All Forum Posts by: David Hendrix

On an REO, the bank typically does not disclose anything. They will disclaim knowledge of any issues. They never lived at the property and would have little to no knowledge of any defects. Buyer beware on any REO - glad that you did the inspection and that they found the old oil tank. I also have never dealt with that issue, but I have heard that it can be very expensive if the land is contaminated.

I completely agree with Jeremy. I feel that the best agent to talk with is one that represents several different insurance companies. These are called independent agents. You need to find one that has worked with real estate investors. If you find the right agent, they will get you the best coverage for a reasonable price. 

Insurance companies have a love hate love relationship with real estate investors. If you have an agent that represents several different insurance companies, you will be able to quickly and easily find another company when your insurance company jacks up rates significantly or exits the rental market all together. We real estate investors have hammered insurance companies at various times in the last decade and rates and products can fluctuate greatly. 

If your agent does not offer some sort of umbrella coverage, you probably have the wrong agent! Whether it is on a commercial policy or a personal policy, you can't beat the coverage for the price. Even if you have your rentals in an LLC, an umbrella policy should really be high on your list.

Best of luck to you!

I never attended a RE conference like this, but did so for a general leadership/economic conference - super cheap to get in, but then they sold you on the bigger stuff. I sat back in my chair and watched a bunch of people jump out of their seats to grab up their worthless junk! It was sad to see! Overall, it was worthwhile as long as you ignore the sales calls - I bet you pull something from the sessions. I wish I could attend - could be fun!

I had a hard time believing that so many of my tenants did not have a bank account. There are several posts about allowing those tenants to pay electronically even without a bank account. You should look those up on BP. It seems that money order are still the preferred payment method for these tenants.  

I would like to see more of my tenants with bank accounts use the free ACH method - but not one has signed up!

I would view these as one big multifamily deal. Focus on the financial statements from the seller's income tax returns. As Jerry mentioned, make sure you know what work is being done by the seller to add those costs into the projection. My assumption is that the seller will not sell you just the best performers. If they are looking to get out, then the good, bad and ugly likely goes along with the sale. Sell the ugly and fix the good after you take possession. Put those costs into the projections.

For the loan, the first place I would go is the seller. If the seller is not interested in taking back a loan (and make sure you know why they will not), then a good local bank, that you hopefully already have a relationship with, may be able to write all of the loans in one underwriting process. 

Good luck!

@Trevor Ewen 

Thanks for sharing the REIT post. I like the definitions!

@Benjamin Von Blon

Real estate crowdfunding is an online platform that brings those with the ability to find and execute on real estate deals with investors that would like to fund the transaction. As an investor, you can invest a small portion of the total deal while others within the crowd invest the rest. As an investor, it limits your exposure of risk to any single transaction. Currently, only accredited investors are able to invest in the crowdfunding sites that I a aware of. Take a look at Realtyshares.com (sponsor of BP) or, Realtymogal.com for more information and to see the definition of an accredited investor. You are correct that each property would establish an LLC and all of the investors would own a portion of that LLC. Payouts depend on how the sponsor structures the offering. Some are pure debt deals and the payment of the stated interest rate is paid regularly, some are equity deals with preferred interest and an equity kicker at the end.

So here is an issue that I have been struggling with over the last 6 months.

I work full time at a busy stressful job. I enjoy it, but it does not leave me a lot of time for my suppressed passion of real estate. I have managed to purchase 3 rental units, two are multi units and one SFH. In total, 15 units. I have a property manager and she is wonderful. I struggle with growing this as my area seems to have some opportunities, but it takes time to source the deals!

Then there are turn-key solutions. I struggle here as well. They all sound great, but I need to be able to see my properties at least once every couple of months and I hate the idea of investing long distance. I have and am considering something here, but to date have not pulled the trigger. I have a pretty decent market in Columbus Ohio within an hour's drive.

Then there is real estate crowd funding. This seem sexy to me - most of the deals meet my cash on cash return requirements when I buy and hold. I do not get appreciation or the tax breaks, but I do not expect appreciation in my area anyway. The ease of these programs are very intriguing to me! I get to have a professional vet the investments and I get to own little pieces of a bunch of properties. I could just invest in an established REIT, but where is the fun in that? I do have some money invested here. My problem is, I will consistently have to work these assets as the loans/equity are typically less than 5 years in tenure.

I would love to see some discussion on this topic. Is this a good subject for #ASKBP ?

Anyone else out there dealing with the same dilemma?

Thanks!
Dave

Hi Jon,

I am also from Mansfield. It's an interesting place for real estate investment. Good luck to you.

Dave

Kimberly,

My property manager actually gave me a name of a local CPA and that worked out well. Thanks!

Thanks guys - I appreciate the comments!!