All Forum Posts by: Buddy LaRue

One thing I can say about the female investors I've worked with in the past....they were all much more aggressive in their business model than any of the men I've worked with. And as @JeanBolger pointed out, they have nicer shoes!

Welcome to the group! What part of E. Texas are you in? I recently moved to SoFla from Houston and have lived in Dallas as well.

To calculate your cash flow:

Take your monthly rent, subtract your monthly loan payment on the property, subtract 1/12 of your annual property taxes, subtract 1/12 of your annual insurance premium, subtract any HOA fees. The balance is your monthly cash flow.

Raising hand here! Love South Florida! I'm in West Palm Beach if anyone is interested in connecting and joining forces.

I've seen this a lot in South Florida, unfortunately.

I'd recommend that you not put appliances in the unit until closing. Give the buyer all the information on the appliances you will be putting in (including make and model numbers) so it can be put in the purchase contract (it will make your buyers feel better if they can put all the pertinent information in the contract) or offer a credit to the buyers if they wish to upgrade from there.

The security system is an added plus for you and your buyers. Even if it's an inexpensive system, it's another feature of the house that can be boasted. John is right, the police take forever to get to a house that's being burglarized, but the external blaring alarm will discourage anyone. Try to befriend at least one of the neighbors and get to the house quickly should the alarm go off so you can silence it. If at least one neighbor knows what's going on, when others complain when the alarm is going off, they will usually inform them that you are on your way. They will also be an extra pair of eyes keeping an eye on your property. Just don't give them the code (I've had one client do that).

Best of luck to you!

Sounds like discrimination based on national origin to me.

If you go to the Department of Justice's website, (http://www.justice.gov/crt/about/hce/housing_coverage.php#nat) you'll see that this type of discrimination is on the upswing. The Department states that they have taken action against private landlords who have discriminated against such individuals.

You may want to go back to them and explain your stance. This seems to be a case where being an investor serves the prospective tenant best.

As far as I'm concerned, it all boils down to the returns. You have to run the numbers to see where they land to determine if you should do the deal or not.

Especially when it comes to lower priced houses, I prefer a 100% return on capital gain and a minimum of a 10% cash on cash return. If I can get a property for that, I'll do it; keep the property for a year or two then sell it if it's in an area I don't like. At least I've made some money off the deal.

I didn't buy the deal, but I did represent the buyer of three houses in a development in Houston, TX for a total of $69,000. All three properties had been foreclosed on by the same bank; 2 of them were three bedroom, 2 bath properties built in 2007, and the third was a 4 bedroom, 2.5 bath house built in 2006. The four bedroom was pretty much rent ready (needed cleaning) and the other two needed a total of $40K in repair/make ready (construction was never fully finished). The buyer ended up renting the properties out at $950/month for the three bedrooms, and the four bedroom for $1,150/month.

No one knows your business better than you do. So on that note, I think it's a great idea to get your license. One caveat however, don't expect the licensing courses to teach you squat about real estate investing. I've been a licensed agent for over 15 years now, and am licensed in three states. None of the courses I've taken to obtain any of these licenses taught me anything about investing. It wasn't until I joined an investors group did I really learn how to invest (and saw what screw ups I did in my own investing). However, I have enjoyed my career and will continue to do so.

I don't mean to be nit-picky, but one does not get a "Realtor's license". One obtains either a real estate salesperson's license, or a broker's license. A Realtor is a member of the National Association of Realtors and is not a license.

Pros: You can search the MLS at any time, set up and change your criteria when you like and have the changes take place immediately instead of waiting for someone to call you back, you can read the "broker's only" remarks which don't show up on the reports agents give to their clients, you can make some extra money (assuming you don't plan to leave your current job and wish to work in real estate only part time) by taking on clients of your own, you can search for your own sales and rental comps, and you have plenty of networking opportunities with other agents.

Cons: It costs money to maintain a license. There's the pre-licensing courses, and in many states post licensing courses, followed by continuing education courses necessary to maintain the license. There's the board fees, MLS fees, lockbox access fees, and you will need to place your license with a brokerage who will charge you either a percentage of the commission (for beginning agents this can often be 30-50% of the commission on each deal) or a desk fee which may be a couple hundred dollars a month or more.

