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All Forum Posts by: Craig Clinton

Craig Clinton has started 4 posts and replied 69 times.

Post: Underground oil tank found...risks?

Craig ClintonPosted
  • Investor
  • Nutley, NJ
  • Posts 72
  • Votes 56

Underground oil tanks are common in NJ.  That's great that they are willing to pay for the reconstruction of the patio.  Some sellers fight back on that.  

Odds are there is no contamination.....BUT, do not close without having the soil tested because it might be contaminated and that could possibly be VERY costly.  Have you lawyer put in the rider to the contract that you have the right to walk away from this if contamination is found.  Have the seller pay for the removal, test the soil, and wait for the results.  If the soil is contaminated, its the seller's responsibility to remediate or give you a credit to cover the remediation (again, have it in the rider that the seller is responsible).  Unfortunately, if it's contaminated, remediation and the state approving it will take a while.

Post: Decision on where to invest as a beginner!

Craig ClintonPosted
  • Investor
  • Nutley, NJ
  • Posts 72
  • Votes 56

It may be tough to invest out of state on your first investment.  Not impossible, but tough.  You should look where you may have an advantage over other investors.  If you live in NYC, you probably know certain areas really well and have people in your network that may know of deals.  That's an advantage.  If you're going to invest out of state, do you know or are related to anyone in NJ or CT that can help you find deals and the right people (contractors, agents) in those states?  

If you decide to go out of state, google Neil Bawa.  He has good procedures for vetting which cities are the best to invest in for multifamily.

Good luck! 

Post: When to or when not to pay contractors

Craig ClintonPosted
  • Investor
  • Nutley, NJ
  • Posts 72
  • Votes 56

Do not give a deposit to a contractor that you don't know.  Even if you know them, don't pay anymore than 10% deposit.  I prefer no deposit and buy the materials yourself.  Or they buy the materials and you can reimburse them once they are delivered to your property.  Pay them as each part of the job in complete.  Framing is complete......pay them for framing.  Also, try to have bonus timelines in a signed contract with them.  For example:  if they pass rough inspections by 5/31, then get a bonus of $1,000.  Then if they pass final inspections by 7/15, they get a bonus of $2,500.  They need incentive to finish quickly, otherwise they'll start your job and then string it out while they work on other jobs.  I learned this the hard way.  "Smart people learn from their mistakes.  Wise people learn from other people's mistakes"  

Good luck

Post: Short Term Rental Banner Elk, NC Questions

Craig ClintonPosted
  • Investor
  • Nutley, NJ
  • Posts 72
  • Votes 56

Welcome to the world of RE investing!  My 2 cents (4 cents with inflation):  learn your area like the back of your hand.  Consistently go to RE meetup events.  You'll meet up everyone you need to know at those events.  If you're going to just stick to Banner Elk, make that your calling card.  "I'm Mr. Banner Elk" so when RE people think of Banner Elk, they think of you. 

Good luck!

 I would definitely taken out of their security.  The furniture was not theirs to take.

Post: Approached by an investor

Craig ClintonPosted
  • Investor
  • Nutley, NJ
  • Posts 72
  • Votes 56

You are doing the right thing by vetting him.  And don't just take one good review and assume he's legit.  I don't know this person at all but there are a lot of scammers out there.

In my humble opinion, if you're just starting out, you should go to networking events.  It's a great way to meet people and you'll probably hear about a great mentor at one of those events.

Post: Rental repairs wiping out profit

Craig ClintonPosted
  • Investor
  • Nutley, NJ
  • Posts 72
  • Votes 56
Quote from @Victor Baronich:

Hi, I have been into rentals now for about 4 years.  We currently have 12 rentals, all sfh's.  What I am finding is that essentially we make no money and probably lose money slightly overall.  I was very careful when buying to cashflow at least $200/month after all expenses (most are over $300).   The problem is when a tenant leaves.  Often I am replacing floors, or painting/pressure washing, and other misc repairs.  And while it is quick to turn around and rent again, that 3-5k in repair costs kills the profit.  One unit needed a new AC, for example.  I am blessed to have family that does that so I got it replaced at wholesale, but it still wiped out a year or more of profit. 

I keep thinking all I have to do is buy more and more and eventually it will show profit.  But is that a reality?  I mean if I had 50, well then I have 50 roofs, 50 water heaters, 50 AC's, etc to maintain.  So do costs just adjust right along side cashflow?  

Since a kid I was taught the Robert Kiyosaki mentality of use debt and OPM.  So I don't pay for acquiring my rentals,  I have investors do that.  My responsibilities are the repair costs.  Maybe I should pay them off to open more cash flow, but that means sinking a ton of money into the business that could be doing something else. So is that really smart?

To those that have been doing it longer and maybe have more units, what have you found over the years?  Is there a breaking point where you have so many you start profiting?

 I must admit, I did not read the 33 replies before me, so if I am repeating what others have said, my apologies.  I don't know your market, but my first thought is cash flowing $200 per month is low.  I try to cash flow at least $700 per month on each property.  I don't know if that's right or wrong, but that's my rule.  Now, I have to be more picky with what properties I purchase, but the deals are out there.  You just may have dig deeper for them.  

You are 100% correct with 50 houses = 50 roofs.  I don't have any single family rentals.  I flip single family homes so that i can take that profit to buy multi family properties to rent out.  

I would not pay off the mortgages.  Just my opinion.  Interest rates are still historically low.  You can use that $$ to but more properties instead of paying off your current homes.

Can you increase rents in different ways to help you out for now?........rent parking spots, add laundry machines & charge a fee?

Post: Buy Rental Property Cash Or Have Mortgage?

Craig ClintonPosted
  • Investor
  • Nutley, NJ
  • Posts 72
  • Votes 56

I would definitely go with the 3 properties with mortgages.  Interest rates are still very low.  It's better to leverage other people's money.  Also, you have more flexibility with the 3 properties.  In a few years you can 1031 one property into something bigger and keep renting the other 2 or cash-out refi 2 of the 3 down the road.......much more options.

Post: 401k withdrawal for REI

Craig ClintonPosted
  • Investor
  • Nutley, NJ
  • Posts 72
  • Votes 56
Quote from @Mark S.:

@Craig Clinton You cannot ‘transfer your 401k to an IRA' until you terminate employment with the employer sponsoring the plan.


Thank you Mark. I was not aware of that. I did transfer my 401k into a self directed IRA when I quit corporate America, but I was not aware that it is a rule. Thanks again for pointing that out