All Forum Posts by: Chris Sellers

Arielle,

Pictures look great, excellent job!  Congratulations!

This question depends on a lot of factors.  What's your market like, what are your goals?  Usually, people flip to make quick money and buy / hold to create long term wealth.  A mix of both is healthy for most of us (more flips until you get a war chest).

For my situation, I like to think of every property I rehab or own as being for rent or sale (even though I plan for 1 option originally).  The market dictates which way I go.  For a rule of thumb, I plan to collect monthly rent of at least 2% of my total investment (lots of cost details to check, but this is a rule of thumb).  So for a $55k investment, I expect to be getting >=$1,100 in rent. If the market value increases to where I"m only getting near 1% monthly rent, I sell it to buy more properties at 2%. Example:  if the property has appreciated to $110k and I can still only get $1,100 in market rent.  I usually hold between these 2% and 1% numbers.

Again, these numbers shift per market.  Some really hot markets or higher priced properties are more like 1% to 0.5%.

I advise you to set these numbers for your situation before you buy your next project.  That way it's just a calculation.  The excitement of good offers pouring in won't tempt you to do something not in your best interest.  

Good Luck!

Chris

Justin,

Thank you for your service!  

FLW is in the middle of Missouri, right? These numbers are ok, but I think you can find better in rural MO. You can actually find those numbers in Charlotte, NC all over the MLS (and things are crazy here right now).

I would shop around a bit.  in rural middle America, I bet you can buy a $1,550 rent property for more like $100k around there (may have to buy two SFRs).  

Good Luck!

Chris

Adam,

Sounds like you have a lot of good things going on.  2 rental properties with your pops, a college degree, a good  job, about to get another house.  Way to go!

Keep in mind; you got rejected from "a" mortgage lender, not "the" mortgage lender.  There are a lot more out there.  I'd suggest you shop around with some other lenders.  I've heard of people going to a dozen or more.  Keep this learning in mind and be ready to justify why your job is degree related (it's very subjective).  Even if you can't get around that one, there are other types of loans as well.  The same banks also have in house financing, which doesn't need to comply with certain rules.  These rates are usually a little higher, but usually not significantly.  

Be aggressive; don't let the first "NO" knock you down.  

Good Luck Adam!

Chris

Erick,

Blind offers are pretty common.  I've made plenty of them and bought most of the houses that I got under contract.  One thing I would avoid, however, is having a strategy of always renegotiating after the inspection.   This will give you a bad reputation with area realtors.  

I always look at the pictures and calculate the rehab if I can't get to the site in time.  If during the inspection I find it was as advertised, no surprises, I don't try to renegotiate.  I have found some houses with way more rehab than I anticipated and asked for a price reduction (got some, didn't get some).    

Good Luck!

Chris

Steve,

I've only had 2 since I stopped managing my own (8 years or so).  If my current one retired and I had to go shopping, I would:

• ask around for referrals.  
• want someone who's been in business a few years at least.
• insist on a client list so I can talk to their landlords.
• drive by to see properties they manage, talk to renters if I catch them in the yard.
• insist that I be contacted and given a chance to make my own repairs if I want.  I won't really do this, but if they resist, it suggests they plan on making money on maintenance (avoid these guys).

Also, I prefer one who's also an agent.  This gives them an incentive to find deals for you, since they make money when you buy, when they manage, and when they sell.  

Good Luck!

Chris

Felicia,

Sounds like you're doing well.  Great job and two girls.  Investing in real estate can definitely build long term wealth. Just think about people you know in their 40s who are nurses.  Doing fine, but most probably aren't wealthy.  Now imagine if they had 10 paid for rental units bringing in $8k extra per month.  Now that's life changing.  What if they had 20, 50 or even 100?  It's all possible with real estate if you leverage time and let renters pay your mortgages and expenses.

I'd suggest listening to a lot of Bigger Pockets podcasts and reading some books.  There's a free kindle version on Amazon now:  "BiggerPockets Presents: The Ultimate Beginner's Guide to Real Estate Investing" by Joshua Dorkin and Brandon Turner (BP hosts).  I haven't read this one, but have heard it's a great book for new people.

While you're learning, start saving some cash.  Usually good to have 20% for a down payment to start.  If you're lifestyle can take it, would be great to buy a duplex and move into one side.  Your job will likely qualify you for great mortgage rates and you can learn the landlord ropes while on site.

Enjoy the journey and Good Luck!

Chris

Bradlee,

Congratulations on finding a deal that works for you.  I don't like using this practice.  It's disingenuous.  If you do it a lot,  you'll likely get a bad reputation and people won't want to do business with you (or they'll counter you with a large DD fee that you'll lose if you try and back out).

Good Luck on this one!

Chris

Robert,

Thank you for your service!  Sounds like you have a lot of great things going on.  Cash to go to school, paid for school (earned by you) and a wicked work ethic.  You're going to be rich soon.

If I were you, I'd use that paid for schooling to get an Accounting Bachelors degree.  This will serve you well throughout your life. So you don't get too bored while in school (I can tell you're a little OCD), satisfy your real estate bug by getting a job with a property management company (best if they also sell real estate too).  You'll learn a ton about real estate and network with all the right people (learn way more and meet more people vs driving a truck).  

Seeing real estate investments from behind the scenes, I bet you'll find yourself an owner finance deal or something in no time.  Happened like this for a buddy of mine.  He helped a guy turn around a bunch of his neglected rental properties, so the guy sold him one.  Owner financing for like 40% below market, with $0 down.  Was a rich old guy with like 200 houses, wanted to help out a young entrepreneur.  

Good Luck!

Chris

John, I check loopnet often. Got a great deal on an 8 plex there last year. I currently have a portfolio listed there only (not in MLS) because I’d have to list each house separately if on MLS (and I don’t want to sell them separately). I think people hate on loopnet because it has a lot of less desirable properties. To me, it’s one of several possible sources to check. Good Luck! Chris

Drew,

I can answer the first part, not the second.  I haven't attended my last 20+ closings.  I just electronically sign (or print, sign, scan, email) the documents and wire the money (or provide wiring instructions if selling).  This is very standard today with most closing attorneys.  If yours won't do it, just get another one.  

Hopefully a wholesaler can answer your 2nd question.  I've closed some deals with wholesalers recently, not sure if they were present (because I wasn't).  

Good Luck!

Chris