that it will be harder to obtain financing once the property is in an LLC.

Before getting too deep, I tell people that "I usually pay around $XXXX for similar homes in your area. If that's too low, I won't waste more of your time." If they think it's in the ballpark, then I set up a time to actually see the property and make a more accurate offer. I'm also a realtor, so I give them the option of listing their home for retail price.

I have a couple who are on auto-pay with their banks, and the others mail me checks. I provide them with 12 self-addressed stamped envelopes when they sign their lease.

With the MLS and easy deals drying up, we started going to the courthouse sales again this month and almost everything that doesn't go back to the bank is being bought by a company called American Homes 4 Rent, based in Malibu, CA. They have homes in all the big cities, and must be expanding. They have bought over 60 homes here in the last couple of months, and this is a relatively small market (~600,000 metro area). I just saw that they're filing for an IPO, so I'm sure they're trying to deploy as much capital as possible. Around here, they are only bidding on newer homes (2005 or later) and they are even buying off the MLS at close to retail price. The landscape has definitely changed quickly, I know I wasn't really prepared for it.

Hey Mike, born and raised in Avon here. Living in SC now, but nice to see an Avon investor. What areas are you targeting?

Others have hit on the main points here. Private money gives you a lot more flexibility than a mortgage. You may pay a higher rate, but be able to move quicker, and your offers are more likely to be accepted. Banks will lend on investment properties, but they are not really set up for short term deals. As the market is getting more competitive, it's more important than ever to have someone with cash that can fund your projects.

Will and J are right. With short sales, the closing date is pretty meaningless because the banks will take their sweet time regardless. With a lot of REO's they will have a standard time in the contract, like 30 days for HUD, etc.

We always avoid these type of profit splits with the "money men". Your brother is effectively just loaning you the money, so why not take out a private mortgage and pay him a fixed percent return? You can offer to pay him the same amount a hard money lender would charge, maybe with fewer points, to "keep it in the family".

It should be easy to sell him on it. With the fixed return, he would actually make more money the longer the project takes. With a profit share, he will make less money the longer it is invested, as your holding costs will eat into the profit. As long as he is loaning you well less than ARV (<70%), there is very little risk on his part as long as you guys know what you're doing.