All Forum Posts by: Tim Czarkowski

I had prowled around the forums for about a year before posting, once I started investing full time. I figured my 101st post would be as good as my 1st post to introduce myself. lol I have read a number of other forums but most were not even close to as professional as this site. I got that "guru" feeling from a lot of them if you know what I mean. Just a little shady.

I am a full time investor doing both flips and rentals. I have been interested in real estate for a long time and read every book in the library in college about it and still read voraciously. It took me about 7 years from the time I started my research till I actually made my first purchase. At this point, I am glad I waited. I nearly purchased a duplex when I was in college but I couldn't figure out why nothing seemed like it would cashflow. I know now that the market was overinflated. My first purchase was a 4 unit building where my wife and I live in the main house. I went full time 2 years after that first purchase.

This year was my first year full time. I purchase properties at the county foreclosure auctions, rehab and sell them off, mostly to other landlords. I completed 4 this year and am of course hoping to ramp it up this coming year. I'd like to build to one month. I'd probably get there faster if I stopped buying rentals for awhile but right now is such a good time to buy in my opinion, I can't avoid it. My current goal is to continue to add one a year.

In addition the the flips I have built from 4 rental units to 9 this year and am at the point where I can now pay my bills from those. That has always been a major goal of mine so maybe I will be able to comfortably put more into the flipping business now. I also manage some rentals for other landlords and would like to continue to expand that. I haven't really set a goal for that but would like to build it to the point that it could pay my bills also.

In addition to that I also have my real estate license to sell my own properties, pull comps, and work with other investors. I'd of course like to build up some more clientele in this business also. I'd like to build up to a 2 million dollar volume a year business.

Right now I get busy every now and then but could certainly take on more business. I have one person right now who works almost full time for me doing repairs and showing apartments every now and then. I'd like to be able to get an assistant by the end of next year also. Another goal of mine. Hopefully I'll need one.

I appreciate all the help I have received here and hope to give some of it back. It's truly a great resource and a place to network.

Most things can be made to look simple from the outside but when you dig into it you realize that it is really not so simple. On the other hand I know people who regularly try to make things more complicated then they really are.

The idea is
1. Market for motivated seller
2. Put under contract
3. Market to cash buyers
4. Close deal

It looks simpler and easier than it is. The fact is that each of these steps has a lot that goes into them and not everything works in all areas all the time. Trying to find deals at 65% of ARV - Repairs is not easy. There are plenty of people who will take a lower margin because they are the end user. If you can find the deals you can find the buyers. It entails a lot of market knowledge as others have said. You need to know the end value of the property and have an accurate cost for rehab. This is where most people screw up because it is not easy. You need to have real accurate knowledge of what a rehab costs. The best way I know to do that is to have experience handling rehabs. Which if your just starting out your not likely to have.

Certainly don't let all this stop you but realize that you need to do some legwork to be able to calculate values correctly. You need to look at hundreds of homes to be able to quickly and accurately get a value.

I think as you get older it is more important to have your home paid off. The rational is the same as switching more stocks to bonds as you get older, you have a lower risk profile because you don't have the time to make it up. Personally I plan to pay my 30 year fixed rate loan until it is paid off and leave it that way. Interest rates are low, I am young, and my returns are much better than 3.75%.

The big advantage here in Florida is that there is no limit on your homestead exemption here so it is a form of bankruptcy protection to have your home paid off. There is a reason so many millionaires and billionaires purchase outrageously expensive homes here in cash and then make it their residence. Besides the beautiful beaches and zero income taxes of course lol. OJ Simpson actually used that, he had a 10 million dollar or so home, went bankrupt after he lost the civil case, and was able to sell the home afterwards and the money was protected. Pensions are also protected, such as from the NFL. Funding you own pension is another form of bankruptcy protection that a business owner can take advantage of.

Also Donald Trump has a 100 million dollar home on Jupiter Island for the same reason, he has had several business go bankrupt and nearly bankrupt. Only the rich can go bankrupt and still remain very wealthy. lol

Debbie Farmer They use www.gosection8.com but no one actually uses it. If you go down to the section 8 office they have another list you can put your rentals on and at least here that is the one that most landlords and tenants use. At least that is what I was told by another landlord. The only section 8 tenant I have came with the building at purchase.

