All Forum Posts by: David Moore

I concur with @Phillip Williams on most points.  I invest 100 miles south of where I live for several reasons.  I've found my 'backyard' as J Scott advises, and find that my study is best spent in that area.  But to speak of property management, I do not use one, yet.  I want to get to know all the issues associated with property management, so that when I have too many properties to self manage, I'll have an idea of what character qualities and abilities I want in the property manager I eventually will choose.  

@ Emma Chen,

I'm focused on looking for value opportunities from all sources. Around the Twin Cities, where I live, much of the housing is overpriced. I buy in a smaller town where I have a good number of relatives, and where everything is affordable, and rents are decent. This is my first HUD contract, though this is my 2nd HUD attempt.

Welcome Antonio,

If that is your definition of an idiot, well, you need to hear about some of my blunders.  That is a darn good mistake to make...at least you have equity you can borrow against should the need arise.  A lot of the experienced investors here have encouraged me to build a cash position, so I'm working on that.  We all learn slow, man.  Don't beat yourself up.  

Welcome, Joel.  I'm an investor in Minnesota.  I own one property in the Twin Cities, and several in southern Minnesota.  Most people on BP will ask what  goals you have in mind for real estate investing.  So, having said that, what do you want to do? 

If you have interest, I highly advise you check out the Minnesota Real Estate Investment Association (REIA). I am a member, and I've learned a lot. This is a group of investors who are everyday folks, and the training you get is really great. Check out the website at www.mnreia.org. There are monthly meetings. You can register for the next monthly meeting in August, and print out a 'free' coupon on the site. I also encourage you to check out the 'Cashflow' game night at the K of C in Bloomington. It is a lot of fun, and you'll find a lot of friendly faces at that event.

This site is also great...a lot of really smart and nice people post on this site.  You are in a good place to learn.  

Thanks again, all, very much. @Wayne Brooks, I read that very thing in the HUD documents yesterday, and my realtor assured me it won't matter. He is a good man, so if this is a mistake, it will be a good opportunity for both of us, my realtor and I, to learn. @James Syed, that is a great idea on determining the value. I'll ask my realtor as you suggest.

Everyone, thanks for your input, facts, and encouragement. We signed the deal today. The only issue I see is possible fraying of vent pipe in the attic...the base of the pipe is wrapped in asbestos liner, and is flawless. At the top of the pipe, it looks like a different material altogether. Going to have my plumbing contractor look at it and advise if we should wrap it or not. We have the 15 day inspection window after HUD signs. I see no deal breakers. Still, guys, the 2% rental is elusive.

A key issue here is the early onset of Minnesota winter.  I don't want to leave this on the market another 30 days to get a $2,000 reduction on it, only to have to hold it all winter, because most tenants won't move in the winter, from what I've been told.

Greg, how did you do the @David Moore designation?  I cannot figure that out.

Sorry, meant Joel.

Joe,

What is cap ex? 

Oh, just want to chime in on the ethics of a lease option. As an investor, it is a good tool to acquire properties. Guess what? You have to pay an option fee to tie up the house for sale for 3 years. So don't throw out charges of unethical behavior without considering that the person who puts down $5K or $10K for a lease option clouds the title for the 3 years of the option, or whatever the term. That owner cannot sell the property. And the option price stays constant. If you are not in this business to make money, you are not in this business. And again, Dodd Frank...go to a REIA and learn about it...don't take a Google search or most of these opinions as fact. Talk to someone who knows about it, as opposed to just being afraid of it.

My LLC made an offer on a 2 bedroom 1 bath home in Albert Lea, MN.  The home needs a $1500.00 sump pump and about $1500.00 in roof repair.  Other than that, it needs nothing.  Similar homes in Albert Lea sell for $55,000 to $75,000.00.  

Listed price $47,000.00, on the market now for 48 days. My LLC offered $37,600.00, exactly 80% a week ago. On Tuesday, I learned from my realtor that HUD countered at $41,500.00. We chose not to increase our offer, and we pulled the offer. Today, my realtor calls back, saying HUD decided they will take my offer, if I am still interested.

It will rent for $650.00, tenant pays all utilities save water. Cash flow, calculated on this site, will be $248.00 per month. It is already a pretty good deal, but not quite a 2% winner. I would like your advice. Lock up the HUD at $37,600.00 or counter with a lower offer. What would my fellow BP investors do in my place? I have more potential renters looking for a home, so I'm tempted just to get this one in the boat.