You mentioned cutting the cost of an agent to find a deal for you, so you may want to try looking at things this way.....check the costs of getting and maintaining a license for the first 4 years, including going to your local real estate association and asking about their fees, interviewing some local brokers to determine how much it will cost you each month to have your license with them and weigh that against how much an agent you hire may make in the same 4 years. Do you break even, or are you ahead?

For instance: To get a license in the state of Florida, there is a 63 hour pre-license course, followed by a 45 hour post license course that needs to be taken. The pre license course is $245.00 from one of the online schools, the 45 hour post license course is $125.00. Then there's an additional 14 hours needed after the first two year license term, the classes run about $99. The license fee is $105.00 for two years. 2014 Board fees (including MLS fees) is $679 per year. Lets say that does not increase over the four year period. So far we're up to $3,395 for four years of license and we haven't taken into consideration any desk fees yet. If you find a broker who will let you hang your license and pay only a desk fee of $100/month (which would be extremely low) your fees add up to another $4,800 over the four year term for a total of $8,195, or 3% of $273,166.67 in sales.

Since I don't know how active an investor you are, maybe by looking at the question like this will help your decision. Whichever way you choose, may it be the best decision for you and best of luck in your real estate investing!

Wow, you do have a rather unique situation.

I'm on the other coast of Florida, so I can't help much with Tampa area, but here are a few thoughts about the investing aspect.

Real Estate investing to become financially free takes time. Don't rush it or you'll end up buying bad deals. Analyze the properties carefully. My recommendation would be to find properties with a 100% return on capital gain (minimum) and a minimum of a 10% cash-on-cash return. I recommend this because you're building wealth at the same time you are building cash flow. Some invest only for the cash flow, I prefer the best of both worlds. These deals are not always easy to find, and you may have to analyze a large number of properties before you find one that makes sense. Don't get discouraged through the process, it WILL take time.

Build a team of people you can trust, and even when you trust them, always run your own numbers to check on everything. Though I am licensed and consider myself pretty good at what I do, I set up a series of checks for my clients so they know they're getting a good deal. I recommend that not only do they get every property inspected, but also get two or three repair/make ready bids on each property, at least a desk-top appraisal by an independent appraiser for the ARV (don't go just on what I say, pay the $100 to the appraiser to get another professional opinion on that ARV). Overall, double check EVERYTHING at every step through the process and get as much done as you can during your inspection period so you can back out of a deal and get your EM deposit back if needed, with the lease amount of hassles.

Don't rely on properties increasing in value (speculation). That got a lot of people into a lot of trouble when the market turned this last time. If you start working with an agent who says anything like "in a couple of years, it will be worth a ton more" RUN - DO NOT WALK- away from this person. They don't know how to work with an investor.

Be careful if/when you work with wholesalers. I've seen many wholesalers inflate after repair values to astronomical heights to entice a buyer. Some are reputable, but many are not. Stick with your checks and balances to ensure you are getting a good deal.

Leverage as much as you can. I'm not saying go for 100% financing, but do use other people's time, knowledge and money for as many deals as you can. Yes, it may cost you some money, but if the returns are high enough after the costs, it's worth it.

You mentioned the property you have in Ocala is in a 55+ community. My recommendation would be to not purchase in these communities (HOPA communities). You're restricting not only the pool of tenants for these properties, but also your exit strategy. If you don't have the property rented at $750/month, contact an agent in the Ocala area and ask them to run some rental comps for you (preferably in the same complex). There are usually only three reasons a unit goes vacant for any length of time: Cleanliness, condition, or price. Make sure the unit is clean, in great condition and priced appropriately for the area in which the property is located.

You are wise to stay close to your home base to look for properties. My thoughts have always been that your properties should be within a 1/2 hour drive from home or work. I have had some clients go further out, but if they're too far you'll not be happy when the toilets need fixing, or driving for 2 hours to show it to a prospective tenant.

Manage your own properties until you have at least 10 properties, then maybe consider hiring a property manager. If your properties are in excellent repair when you first rent them out, and you check everything between tenants you shouldn't have to do much other than collect your rent each month. Again this goes back to cleanliness, condition, and cost.

Once you have acquired enough in capital gains through your properties, you may want to look at multi-family properties (think 50 units, not 2,3, or 4) that you can reposition in the market...but that's a discussion for a later time.

I'm rambling on here, feel free to message me if you'd like and I'll be more than happy to respond.

Best of luck to you!