All Forum Posts by: Brian Pleshek

Welcome to BP, @Stephen Murray.  Yes the podcasts are great.  Since you have a business relationship with some investors, it might be a good idea to contact them and get their thoughts on things.  You already have a relationship with them, utilize it.  Look through all the books and the forums here and just read and research the topic.

Brian

I would second the point about a vacant contingency.  In my area a 1 year lease is automatically converted into a month-to-month lease if nothing is put in place following the expiration of the original lease.  He's been there 4 years.  Is he on month-to-month?  If not, you may not be able to get him out until the next lease period is up.  You could consider just continuing to rent it to the existing tenant.  If this is the case, a rehab may not even be necessary(until he moves) and this provides instant return without the expense of the rehab.  On the other hand, I don't know if the rent is market rate either.  Depending on HOW difficult the tenant is being, maybe having him as a tenant may be a poor idea too.  He may be just as obstinate when you're the owner.

Brian

Doesn't sound like a deal to me.  I'm in Ohio.  Is this seller finance?  71% down?  Do yourself a favor and do about 50 hours of reading on this site and others before you consider a deal.  Listen to the pod casts.  Education should be your focus right now.

Brian

I am a buy and hold investor in Cincinnati, Ohio.  I have no debts outside $35k on a mortgage on a rental.  My personal property is paid for.  Another rental is paid for.  Both were cash deals.  No cars, no credit cards, etc.  To manage risk you either have to have the cash reserves or have the income.  Whoever you borrow from to make your deal won't care that your tenant moved out.  And tenants will move out.  And they will leave your place trashed some times.  If you cannot afford to pay for it yourself either with personal cash flow or reserves, then you cannot afford a deal.  My personal risk tolerance won't allow it.  Now once you start having 3, 4, 5 or more properties, then it's possible that the cash flow from all of those might cover if one goes unrented.  But if you're one of these people who like to see $100/unit cashflow positive and you're dealing in duplexes, then you'll have to own a lot of properties to have the other ones cash flow the vacant one.  Personally, i'd like to have 3-6 months expenses per property in case of problems.  If you start having scores of properties, then you've got protection in numbers and can maybe cut back on that somewhat.

Brian

Absolutely not.  This person has shown he isn't good for it.  His 400 credit score says it.  If you, as a loan officer, would not loan him money because he's a bad risk, I wouldn't try to fix him.  He won't pay you either.

Brian

Welcome @Jason Wagner.  I understand that Texas is a good place to play, so I'd look where you are.  Just remember that you make your money when you buy your property.  So don't overpay.  And do plenty of learning.  Figure out what type of property you're thinking about and focus there.  Build up a team that includes contractors, accountants, lawyers, an agent and so on.  Immerse yourself in the stuff.  Listen to the pod casts.

Brian

I wouldn't think so since you're not selling anything.  However, check with your accountant.  If you're doing real estate, you should probably have one.  Taxes can get tricky.

Brian

Welcome to BP @Lisa Lanata. If you're looking at FHA, you'll probably have to live there. I think intent is what it's all about. You intend for this to be a rental, so it would be dishonest to buy it and tell them that you're going to live there knowing that you are going to move out in a couple of months. They will notice when the bills are going out to some place other than the property address. It's possible that they might call the loan due once you're no longer owner occupying. If you were talking a couple of years instead of a couple of months, you could probably do this.

If you don't have the funds to do a commercial loan, you may need to save a little more or maybe go in with another investor perhaps with an option to buy them out.

Brian

It depends on the renovations.  But I can tell you that Ohio gets different weather than Minnesota.  If you're talking about fixing driveways, roofs, and decks, then winter is uncomfortable at best.  And certain landscaping issues are hard to do in winter too.  But there are roofers that will work during the winter and you can put cement under a hood with a huge heater to cure it, but it isn't optimal.  But if you're talking about doing properties with interior work, then it really doesn't matter what time of year it is.

Brian

I have always found my own properties.  Now that I'm starting to go after more, I might start to use these guys.  I fully understand that they're there to make a buck finding me a lead and I have no qualms with them making something off their work.  But if a wholesaler brings me a deal based on criteria that I have previously given him is it rude/unprofessional/just not done to try to bargin with them over the selling price?  I ask here so that I don't look like a fool later if it's pretty much a vote up or down rather than a negotiation.  So what is standard practice?  I don't want to offend the guy and never get a call again if I am in the wrong on that.  I'd rather look like a newbie here than in front of the guy who I might be doing business with for a long time.

Thanks,

Brian