All Forum Posts by: Brian G.

@Gustavo Mendes not destroy but 3 years without maintenance and significant deterioration will show.

If you have a concrete roof, this is to be sealed (looks like paint but is not).

@Joe Fairless

 Not sure why the @ didn't work on my prior msg

@Joe FairlessI just hanged up with my attorney in Puerto Rico after gathering actual results on this (I hate to be misleading). The answer is yes.

Say, the purchase price of a property is $50k cash. The closing costs in Puerto Rico will be between $800 and $1300 depending on who pays (seller or buyer) for the preparation on the Deed of Purchase - usually .5%-1% of selling price. I got your message on my inbox. Let me get organized on my side before proceeding. Best Regards... 

@Joe Fairless it depends. At least for some REO's where the lender is not local the process is the same as US. For example, Puerto Rico has also an FHA program so if you go to HUD you will notice that the contracts are in english and offers are to be mailed to the US asset manager. Sometimes you get to pick your own closing agent in the US. Below is an instruction example from HomeTelos located in Tennessee for an active REO managed by them in Puerto Rico. For purchasing directly from sellers there is a local contract which is in spanish (2-3 pages).

Hi @Dennis Rodriguez

Thanks! To be honest with you I had my reservations about doing all this. Time, money and resources deployed in a place first perceived as "declining" - I totally hear you. I don't know about Mayaguez, Juncos or Dorado but this is what I know. Regardless of all the noise (bad economy, people leaving and unemployment, etc.) there are some things that will never disappear - families, babies and diapers. If per capita in Puerto Rico is around $20k per year (more or less) it will make sense to have rentals around $600 - $700 a month. $20k / 12 = $1600 income a month. Divided by 2.5  and they should be able to afford around $660 a month. That's rent... Now the house. Families (we know) prefers 3 beds, single home houses in good areas with a patio all day long. Now the area. Where are the jobs? Major employers and work force concentration? That will be metropolitan areas near malls, airports, hotels, hospitals, universities and near San Juan. Now the neighborhood. Is the area a ghetto? Drug activity? Can a family honestly live there? Now the price. If anybody can get in on a property as described say at $30k-$40k I would be interested on learning about it (just curious --- oh yeah).  

Is not for everyone and I could be wrong but the fury of qualified prospects blowing off my phone was real...

Regarding your uncle I will be curious where are the students going? They are staying somewhere for sure... where? How healthy is the registration at the campus? All the best to him because I know it will be difficult to unload at this moment. 

Hey @Victor Chico

@Justin Jocewicz

Here are some numbers...

Property purchased 15 years ago. It became a rental 6 years ago. This is a 3 bd/1ba single home. We purchased for $20k and assumed the loan of $12k. Original seller was distressed. The mortgage was paid-off shortly after. It rents for $650. Annual tax is around $1400 a year. At the moment I do not have insurance. The property is solid concrete all walls and roof. Windows are protected with window bars all around (see pics above). The place is a fortress. I figured the tenant is responsible for interiors and in case of fire minimal damage is expected. Tenant provides appliances (defined by the market).  Hurricane is not a concern as it is solid concrete. Yes, Im exposed but is very minimal - an earthquake will wipe me out though. Repairs? Well it depends. $6k last rehab after a 3 years rental. I neglected the property. Again, shame on me. When you look at the scope of work $3k went directly to repair the roof leaks (including labor). Leaves and dust obstructed water drainage. I literally had a pool as a roof. Water accumulation + hardcore sun = massive leaks. $1500 in annual repairs a year for is my goal (paint, misc). Attainable if you have boots on the ground doing periodic inspections which now I should be able to do. 

Hi @Account Closed. When it comes to the islands I have been keeping an eye on the top five. Puerto Rico, T&T, Barbados, Dominican Republic and Jamaica. Based on economic indicators Puerto Rico and Trinidad & Tobago seems to have the strongest indicators when compared to the the rest. T&T facing some inflation. See table below... 

Now, I dont have a clue how the real estate markets are at the other countries, but I stack their economic numbers against Puerto Rico's for my own guidance/reference. PR is not at the bottom of the barrel. 