Mike Osterman There are limits on how many people you have to allow into a rental based on the number of bedrooms. It may be different in California but here at least I believe the formula is 2 people to a bedroom plus 1. So a 1/1 could have 3 people a 2/1 could have 5 people. Anymore than that and you do not have to allow it. You might check and see if there is something similar in California. I can't remember where I read that, I think it may have been in my license class or possibly a landlord book I read a while back.

I agree I would either purchase another unit if it increases cashflow or go after the PMI.

Scott J. I completely agree if I can borrow money at 0.9% and invest it at 25%, that's a pretty nice spread. That's one of the main tenets of rentals; borrow long term with fixed rate loans invested into an asset with a higher return. As long as you are conservative with your estimates and reserves you will do much better over the long term. Some people like Dave Ramsey seem to be dead set against debt and I can understand their viewpoint to.

My Dad was complaining about my grandmother not wanting him to refinance his house even though it was a lower rate. I had to remind him that her mother went through the Great Depression and that obviously had an effect on how conservative she is. "Black Swans" occur much more often then they statistically should.

I used to have them mail them or drop them off at my house but as I have expanded we now use a PO Box at the local UPS store. They will actually allow the tenant to come in and drop off their rent. I pick them up some times from the lower income rentals because several of them like to pay in cash. I think I'm going to start forcing them to also mail a certified check or money order. I never had a problem with unexpected visits when they were mailing or dropping to my home.

However the main reason I have switched to a PO Box and put my properties into an LLC with the PO Box as the address was because of a property I was flipping. I had a previous owner who I had to evict who then trashed the property and then attacked me the next day while I was on the phone with my insurance company. The attack happened while the police were inside the condo writing their report! After that I was worried for a while the guy may show up at my house. I didn't even need to go to the eviction but it was my first time, so I wanted the experience. I'll probably let my contractor handle it from now on. lol That way not only will they not have my address but they won't know who I am.

Steve Cantano No doubt lol

Steve Babiak Thanks that was exactly what I was looking for, a reasonable way to cross reference it and make sure I have the right person.

Here in Florida there is no limit on the size deposit that you can require. As I said though no one has taken me up on the offer. It certainly doesn't guarantee good behavior but if the rent is $500 and I have one months rent in deposit that is not even close to covering the cost of an eviction and lost rent. Two or three moths worth of deposit will though and I would think the person would be at least less likely to just move out or require an eviction. If they have a previous eviction it's certainly more likely that they will again. I'd really rather not rent to someone with previous evictions but if I do at least I'll have a little more protection. It's all just theory at this point until someone takes me up on the offer. lol

So the court will be able to cross reference it for me? I can understand why that information is not posted online but I guess they have it with their files usually?

I understand John and Jane Doe are often listed in case they have someone else living with them. That's not what I meant, I was just saying someone with a very common name, let's say John Smith or Mary Adams or something along those lines.

This is a lower income rental so most of the people do have bad credit and I generally don't worry about that too much. My main concern is that they have a steady and verifiable income. If they have an eviction though it shows not only will they stiff their landlord but they'll stay until the sheriff is there. I much prefer if someone can't pay for whatever reason that they simply move out without having to go through the eviction process. It has worked out so far, I haven't had a eviction yet, and I'd like to try to keep it that way. We don't allow anyone with a recent eviction and anyone with a past eviction has to put 2x-3x the rent for a deposit. Surprisingly no one has taken me up on the offer. lol I think they probably just keep hunting till them find someone who doesn't check at all. I just think evictions are a much worse sign then poor credit which seems so common these days unfortunately.

Thanks for the help.

Here in Jacksonville we have a online record search that let's you pull the county eviction records. Unfortunately when someone has a common name I often get hundreds of records and multiple evictions with no way to tell if it is my applicant or another John Q Public. I looked at a couple tenant check services but they look like they use the same records I am using now so they don't appear to be too helpful. How can I confirm whether these eviction are for my applicant or not? There must be some way to cross check it with their SSN or birthday.