All Forum Posts by: Bryan O.

There are many ways to be involved in real estate and make your money work for you. None of what you mentioned involved wholesale. There are 2 basic ways to use your money like you are asking:

Money lending (you'll hear hard money and hand money mentioned): you lend your money to someone who, let's say, needs the downpayment paid and you charge them interest over a short period. For example, you lend enough for their downpayment for 6 months at 10% interest.

Equity partner: you provide x amount of funding to the project for x% of equity. You are providing capital and they are providing expertise.

Hit the books and start to learn about everything you can! There are a million ways to be involved. Pick what fits your dreams, then get intimate with it!

Be VERY careful here, the Garn–St Germain Depository Institutions Act of 1982 is what allows you to place the deed into a trust, but it does not allow you to use that to transfer it to an LLC: "...the borrower is and remains a beneficiary and which does not relate to a transfer of rights of occupancy in the property..."

Please make sure to check with an attorney before you consider doing this.

Why are you reading this?! Evict the tenant, and fire the manager! I'd also look into getting the manager to pay a portion of the delinquency due to failure to provide adequate service (look into your contract first).

I use Postlets, but have heard good of PadLister. I'm moving away from Craigslist because of the quality of tenants, and I rent in less than great neighborhoods!

I manage my own properties. I don't charge an application fee because I live practically next door. If I had to spend my time and money to drive over, not be productive, then listen to someone whine that the carpet isn't the same shade as the advertisement and try and reduce the rent, I would likely charge as well. I have my applicants that I want to offer the property to go online for the screening. It's $35, but I give them a discount code for $5. That money never shows up in my pocket; it goes straight to the screening company. Additionally, the credit check they run is a "soft" check, which doesn't impact your score.

Given the lack of understanding of the business evident in your post, I can only assume the property manager you spoke with wants you to take your business elsewhere. Ignorance is not bad, but refusing to educate yourself is. Let's play the math game you enjoyed since I just finished renting a property:

30 minutes per interested party that actually bothers to show up x15 people: 7hr 30min

15 minutes per interested party that didn't bother to show up x10 people: 2hr 30min

Income from fees: $0

Lost wages: 10hr x $25/hr = $250 (I actually make FAR more than that, but trying to be fair)

Let's assume that my 3 properties do this twice a year (the trend so far): -$250 x2 x3: $1,500/year loss

Let's say I don't screen and I get "that guy" that I trusted to tell me how amazing he was like you claim about yourself. I now have a potential for loss equal to the value of my home. Smart move? Not so much. As the landlord, the ONLY thing I know about you comes from a very quick first impression AND THE REPORT I GET FROM SCREENING. Back in the old day, you could trust a tenant with a handshake but now they lie about their credit, they lie about their ability to pay, they lie about their criminal background. Some of these things (state dependent) are not searchable by the public, or if so much be done in person. This is more expensive than $30.

It was an interesting rant and I had hoped to learn something from it. Unfortunately, it was full of little more than empty pixels. Speak from a position of knowledge rather than spite at no one wanting to rent to the squeaky wheel.

Just as with other investments you need to look at the numbers. If you can invest your money at 2.5% (paying off the car) is that a better investment than you can get from a cash-flowing property?

Most likely you will get much higher than 2.5% on an investment property, particularly given all I hear about Atlanta. Look at your potential property ROI, then compare that to your 2.5% loan rate. Go with the better one.

I agree with @Peter Maclennan. I just bought a 3-plex a month ago to owner-occupy under FHA. I ran all the numbers as if I did not live there, then decided if it was a good investment. We don't plan on living there long term (no more than 2 years).

I do like the idea @Elizabeth Colegrove put out there about renting a room within your unit. I have a family so it never occurred to me, but if you're buying a multi to owner occupy and renting a spare bedroom, that's like House-Hacking^2!

@Travis Sperr

Thanks for the thoughts. I'd love to have a chat. I'll send you a PM.

@Bill S.

Thank you for the advice. I'll start looking at how zoning works. Until I have a really solid grasp on all the ins and outs of building, I'd rather spend the time figuring out if it's worth it to build before I talk to the owners about selling. I wouldn't want to start negotiating with the owners before I know what numbers work for me to make the deal possible. It may be too low to even start the conversation with them and then I'd be wasting both our time.

New builds are new to me, so I like the mental exercise to see what kinds of numbers exist. Pretty exciting overall though. Thanks for the comments and keep them coming!

Hi all,

I just bought 3-unit a property in Colorado and owner-occupy one unit. I plan to add another 1-4 unit property this year. I can do basic remodeling, but not big stuff. None of my properties have needed major overhauls. As I was wandering the neighborhood, I noticed a very ugly house that wasn't kept up. It is abandoned. The floor in most places is missing and it looks like the stairs going up are gone (couldn't quite tell). The lot is huge, but the house on it is not very big. It is listed as Multi-Family with the assessor. The property records show a Public Trustee's Deed in 2008, followed a couple of months later by a Special Warranty Deed for $92,000. Properties in the neighborhood are $300-$400k.

I'm wondering if this a decent candidate to scrape and build a multi-family or nice SFR on. I've never looked into this depth of a project. What are some of the major considerations I should have in mind to determine if it is worth it? Are the lending options for a fresh build similar to buying a pre-built?

If a fresh build is a bad idea, what about renovation and expansion? If I double/triple the size of the property while keeping the old intact is that feasible?

Thanks in advance!

Bryan

@Jeff Meachen

In my head there is a difference between your "go and do stuff" team (contractors, REA, wholesalers, etc) and your "keep me safe" team (attorneys, CPA, etc). Your "keep me safe" team is more like your insurance policy. By the time you need them, it's very possibly too late. Deciding when to hire them is very much an exercise in finding how risk averse you are.

Maybe a football analogy with offense vs. defense works here?