All Forum Posts by: Doug Garrison

You could always just use something like this

https://eforms.com/purchase-ag...

I bought a For Sale by Owner property with a one page offer form years ago but times have changed. If there aren't any Realtors involved I don't see any reason to do a due diligence clause. Earnest money is all that's needed to create a binding contract. $1000 is fine as long as the seller thinks that it's enough to show that you are serious. 

@Joe Villeneuve

Your math is all wrong. 

My total cash losses per year were about 650 so about 9750 total. I of course included principle and interest payments in my cash flow numbers.  I put down 10000 of my own money. So I invested, out of pocket a total of 19,750 My current cash flow is approximately 7 to 8000 per year after all expenses. Plus I have a house that I could easily sell as is for 165000. 

Absolutely

My goal with my rental property was to build up an income stream in my retirement with rental property as an alternative to a 401K since I was self employed. If I had invested the entire 19,750 in some other investment 20 years ago at 11% returns per year (not very likely) I would now have 143,000. I do still believe that this house was a good investment. 

If you add the current value of 165,000 to the 42,000 you have a total return of 207,000 on a 20,000 investment. 

My perspective on this is a little different from a lot of the replies here. For example, I have a single family house I bought about 20 years ago with a 15 year mortgage for about 85,000. It lost, cash flow wise, about $500 to $800 dollars a year for 15 years. It is currently paid off and the rents are $1200 per month. 

@Adam Payne

Adam, we've been investing in conventional rentals in Greensboro for about 25 years. We are considering dumping (cashing out) a couple of our worst performing houses and possibly buying STR in the Blowing Rock area. Your vacancy rate experience sounds fantastic. Way better than I expected. I have friends with NC beach property who feel lucky to get 8 or 9 weeks a year.

Do you do your own management, booking etc. using AirBNB? The toughest part for me would be managing the cleaning etc on each turnover since it's a almost 2-1/2 hours from my house to downtown Blowing Rock. 

You will probably find that most properties here in Greensboro that meet the 1% rule aren't in neighborhoods that are super desirable. We have a few properties that were close to meeting this when we bought them but most of these were small multi family, duplexes and quads. We tend to look for properties that need some work and offer a chance to bump up the rents. 

However, like any other market you need to do a more comprehensive cash flow analysis. You are right that our property taxes are relatively low. For example, I bought a quad 3 years ago ( 4 2 bedroom Apts) for 330,000 which grosses 2800 per month. The cash flow is positive, with probably a 5-6% roi. My first inherited tenant is moving out in a month and I hope to renovate and increase the rent on that unit by 300 per month. 

The Zillow app suggested rents seem to be fairly reliable here. I check these first whenever I have a vacancy. 

I just started using Zelle this month. It’s working great for me. I had 4 tenants use it the first month. I signed up through my Capital One account. 

I just saw this article https://techcrunch.com/2018/02/16/zelle-users-are-finding-out-the-hard-way-theres-no-fraud-protection/. This make me like it even better. Once the payment goes through the money is mine. Just like it should be.