All Forum Posts by: Dan N.

Isn't seller financing usually at an above-market rate?

@Account Closed , was that a mortgage per property or was it a blanket loan of some sort? If the latter, does that complicate accounting and/or taxes?

Thanks in advance,

Dan

Hi there,

A co-worker with some single-family rentals has asked whether I would like to purchase a package of 4 of them, 3 currently with tenants and one nearly ready to rent. These are 90 minutes away from where we live, in a city where I have one other rental house.

I have never purchased houses as a package and I'm wondering how I should value them? Should I just evaluate each on its own merits and then add up the total? Should I expect a volume discount off of that? I have not been offerred a price yet.

Regards,

Dan

@Todd Trader , honestly my first thought was that the three separate checks were dated to indicate which month the rents were intended to cover, not necessarily when they were intended to be deposited. Of course, on reflection, it makes sense that the intention was likely intended date of deposit and as I indicated above, that is how I plan to proceed at this point. The tenant has since explicitly confirmed her intent to me as well and I intend to honor that.

As @Bill Gulley indicated, I perhaps did not think my question through carefully enough before posting.

As a relatively new landlord, I was posting to gain perspective and to bounce my ideas off of a more experienced community for a situation I hadn't run into.

In fact, this tenant pre-paid me the first six months of rent, deposit, and fees in a single check. I did not mention this in my initial post but it did perhaps color my thinking.

Todd, your reminder for us all to treat others as we would like to be treated is a good one.

Thanks for your advice,

Dan

Maybe we should partner!

@Roy N. , that's a great suggestion. I will see if my bank has such a service.

Otherwise, I will hold on to the checks and do it manually. Thanks all!

@Wayne Brooks , you make a good point. I could call my bank and ask whether they would even accept them as a deposit. If they say no, then that's that.

@Colleen F. , I have reason to believe there is enough money to cover them, but I could be wrong.

Thanks for the replies so far.

HI there,

I have a tenant who unexpectedly sent me the next three rent payments with post dated checks. Apparently she will be traveling a lot and didn't want to forget to pay.

I have asked her to clarify her intent, but I was wondering if I'm obligated not to deposit them right away. It would be easier to do that so I can't lose them, but I could see how that might not be legal.

Thanks for any advice,

Dan

Just as another data point, I have a tenant who offerred me all 6 months up front. They are an older couple who own a local business, own another home, and were selling their old home to custom-build a new one. I was a little wary since they had no rental history. Being self-employed, there wasn't a company to call to verify income. They were unwilling to give me their whole tax return for example. They did let me talk to people they claimed were the banker and CPA but no one was willing to put anything in writing.

I was able to verify the real estate ownership via the county website. I was able to verify the business ownership through the state. I went ahead and accepted it and I have not had issues. They recently renewed due to delays in construction and paid me another 3 months in advance due to summer travel.

I agree there is a risk, but this one worked out for me so far.

I'm interested in the whole "escrowing prepaid funds" aspect and am wondering how I would know if that applies to my state (Texas). Would that be in the state property code?

Regards,

Dan

I'm a current LU member who joined about a year ago. I bought 1 house through them and captured more equity than my membership cost. I am personally managing that property as well as 2 others I have. For me, it has been wroth it.

I certainly recommend you take advantage of the classes, road-trips, and other networking opportunities.

Part of the guru problem is when people don't know your market and come through town in a weekend and tell you how to buy there. My experience with LU is that they are certainly not a fly-by-night group. All the LU people I've met are mentors as well as active investors in the market, so their opinions are based on actual experience.

The other guru argument show in this thread and elsewhere is that there is no secret knowledge that a guru has that you can't learn from places like BP. I think that's true and LU doesn't claim a secret formula as far as I've seen. I've had good luck getting perspectives from both LU and from BP. For me, LU was good at showing the whole process (acquisition, rehab, management) while BP lets me research specific points. With LU I can call and speak to someone live right when I need it. With BP, I have to wait for an answer if I ask a question (though my few new posts have been answered pretty quickly).

Other people with more background in REI might have felt that LU has less to offer. If you already have a network of contractors or a network of other investors, then perhaps there's less incremental value. But I don't think LU is in the same category with the "as seen on tv" crowd.