All Forum Posts by: Corey Conklin

Why do you want to get into rental properties?

Is it because you saw that someone got rich being a real estate investor? you want "financial freedom"? Create "generational" wealth? Or you saw that someone got rich overnight investing in real estate?

If you are doing it for those reasons then you are going to have a rude awakening. 

If you don't have any skill sets that translate to being a real estate investor and you plan to "build a team" to do it all for you then you are also in for a rude awakening. 

The reality of real estate investing is that it take A LOT of work. If you don't understand that going in to it, you will fail.

Now that I'm off of my soap box. The best way to get into real estate with little money is house hacking which I believe someone already said. If you have money then go buy a rental property, advertise it to rent and go from there. You'll learn as you go, just jump in and start taking action.

I think your post kind of speaks for itself. You know the steps and processes to managing properties already, your wife is looking for a flexible at home job, and it maximizes your properties.

I know a lot of investors are big on outsourcing things and leveraging their time but managing 15-20 properties is not that difficult of a task and even easier when your spouse can handle the majority of the work. 

The time you spend managing your properties is just shifted to managing a property management company so it's not going to save you that much time in my opinion. 

I'd stick to self managing if I were in your situation.

Quote from @Derek Dombeck:

Simple deal. 

Draft a Lease that give you the use of the building and the right to do improvements at your discretion and your expense. Your rent amount will cover all of your Aunts monthly expenses. She keeps her insurance policy but adds you as an additional insured party.

2nd, draft an Option to purchase which identifies the purchase price and length of time you have to exercise said Option.

Now you can start improving the property and when you're ready for your 1031, you go ahead and close. 

Perfect. I knew there was a simpler way than the ideas I had in mind and this is it. Thank you @Derek Dombeck

I’m needing a little help on how to make a deal I have work out.

Background:

My aunt just inherited a home (free from debt) from my recently deceased grandmother. The house is in decent shape but it needs some cosmetic work to get it back into shape. My aunt and I have agreed that she would sell it to me, as is, for a good price.

The issue is that I’m cash poor right now in other investments and need to wait to sell a property I have slated to go on the market later this spring to 1031 into this property.

She is fine with waiting to make it work on my end but I’d like to get in and begin doing some of the repairs prior to this spring when leasing is in its prime time. She also doesn’t want to have to keep paying the holding costs if she doesn’t have to.

How can we set this deal up where I can take possession of the house and begin work while waiting to do the sale until I’ve got another house sold to purchase this one? I’ve agreed to pay for holding costs and take responsibility for my work. The issue is how do we handle a situation where the house is taken out by a storm, or some other insurance claim happens prior to the property being in my possession? I’ve talked to my insurance broker and he said that it may be tricky getting an insurance policy to cover my interest in a property I don’t yet own.

I want to make sure that both my aunt and I are both covered and not at risk during the transition period.

Any ideas or help with this situation would be much appreciated!

This is completely true! REI is a lot of work and needs to be known to any new investor looking to get in the game.

Quote from @Steve Vaughan:

Law of diminishing returns apply.  Continuing to read books after grasping the basic knowledge = overrated.  

Reading anything really is not a complete waste of time, but once you have the basics down, the 'return' on your time and effort diminishes and the opportunity cost grows.   

This is an interesting take on the law of diminishing returns. That's a great way to explain it! There are tons of books that just reiterate the same stuff so your time is better spent doing something else. Great point!

It seems like every guru, self-help expert, or anyone trying to sell you something all have the same advice. You need to read more! Read this book about how to sell, read this book about helping your mindset, read this book about time management, read this book about financial freedom and on and on… It’s mentioned in every business podcast, every real estate group, every course or seminar, and everywhere you look to seek help. With the amount I hear it mentioned or have had someone tell me I should read this book or that book, it’s got to be the answer to success, right?

I don't think reading is near as important to success as it is made out to be. Don't get me wrong, I absolutely believe in the power of reading, (and read almost every day) it's just that I believe that it is currently being oversold, especially in the REI world. (It may be because everyone has their own book that they just wrote and want you to go buy a copy)

In my own experience there is nothing like good old-fashioned, real-world experience. What I’ve learned from actually rolling my sleeves up and working towards something holds 100x the value any book ever could. I’ve never lost sleep over reading about someone else’s mistakes, but I’ve damn sure lost sleep over my own mistakes.

Reading is important just like getting an education is important, but without getting your hands dirty you’ll never accomplish anything.

What are your thoughts? How important is reading to your success?

I would ask a few questions. Do they have a good track record as your tenant? I know they were inherited so you may not know much but I would start there. If they have taken care of the place and pay their rent that would sway how I handle the situation.

I would try to put myself in their position. How would you handle taking on 3 kids? They are obviously in a tight spot and trying to make the best of the situation. I would try to understand as much as you can. Do they know how long they think they'll have the kids? 1 week? 1 year? If it's a long term change, do you have any other properties to accommodate them? Are you able to let them out of their lease with minimal costs? I'm sure they would be thankful for your help in this situation.

You have an opportunity to help a family in a tight spot or be a cold hearted landlord. At the end of the day it's your call and only you can make that decision.

The only thing I would have done different? Start investing in real estate sooner. 

Quote from @John Roberts:

Hi  @Benjamin Carver,

She said that the listing agent (who is also the out-of-state owner) told her that another offer came in after she countered my initial offer.  I asked my agent for her opinion on my counter offer and she said that couldn't say much and that she needed to remain impartial.  I got the feeling that the listing agent told her something and she didn't want to convey it to me.  It seemed to me that I was the only offer and the seller was trying to get me to bid against myself.

The listing agent said that she had two offers and wanted our highest/best offers.  I submitted my initial offer again and she ultimately accepted it.

I've known many situations where agents try to play games like this one. Always keep your guard up when dealing with agents!