All Forum Posts by: Dave Kush

My number one question would be, what is the cash flow? Seems like the value is there if you are able to complete the conversion. After accounting for your monthly payment, vacancy, maintenance, management, and a return on the the cash you have to put in, are you still in the black? And then if so, by how much?

second thing is what appreciation looks like in the area. After the monthly cash flow, you are also getting appreciation as a benefit, even if you're not realizing it immediately. I like to calculate my return using both the cash profits against my investment straight up and then also cash flow plus appreciation. I give more weight to the straight Cash Flow number.

That is a really fascinating question, Logan. Appreciating it as a student of the Constitution and as a former trailer park resident.

it might depend on which specific individual were talking about, but most of the founding fathers supported the idea of the common person being able to have a decent life with a little property ownership. Trailer parks are a weird mix, because people own the building but rent the land. Jefferson always idealized the yeoman farmer. In the sense that trailers provide low-income people with the possibility to be self-sufficient and at least some asset ownership, I think he would favor them. On the other hand, to the extent that they are places where people stagnate and go backwards instead of forwards, I think the founding fathers would not be pleased.

Hamilton probably would have had a low opinion of them either way. 😀

There are many versions of a correct answer to this question. 

if you are new, it might be worth considering a basic single family home first and foremost. A three-bedroom one to two bath ranch is essentially a commodity. They are the easiest to locate in the easiest to sell, and they have the largest market of possible buyers. 

From there, I would consider how much Capital you have at your disposal, your personal feelings about risk, and then finally your financials. 

If you have money that you want to invest, then consider the rentals and pushing for the income stream. If you need to build up more cash, fix and flips are a good way to do it. They come with their own set of risks.

Fix and flip is always a viable strategy. You just have to buy right. That's the hardest part. The profit is made when you buy. You have to look for deals that are discounted, because in general, you cannot buy things at retail prices and sell them at retail prices and make a profit. Got to buy it wholesale. The best advice I can give you there is not to buy into a deal just to buy into a deal. Have your parameters and stick to them until you find something that meets them. No matter how it seems in the moment, there is always, always, always a better deal around the corner.

Hi John,

Congrats!

No, especially if they told you it would be okay. Make sure you have that in writing.

It is typically a simple quit claim deed. I am in Illinois, and here they are pretty easy to file.

I have transferred properties without getting the bank's permission. I don't recommend doing that, however if you just got the loan, chances are the interest rate is in the 7s, so they probably aren't going to be trying to call it in anytime soon!

make sure you indicate when you're signing for the company verse when you're signing in your personal capacity. You sign for both The Grantor and the grantee. 

At the end of the day, this is one of those things where it's probably as simple as filling out the form and mailing it in with the fee, and that's all a lawyer will do for you as well, other than send a bill. Dm me if you would like I can send you the template I have used in my state as an example.

I would recommend locating a good agent first.  They often know the contractors.

It is a red flag per se, but not a deal breaker on its own.

how a landlord manages their property plays a big role in the regularity of tenant payments. If this sort of thing has been tolerated in the past, it may not be a big deal to the tenant or the prior owner. It will take you some time to retrain them, but if you come in professionally and make it clear that there is a new owner, that will help.

if the property is a good deal based on all of the metrics, then it is a good deal. The tenant is temporary. If you can deal with some late payments for the rest of the lease and then get someone new, good deal. Of course, the reality is that the tenant is 10 days late and hasn't paid. I would be watching very closely to see when it gets paid. Can you get a record of payment history from the seller? Like literally the dates that they were paid?

Even good properties end up with a bad tenant from time to time. What you might do in this case is estimate the time and cost to get rid of the tenant, should it come to that, and then factor that into your calculations.  And obviously, you could be getting yourself into a headache while you deal with that tenant. Just be realistic about that and be honest with yourself about what you're willing to deal with. Determine the cost of the tenant for the rest of the lease if they suck, perhaps including an eviction, and then ask yourself if the property is worth it in the event that comes to pass. And of course, should that come to pass, can you survive it financially? 

Thanks Vince. I would check out a zoom for sure. 

This is a great question, and I admit I hadn't really thought of real estate like this, even though people frequently talk about appropriate strategies for stocks and bonds as you age. I always just figured I would buy properties when I was young and live off the cash when I was old or sell them. But you make a really good point about that midpoint of the career, which is where I'm at now, I might not be looking at the same 30-year time frame for each deal. In the end, I always try to get things that have a little bit of equity and will get some appreciation but I also have to have some minimal cash flow, I do not subsidize any properties. My strategy and experience has been that if I buy right under those conditions, even a couple of those properties will make me better off by a wide margin then I would have been with social security.

i should add though, I'm a full time w2 employee with other retirement funds. 

Somebody is going to say "go to local meetups" so I'll just get that out of the way. 

Know what you're looking for in a deal, what you'll bring to the table, what the partner should bring. The more specific, the better.

You may know people that would be interested in investing. Be careful with friends and family though. 

This thread has good advice

https://www.biggerpockets.com/forums/61/topics/1160205-why-most-partnerships-don-t-work-and-the-few-that-do

Sure, send me a dm!