All Forum Posts by: Dave Kush

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!

Agree w Jordan. Sometimes people bring their problems with them. Send the handyman. 

If there is actually an infestation, that's probably on you to repair. 

Also, 3 days in.... It's important to set expectations with the new tenant. Be very careful not to accept any responsibility unless you actually have responsibility for the situation. I find that how we respond to that first call, especially when it comes so soon after moving, can set a tone for the rest of the relationship. 

I would take the 3-1 date if you feel good about the tenant.

May depend on state, so double check you can confiscate the deposit for that. 

Personally, I just want them to pay rent or leave so I can get it rented. If this tenant has been paying for ten years, maybe just allocate some of the vacancy reserve for this and move on. 

What is the cash on cash return as lease? 200 for the door is not too bad, depending on what you have into the property. 

I ask because the first thing that came to mind reading this is why you are deviating from the original plan to lease it at market rates.

If getting rid of it, personally like the lease option over straight sale. 

I think this depends on who you expect the buyer to be and how you are marketing to them. 

If the buyer is an investor (who may fix and flip or rent out) might workout to have the current occupant allow access and give them a small gift card. 

If selling to owner occupants, I would probably not do this, unless I felt really good about the occupant. I typically sell to other investors 

Here again, quality photos, videos walkthroughs and overall marketing would be a key factor. 

Many good replies here. I will just add, one thing I have done in the past is present two offers. This is not the first step, this is after you've built a rapport and they've expressed an interest in selling.

One is an all cash offer that I could actually afford with bank financing and still meet my investing objectives of 10% cash on cash return and $250 per door. The purchase price is obviously going to be pretty low, and probably much lower than the asking price.

The second offer is a seller financed offer that allows them to get close to or the entire price that they are looking for, just under seller financed terms.

so for example, I might offer 60,000 cash, and then 100,000 seller financed at 0%. 

Once you establish that they will consider seller financing, it's a matter of finding the deal that works in terms of the amount of cash they need and my terms. In the above example, perhaps the seller would counter with 100,000 at 3%. As long as you can make it work with the noi, you just keep adjusting the terms.

I skipped all of the relationship building items because other people have mentioned these above. Just to reiterate though, building that relationship is the most important part...then you make the offer. 

Nice to see Mises get a mention. 

Used to teach econ, and that's all true.

More importantly, is completely true in the real world. 

Focus on serving people first and you will get wealthy. Focus on getting wealthy, and you're likely to end up struggling. 

This reminded me of one of my favorite quotes about partnerships.

"if going into business with a friend, always have a written agreement, because by the time you need it, you won't be on speaking terms anymore."

I have done some very limited investing with friends-family, but they met the good criteria you listed, and that's why they worked out the way they should. 

Thanks for this post. Gave me a chance to run through my current and past relationships to make sure they are on track.