For other projects, once I had my rental under control I decided to test the demand for tourist rentals - AirBnB, etc. I stayed at 4 different places in Condado and Old San Juan. These places all had between 90-99% occupancy. Those guys are making bank with the these apps. I just need to evaluate the right property and the appropriate resources for the business to make sense (access, cleaning, maintenance).  For now just doing homework, homework, homework. Will see. 

All the best 

We where faced with the challenge to rehab or not a property we own free and clear in Puerto Rico. I am originally from there... This is a class C+ neighborhood in the Carolina area near a regional hospital. The economy is lagging there and real estate is under pressure. Unemployment is rampant at 14%, population is eroding and banks are not approving loans. 

We had a tenant in place for 3 years that decided to move one. Since they never complained we never did any repairs (I know shame on me). For this reason I knew things were going to be - ugly. A decision needed to be made... Stop our Miami operation and go or not. The property was going to sit vacant so screw it - I flew in. And oh boy, this thing needed everything; severe water leaks on roof, major pressure washing, painting (inside/outside/ceilings), replace plumbing, electrical, appliances, landscaping was a joke, etc. etc. I estimated around $9k to bring it alive. This project was too much for me or even 2 people. I needed a 4-5 people crew! Pronto... I felt defeated.

But I learned from my local intense South Florida market (and here in BP) that if you want to stay relevant you have to go out there, fight the noise, and get the business. So for 2 full days I knocked on doors and asked around if anyone knew of reliable people that could help me. Two full days went by and nothing. Then a good friend of mine raised his hand and said "yes, I have a crew. they will be there at 8am ready to go"... The next morning they were there. Outstanding work these gentlemen did. They took care of everything. The property was ready and with the "For rent" sign in 5-days. Total spent $6k. I have it all in a spreadsheet with local prices and labor cost.  

To my surprise the property received 25 calls, 12 appointments and 4 offers in just 3 weeks. It literally flew off the market. My underwritting was intense: good credit, clean criminal records and solid income. I was floored with the amount of veterans and federal assistance recipients that are shopping around in Puerto Rico for rentals (good quality families). Banks are not approving and these people just don't care to purchase a property at the moment.

This crew is now doing all the maintenance so no need to go back to handle Tenants, Toilets or Trash... Before leaving I stopped by La Placita (hangout social spot near San Juan) and met with an old high school friend. I shared my story and he said hit me up I didn't know you were investing - I am a portfolio lender! I almost felt off my chair... You're probably thinking exactly what I am thinking after this encounter ;-) 😊

Economic conditions are not the best down there now but make no mistake, the island is not going to disappear much less it will be abandoned completely... People will need a place to live. Lessons learned: 1) do not neglect your long distance properties, 2) constant networking is paramount. People do change careers. Some become portfolio lenders. 3) don't be afraid to hit the pavement and knock on doors. 4) where there is a contraction in a market thrust your gut, be calculated and expand into the market. 5) repeat 1 through 4 and purchase another property. Pics below. Saludos

Painting...

Pressure cleaning...

Roofing and leak repairs...

Interior walls and ceilings painted...

House rented...

Onced I was on the same situation. Agents playing games here and there. I had to search deep inside my core as an individual as to why I was getting involved in RE. I was convinced that financial freedom to provide to my family and parents was the main reason. I always looked at top investors and wondered, how they did it? Is this really attainable? But one thing I noticed among all top investors was the ability to be resilient-persistent. So I went to work. Agent wanted to play games with my offers, fine I doubled down and found two other agents. If I detected any "games" I doubled down again and found four agents, and double down again and again. It will get to the point where yes your offers will get submitted and accepted. It is a numbers game where you must be in full control of your financial freedom as originally planned.

I own condos and townhouses in South Florida. Looking at the comments above there are no right or wrong answers. Whats important is to take action and stop all these inner stories, the doubts and the second guessings. HOA's are no different than single family homes that could need a roof replacement, an unknow code violation due to structural/electrical/plumbing issues or a drug dealer that moves accross the street after you acquire the property. Some due diligence I do before acquiring a condo is what I've observed underwriters due before approving their loans. Long laundry list but it can be done - easy to google. I also own single family homes to mitigate and diversify my portfolio. On condos, if HOA management plays difficult then I start to show up in their meetings. Get to know presidents and vice presidens and shake hands before judging. At the end, if they are impossible to deal with I dump the condo and move on. What matters is to take action if you want to become that "beast investor"...