All Forum Posts by: Derek Luttrell

@Mike Cumbie tell me about it. I don't anticipate my new tenants ever doing anything worthy of an external complaint, but now that this neighbor has my number I am curious to see what he decides to complain about down the line. 

I never thought I'd have to factor in the potential of a NEIGHBOR being the problem instead of a tenant, but I guess that's the beauty of landlording.  

Hi there,

I closed on my sixth buy and hold rental recently, and had my first Open House for it this past weekend. Today, I received  multiple calls from the next door neighbor, and he is insisting on having a say in the tenant selection because he "wants to make sure he gets good neighbors." 

I don't actually owe this guy any of my time, right? He wants to know who came to the open house, when they plan to move in, and all kinds of things that are none of his business. Just wanted to see if anyone out there has ever come across something similar before.

Pretty sure when I made my BP bio a little over a year ago, I said something along the lines of only caring about having ~ $2,500/month cash flow to pay for my primary residence. I accomplished that in my first 12 months, and now I intend to double that by this time next year. I also now plan to sell my overpriced primary and move into one of my rentals that costs me $900/month because I prioritize cash flow over impressing other people. If I can get my cash flow to fully fund my living expenses so I can save/invest 100% of my W2 income, I think I can be a millionaire at age 32 (age 26 now). I prefer setting short term goals and reassessing once I reach them vs one long-term goal.

Guaranteed Rate. I close this Friday on my 6th loan with them, and I can use them on any property I buy in the states. Friday's closing will have taken 11 calendar days from when the seller accepted my offer, to me signing the closing documents.

Once a loan closes, they sell it to someone else. A potential downside is that you will have a new mortgage servicer on every loan, but I care about being approved for the loan in the first place. If interested, PM me and I will send you my guy's contact info.

I would say the niche I have settled on focuses on quality. I pretty much exclusively go for 3-bedroom ranch homes (no basements or stairs, for easy maintenance) with a sales price of $80-120k and rents between $1100 - 1400. I invest out of state, but it is the town I grew up in so I know it well. I also only buy properties that I wouldn't be embarrassed to live in myself. 

I don't have lofty dreams of hundreds or doors, nor will I probably ever buy a multi-family because they are built in less attractive areas of town, and when my SFRs become available, I get applicants who are looking to leave their current duplexes. 

I might be paying more per door than the average investor, but I already have a full time job, and it hasn't taken me more than 10 days to fill a vacancy yet. For these reasons, and more, I think my personal goals will be met with 10 such properties. Currently at 6 so far. 

Did you buy in Lafayette, near Purdue? I am from Fort Wayne, IN and went to IU in Bloomington. I moved to Chicago after graduation, but have two properties here and three in Fort Wayne now. I also got a huge kick start by buying a 3-bedroom condo in Chicago and renting to roommates who pay my entire PITI. It's amazing how quickly you can snowball your savings when you live for free.

Congrats on getting started--I'm sure you are hooked now. 

Lack of interest almost always comes down to being priced too high compared to the competition. Not that Zillow's estimates are always spot on, but as a consumer, they are probably turned off by Zillow's rent estimate being $1600, but rent actually being $1800. The house looks great, but if I were a consumer in the area, I would choose one of the ones nearby in the $1600 range. 

I like being either at, or sometimes (like in the winter) $25 below, the next best option in the area that a renter could choose. I just filled a vacancy with a new Dec. 1st lease within two weeks this way. 

@Russell Brazil @Richard Sherman those are good points. On previous deals of mine I remember being like $3-5,000 away from the seller's best and final, and thinking I should walk away. In reality, if the deal works at your number, it probably still works at $3,000 more, and it's a drop in the bucket over a decades long asset that someone else ends up paying for. We're all stubborn in wanting to feel like we came out on top, and it's something I personally need to learn to let go of. 

Originally posted by @Russell Brazil:

If it were listed for $1, would you still feel like you over paid because you qent hundreds of thousands over asking? If it was overpriced at $400k and you negotiated down to your current contract price, would you then convince yourself you got a good deal because it was $65k under list?

 What you described here is what I go back and forth with myself on with every offer I make. It's like if a property is listed for $140k, I'd be okay paying $130k; but if it's listed for $130k, suddenly I'm only okay with paying $120k, for the same property. I hate how the asking price sets so much of the tone on what I as a buyer am okay with paying. I'm still looking for a way to overcome this. 

@chris conn