All Forum Posts by: Vincent D.

Dee,

Find a niche which requires none of your own cash at any point in the process (wholesaling come to mind). Yes, talk to experience and always read, but don't delay action for too long or you'll be talking to "experts" and reading your way into paralysis. Learn enough to justify stepping out into the field, and let experience be your teacher from there forth. Your peer and mentor network, and RE literature options, should be an occasional supplement - not a crutch.

In any case, you'll have thereby established some confidence and savvy by scraping your knees a few times, and the foggy landscape will slowly reveal itself to you more lucidly as you continue to progress. In the meantime, be careful not to get bogged down by the chorus of expert opinion, often conflicting, from every self-appointed mentor on the topic. Find your own groove and settle in.

Soooo, in conclusion, I would state that "REI education" is best served on the street with your own two feet. This aspect should be weighted much more heavily than input from authors and opiners alike. Just don't jump in with a leverage-heavy paradigm - such is why I suggest wholesaling (or even bird dogging for a spell).

Godspeed!

lots there David. a couple spontaneous, reflexive thoughts and prompts for you:

what's the going rent for your inventory? is it enough to cover the underlying debt service (if not, your f-i-l handed you a grenade)?

what phone number is on your sign? if your celly, you might expect odd-hour calls and lots of tire kicking.

If the neighborhood is decent, you may consider hanging a lockbox on the front door and giving it to prospects who pass the "sniff test" over the phone, asking them to call with feedback when they leave and ensure that they replaced the key in the lockbox.

What will you use for lease doc? If you presently have nothing, you'll likely find one online to serve the purpose, or perhaps Office Max, etc.

MOST IMPORTANTLY, do not sway from demanding full first month rent up front AND matching security deposit. This is your best screening tool. I've had many tenants pass the full, expensive research screening process only to default after a couple months, and I've had unscreened tenants pay reliably for years. it's a crapshoot, but CASH UP FRONT is the best risk mitigant. Don't let someone talk you into staggered SD payments or any compromise of this all-important standard.

Let me know if you have any particular, specific questions as you drive further into the process.

Peace,

The best screening tool is MONEY! First month's rent and matching security deposit are a must. Couple this with a streamlined eviction plan and you're nearly bulletproof, without the hassle of trying to preclude "professional tenants" via paper research. The truly devious tenants will swap and share names and ssn's to beat the screen (of course, this is more likely to occur in certain geographical areas than others), but CASHOLA makes honest men out of liars.

Peace.

I'm not satisfied with bloated bureaucracies and their wasteful spending being subsidized by penalty to the people in one form or another. You speak of vigilance in terms of picking up a dead branch the moment it falls in your tenants yard, essentially. I see vigilance having a greater role in this scenario, such as turning our senses to a growing disease taking more and more dangerous ground in our lives and livelihoods.

I suppose we all see the world a bit differently. I'd RATHER they did not do EITHER, and I don't acquiesce that either burden is justifiable. If you are presented with a rotten apple, and you balk, then given a rotten banana and told to choose, would you be content that rotten fruit was being thrust upon you in the broader scenario? Not I. You seem content to give the govt ground on the slippery slope, strangely. If they hem you in, over time, with ever-broadened regulations, you'll end up wearing gov-issued underwear and feeling content to be compliant with the new underwear regulation b/c you're a law-abiding citizen.

As for speeding tickets, perhaps you might better see my point if I compare these overreaching H&H infractions to a citation for going 56mph in a 55 zone. Are you content with that?

exactly. what's more, i suspect the motive behind the onslaught has much more to do with economics than preservation of general health standards.

bloodsuckers!

brad,

she lived with these "pests" for three years while paying rent. it's obvious this tenant is using it now as a red herring to excuse early exit. Deduct unpaid rent and repair cost for siding and cut a check for the balance of the SD. I can't imagine a scenario or state that would leave you exposed for doing this. Your position is very strong.

Sarah,

I doubt the lender will reinstate the loan at this point. You may want to take a different angle altogether and offer to perform a short sale, if the realtor is not already doing this. However, unless you are yourself a Realtor, you will need one to list the property, a prerequisite for short sale applications at this day in age.

I think you may have a case of trying to marry the first guy you meet, so to speak. I think this deal has grown beyond sub-2 capacity. Legrand himself would caution about growing too attached to a potential deal and then trying to force it to work.

IMO, you should take a walk from this one.

John M.

Are you looking strictly for a rental strategy? Look for a good spot on the risk/return frontier. for instance, 22% gross ROI is much more attractive than 10%, and it would take a massive amount of risk to mitigate this gap. Plus, with 2 holdings to every one as opportunity cost, your risk is diversified with the "bad neighborhood". Also, if $100K is the "good neighborhood", then likely the $45K neighborhood is not all-out tenement ghetto, and has a strong risk-return dymanic, despite the relatively lessened aesthetic.

Your question is one that I had pondered and experimented with, by trial and error, for the first few years of my investing career. My holdings now center around houses with an all-in cost averaging $31K at over $700/mo gross rent. run the math on that. as importantly, this is NOT ghetto, and MOST of my 30+ houses perform on the lease for the first contract.

I've developed a very good paradigm for this program in particular. It seems to address your question directly, and with the empirical data to support my argument.