All Forum Posts by: Carl Millsap

@Marilin Matos If they've had the building a year and there was storm damage they can file an insurance claim for the roof. Depending on the policy they would only have to pay the deductible to have the roof replaced which is a win / win. They don't have to give you a credit for the roof, and you have a new roof.

@Amelia Brinker I'd offer $20k on the property and see what the counter is. I've purchased 2 HUD properties. The first was listed at $65k, I offered $30k ended up purchasing for $43k. The second was listed for $49K, I offered $25k 3 times because the property sat on the market; I ended up w/ a contract price for $33k but had to cover the real estate agent commission so actual price was $36k. All they can do is say no or counter the offer.

How old is your home? Is there any capital expenditure items (HVAC, Roof) that will need repair / replacement in the next 3-5 years? The $100 per month (Rent potential - mortgage) is a good start if you plan to manage the property yourself. Is it possible to get more rent for the property to increase your profit?

I would turn it into a rental and manage myself. The tax write-off / depreciation schedule and cashflow (save the $100 for maintenance issues) would be enough for me to get started unless......

You can sell for the $215k and take the profit to buy another investment that would give you a better cashflow i.e. a duplex.

If you don't ask you won't get....If they renovated the house they should have caught the issues i.e. electric / plumbing. I agree each is a minor fix and can be done by most handymen for a few hundred plus supplies (at least in my market). 

I would ask for a $25k roof allowance or ask them to replace the roof now. Depending on how long they've had the property they can submit a claim and pay the deductible which I imagine is a lot less than $20-$25K. This way you get a new rook and they get more $ at closing. 

Our policy is like most. If the plumber pulls something out of the toilet that the tenant did it's on them. What is the complaint? It might be worth the investment to have a camera run down the line to see if there's an issue. One service call vs. multiples for what might be a non-issue. 

@Bill Anton in my humble opinion your numbers should work for both. When you refi does that property still cash flow? Will the new property cash flow once rented? 

Look at each property as it's own business, can it pay for itself? Now if both properties provide a good cashflow and you're putting money back for maintenance etc. then go for it. 

@Scott V. Alpha Romeo 4C? I was looking at that as one of my next purchases. My next purchase will be a R8, Lotus Evora, Supra or Corvette Grandsport. Trust me I understand the pull towards buying a toy. 

Now, having a few years on you and being a business owner (health club) and real estate investor (22 units with 2 purchases in the pipeline) I would recommend you delay the purchase and invest that money. 

I'm sure you know the time value of money, and while life is short what is your long term goal? How long do you want to trade time for money? 

Invest the money now, and let those investments free you from the day to day grind so that you can enjoy the drives more. And trust me if you're going to start your own practice you'll need that money.