All Forum Posts by: Chris Majors

I gotta tell you..  I've done a couple door knocking campaigns in the pre-foreclosures in my area and have had 0 success.  I looked up the pre-foreclosures in my target market and literally drove there and knocked on the door.  If no one answered I left a note.

The people that did answer the door were not surprised and had no interest in selling to me, mostly just abrasive folks, most of the time I wasn't the first. Some were vacant and eventually hit the MLS as REO's. Some had a story how they were working it out (and did), others were in denial and eventually got foreclosed on.

For some reason, I didn't see much motivation in these people.

I have however bought a couple pre-foreclosures that were ACTIVELY marketing the property. Both times they were FSBO's!

Maybe this is a silly suggestion based on my limited experience, but focus on the ones that WANT to sell and work out a deal with them?

Again, my limited experience, but it has yielded some nice profits:)

Sounds like their attorney needs to make some modifications so the deal is what you agreed on.  It shouldn't be an issue to use their attorney as long as the terms are what you agreed on.  It may be advisable to contract your own attorney to review the docs prior to closing.

Why not have your real estate agent use the MLS? They can search "rented" comps with the amount the owner is asking. Any agent with MLS access can do this in less than 5 minutes for you.

I've also spoken with some smaller local banks and they will do lines of credit on investment property, but they will have higher rates around 5.5% up to 75% LTV.

In speaking with some banks, you can get a HELOC up to 90% LTV on your primary (maybe more depending on the lending institution). I think it's a great way to invest in rentals because the rate on the owner occupied HELOC will be below investor financing rates. You can also do the BRRRR strategy to pay off the HELOC and repeat.

I DO have a couple LLC's for my businesses, but my real estate attorney told me that in all reality LLC's do NOT actually give much in liability protection (particularly single member LLC's). He said that if you screw up, or someone wants to sue you, it's essentially like being sued as an individual. He advised to get a liability insurance policy to cover my behind.

From what I understand multi-member LLC's get a little more complicated to sue, but it's not that difficult. Not an attorney, but makes sense to me..

A big factor here I no one has mentioned is the type of Freon in the unit makes a dramatic impact on maintenance.  I would say if the unit has R-22 Freon and is leaking and you have to pump more into it every year, go ahead and replace.  The government is phasing out the old Freon and the cost increases have been super dramatic over the last couple of years. 

Otherwise, if it works great and you have no problems I would roll with it.  Appraisers will definitely NOT give you a higher appraisal (or at least anywhere near dollar for dollar) for replacing the unit with a newer one.  Just keep in mind if you are buying and holding for the long term it would be a good investment to replace a unit with the old refrigerant when you have to start charging it up regularly. 

@Jack Forester

I just finished a flip in West Lake (Augusta area) with a pool with the same problems (stupid wood siding pool they don't do any more).  We ended up having to remove and replace all the pool decking and basically redid everything.  We kept the pool because it is one of the most expensive neighborhoods in the area, but sunk around $13k in the stupid thing. 

Ultimately this flip turned into a nightmare because it was myself and my partner's first "luxury flip."  It was a great learning experience, but not a money maker. 

All said, if the deal is still available I may be interested.  Shoot me a PM with the details and maybe we can both make some money.

I have found more benefits to renting section 8 than cons.  Note these opinions are specific to my C class rentals.  Here are some benefits:

1. Rent direct deposited in my account on the 1st.

2. Longer term tenants.  If you provide a quality home, they will stay as long as they have their voucher.

3.  Free thorough annual inspections.  The housing authority inspects your units annually to make sure it meets their standards.  This may be a small pain if you have to fix a couple items, but it's actually a benefit because they make sure your investment is being properly maintained.

4.  You have a ton of leverage with your tenants.  They CAN NOT lose that voucher!  If they are not taking care of your property or living up to their lease you can lean on their case manager to get them straightened out.

5. Depending on the area you can get higher rent than non section 8.

6. Much easier to find a qualified tenant. 

My main complaint with some section 8 tenants is they are generally a little more needy with things like changing light bulbs, batteries in smoke detectors, changing filters, and other small maintenance items. 

If you are renting section 8 locally I wouldn't recommend paying a management company.  It's easy to find qualified tenants, you don't have to collect rent, and you'll most likely only get a few calls a year.  Pay yourself the 10% :)

@Sharaya Rutherford

Hi Sharaya,

I think you just showed one of my listings a few days ago lol.  That's exciting that you are getting involved in real estate.  I'm also an agent with KW (I'm never at the office any more).  Give me a call some time, maybe we can make some money together.