All Forum Posts by: Chin P.

@Amber Huang

Going to have to agree with the crowd.  I actually have a rental similar to Option 1, but that was purchased as a primary residence and not as an investment.  

It works well how I have it set up, but I would never buy it as an investor.  Feel free to PM me if you want some specifics on how it operates.  

I'm personally investing closer to Baltimore, but I have other reasons to be in that market also.

Sean Autry You type the "@" symbol and the first few letters of the person's name. An option box should appear in the lower left of the text box you are typing in with all the relevant screen names that match the letters you typed. You must select the person from that box. Just fully typing out a name yourself won't work.

@Dawn Anastasi

Originally posted by @Account Closed:

I keep wondering when someone's going to give me $1,000 for an hour of my time like the gurus get (ha ha). In real life, I have actually met with many BP members over lunch or dinner for an hour or two and everyone I've met has said it was a lot of information for the time. I think those looking for training or a mentor could learn a whole lot more from the friendly people on BP. Whether it's dinner or even paying for some time, I'd be willing to bet there would be more learning and less scamming that way.

Dawn:  what's your paypal email?  I'll send you $1000.  Terms:   You have to have lunch with me, answer all my Milwaukee rental specific questions when I visit in October, and pose for cute picture together for BP.  Are we on?

 Haha, I know you two are joking, but thought that I'd throw in a random factoid that premium Big Law attorneys crested the $1,000 per hour billable rate years ago.  A fair number of British attorneys in England are over the $1,000 pound per hour mark.  

Big Law's $1,000-Plus an Hour Club 

Feburary 2011

http://www.wsj.com/articles/SB10001424052748704071...

@Brandon Turner

So sorry that you're experiencing this.  Is this is one of those judgement proof tenants where it's not worth going after?  

iI you're desperate, have you considered taking on a roommate or two? If you have spare bedrooms to rent it may help ease your monthly spend.  Are there ways to make some side income while you're looking for jobs?  Even if it's only something like Uber, that's better than nothing.  How much unemployment insurance will you get?  

Are there expenses you can cut now like cable, data plans on phones, etc to preserve your cash?  Can you move in with relatives and rent your current home for profit?  If you're currently renting can you cut the lease (some leases will let you terminate early due to job loss and if not if you give the landlord as much notice as possible they may work with you and more notice means a better chance landlord can find a replacement tenant so that lease break charges to you are minimized) and move in with relatives or at least a cheaper rental?  

Doesn't help you now, but when you do get back on your feet live below your means and build an emergency fund and start saving for the future so you aren't placed in a similar position again.  No judgements here.  You not having your job and the aforementioned health care loans I'm sure also had a part to play in getting you to this point.  

I know you're in a terrible position to be feeling scare like this.  If you need to sell the condo, decide that quickly so you can hopefully sell it for retail and not be forced into selling it for a fire sale price because you waited until the last minute when you need cash asap.  Even if you do sell, drastically cut your expenses now in order to stretch those funds as long as possible and don't depend upon you getting jobs quickly to remedy matters.  Lots of people during the crash burned through their savings by maintaining their livestyle and hoping that they would find a job soon. I'm not saying you can cut every expense but cut every expense you can.  Last thing you want to do is sell this condo and be on the verge of homelessness 6 months from now because you kept spending like you did when you had jobs.

 Hope things work out for you.  Best of luck. 

@Johanna Anderson

I'm going to have to echo lots of the same advice given here.  Please take the below as well-meaning thoughts offered with good intentions and not as any sort of criticism.

@Wayne Brooks is right.  $60k profit is going to be less than inflation, especially once you figure in transfer costs at the front and back end to buy it and sell it back to you or someone else.  You've also locked up any potential appreciation for such a low cost.

Usually there's an upfront fee for the option.  I haven't done any but would imagine it would be much more than a couple thousand to option a $600k house for 5 years.  

As to $2,300 rent, You can get a fair bit more rent than that for a much cheaper in price house near Silver Spring.  Take a look at what some rentals are in that area and you'll see that you can almost get 2 houses not too far from Silver Spring and collect almost that much rent each house.  So the investor would also be taking under market rents in Silver Spring on a rent to purchase price ratio.  Some people might do that if they were sure that the house had great potential for appreciation, but not at the same time giving you a cheap option to capture all that appreciation.

I agree with @Steve Vaughan also.  You need to keep your housing costs low if you're trying to keep your funds for your flipping business (my assumption, I could be wrong).  It's been awhile since I've looked in Silver Spring, but $600k feels well toward the pricey end of houses in that area--which while it isn't the most expensive part of MD near DC, it's far from the cheapest or most reasonable area to live price wise.  Even the $500k alternate house feels above average in price.  

Is there something keeping you in Silver Spring or would moving further north like Wheaton, Glenmount, etc be an option? How about a different county where you get more house for your money in a still nice area?  I remember when I was looking at houses a few years back I spent months looking at dozens of houses in an area I thought was what I wanted and ended up buying the one of the first houses I saw in an entirely different area that ended up being great for me.

If you want to start your flipping business anyway and are set on buying a place to live, have you considered a live in flip?  Doesn't have to be a disaster, but buy something where you can use your skills to get it really nice for you to live in but also build equity?  

But I don't know if your finances will allow both a house purchase and running your rehab business.  If they don't consider what's most important to you and decide what sacrifices you are willing to make.  You can find reasonably nice places to live for less than $2,300 and save the difference for your business. 

I live well below my means and don't really feel like I'm missing out on all that much.  I spend a lot on a few things that are really enjoyable to me like very nice vacations as I want to see the world but otherwise live off much less than what I earn.  

Anyway, good luck in your endeavors.  Hope it goes well for you.

Do you mind sharing how you calculate operating expense? $2,700 - $1,227 mortgage - $950 cash flow = $524 operating expense, or 19.4% of rents? Typically you see people reserve 8.3% vacancy, 10-20% repairs/maintenance/cap ex; 8-10% property management in addition to things like insurance, taxes, any landlord paid utilities, lawn maintenance, etc. All of that goes into the net number I use when calculating cap rate off of purchase prices. Just curious how you are doing your numbers. Regardless, congrats on your investment! Hope it goes week for you.

@Valerie Tapsoba

No problem. If you're interested in meeting other investors, the Baltimore REIA meets tomorrow in the Towson Sheraton. They meet 8 times a month. The BWI Meetup just occurred last week and they meet monthly.

There are tons of Baltimore investors on BP.  Ask Baltimore specific questions and I'm sure you'll get responses