All Forum Posts by: Caleb Heimsoth

@Jovann Thompson yes it’s very difficult and honestly there are a lot of better investments then buying rentals long distance. You will likely lose money long term with this strategy.

@Russ Wahl did you open credit cards and these lines of credits while the initial refinance was underway? If so, that’s the problem. You can’t open new lines of credit until the loan has closed. This has been the case with every bank I’ve ever dealt with

@Sam Sala where are you located? I’ve owned turnkey properties in memphis. Your returns will be better in the stock market and you will have way less headache.

Buying turnkey is overpaying significantly. It will appraise but you won’t be able to sell for that same price.

@Tia Wilson this is common problem for VA and FHA loans because appraisal standards are more strict. Easiest way is to overcome this is switch the loan type. If you cannot do that, you will always be at a disadvantage in a multiple offer situation.

You could always offer over asking but you need to be confident it’ll appraise if you do that.

@Craig Dieterich you say it was rehabbed, does that include the roof and plumbing and all that? When was it built? For example, your roof goes out, that’ll cost you 5k. That’s around 6 months of rent.

What if your tenant leaves? It’ll cost you 2k or more to rerent it. That’s 2-3 months rent. Anything major eats up months of rent because your rent is so low.

@Craig Dieterich how much over appraisal value are we talking here?

My cheapest ever property I paid 25k for and it too was a duplex, that rented for 820 a month (total), so very similar to you.

What I learned and what you’ll learn too, is maintenance will kill you. It’ll eat all your rent. You’ll still cash flow some, but the return doesn’t justify the risk, given these are in bad areas. Mine was in a terrible area. I sold a year later for 38k (with no rehab) and had no major maintenance issues while I owned it, so my total return was quite good.

If you own this long term I am fairly confident in saying you’ll make no money, because you’re a long distance owner, and managing these types of properties is best left to locals

@Gil Keren 1200 a year could be to low or to high. You’ll almost always repaint when a tenant leaves, so however often that is. Flooring may need to be replaced after 5-7 years too

@Jan Styrczula you will likely never see that money again. This sounds like it was done incorrectly from the start

@Aj Parikh. Where did you buy exactly? What are the numbers? Anything around 1 percent rule will be hard to cash flow long term. Turnovers will be expensive, so even if you have one every 2 years it’s going to be hard to cash flow. Really need tenants who almost never leave which is a hard model to hit

@Kristyn Grimes I did not, and I did not ask. The location of the tree was near the property line and the property was in a neighborhood of rentals, meaning the actual owner didn’t live there. The tree being near the property line would make it easy to argue over without getting a survey done, which isn’t worth it, due to how cheap it was for me to remove it.