All Forum Posts by: Dominic Jones

Originally posted by @David Kirchhoff:

what steps do i need to take in upstate NY to collect a money judgement i was awarded during an eviction for non-payment? it's been a couple months and they have yet to pay, after sending letters for them to pay as per court order. what steps do I take now? I have bank account information and know where they work. what steps do I need to take to go after that? would it be easier to just send to a collection agency?

Ha, a little scary if you ask me. Sound good advice is to go with the attorney which was already previously said. Wish you all the best with collecting that rent the tenant owes. Do you think your mistake in getting to this problem was bad screening? Did you see the signs of this tenant having payment issues before it happened? 

Originally posted by @James Egan:

Hello Bigger Pockets! I've recently made the decision that REI will be my retirement vehicle. I'm 31 now and would like to build to 200k in positive cash flow annually. I have no delusions that that will be easy nor come quickly; I'm in this for the long haul. I want to get into buy and hold and have started reading and listening to numerous audio books.

My goal is to spend this year saving and educating myself and then make my first purchase in the beginning of 2017 and move forward from there. Given my current financial situation I should be able to set aside 50k annually for investment purchases.

Although this is my first time posting I've been lurking around for several weeks and the posts have been extremely informative.

My first of many questions is this:

Two years ago I purchased my current residence with an FHA loan. It's a single family home and I have very little equity. Should I take the money I'm going to save this year and put it towards the first investment property or use that money to pay down my current mortgage > refinance to a traditional mortgage and get another FHA to buy a multi family where I would live while renting out my current residence?

Thank you guys for any input.

Welcome to BiggerPockets James! Glad you finally came from behind the curtain and introduced yourself to the real estate investing online world haha.

You seem to be in a very good position in regards to what you can save annually and you definitely want to utilize that to your advantage so getting the most education you can do in the realm of buy and hold investing is definitely what you want to do and where you want to go at this point.

200k annually in cash flow is a very high goal to set for yourself. If that's a long-term/lifetime goal, that's definitely achievable, but for a first time goal -- you're setting yourself up for failure haha. Let's get that first one done before shooting for the sky (and that's what I often times tell myself).

In regards to your question, both options seem to be viable to me. I'll give my thoughts on both routes.

Option 1: Saved money towards first investment property of 2017. If you go this route then you'll know that you'll be putting all your eggs in this one basket, preparing yourself like a buy & hold gladiator over the next year on tenant screening, rehabbing (so you can get in those units and force appreciation) and analyzing deals so you can buy the right multi.

If you go this route then you won't really get distracted by managing two different properties and trying to scale too quickly.

Option 2: If you decide to go with this route you have several different steps that you have to take before you get to your desired end result. Option 1 is much more direct; however, if you decide to go this route, you'll end up with more properties and more cash flow as well as the responsibilities that come with that additional property.

The refinance also has some risk, you'll be refreshing the loan there and basically starting over on that... however, if you're able to successfully re-fi that mortgage back to a conventional, and sustain the increase in the mortgage payment, while you apply for another FHA and hunt for another property to get into, then you should be fine.

But that's what I think will be your biggest challenge, just making the jump from the current property to the multi. Is the current residence you're living in a SFR?

I'm looking at getting more into the Philadelphia market as I'm only a couple hours away and I feel it's very similar to Baltimore so definitely keep in touch and let me know what you're leaning more towards and what you do.

The veterans/pros will be here soon to post more and give you better direction :) 

Is a blanket loan different than a regular loan for a multi-family house?

Or does the purchase only fit the "blanket loan" terminology if you're buying:

two (2) separately deeded (1 deed each) properties on the same lot (1 lot) under one  (1) loan?

Just would like to have clarification. Thanks guys!

Best,

Dom

Originally posted by @Ali Daiy:

Originally posted by @Jeff B.:

My lease would not allow this and cause both to be evicted.

 Just an idea, If I were to do this. I would market to landlords and let them know my intentions to sublet upfront. 

 See... this is exactly what I mean. You would have to be upfront about it and get a landlord that knows exactly what you're doing so that it can be written into the lease. Most leases and landlords would never allow such a thing mostly because they feel as though you're pulling a fast one. That's why transparency (as in most things) would help you achieve the end you seek. 

Vas Bouras hi !! Yeah agree with all the previous posters, you're not doing it wrong. You just have to learn your market. New York is typically a high demand and high appreciation market and not a high cash flow market. So everything revolves around the equity you have in your multi. For example. If you buy that 350k house for 325 at the end of the negotiation and you only cash $100 total from the house a month but the equity continually builds up from the rental pay down will build your equity. Also if you rehab it, you'll force some appreciation and get more equity from the house to. Only thing is, with that equity you can't pull it out of the house and use it as cash for other investments until you re-fi. A great comment was made up above that when buying off the MLS you make an offer on a property you like that would make your desired outcome numbers make sense. If the seller doesn't like it and won't meet it then you just move on.

Hi Ali Daiy thanks for posting this idea up. definitely think it could work but your snag might be in converting the basement and/or attic to another room. This could cause problems of the landlord doesn't allow it and you do it anyway. And also, if the zoning of the house isn't allowed to be rented out per room than you'll also be putting the owner at risk with legalities if anything were to happen and legals were to find out. Hopefully a more experienced investor can support or deny this. Outside of those two things I think you're onto something. One of the very first people I met on bigger pockets told me that you don't need to own it to control it, and your example of leveraging your lease is a prime example of this. Hey, I got this property under contract for this much each month. Now I can go and rent it out to someone else for X amount more and take the difference. It sounds nice, but I'm also not sure how the leases would affect each other. What happens if you have a tenant in the house longer than your lease is up with the owner? Would the owner know about this at all and would he/she be cool with it as long as they know about it up front and know you're managing everything? Maybe...but it seems like a long shot. Definitely will need some trust developed in the relationship for this to work. Transparency builds trust do being upfront with your intentions might be helpful for seeing this through.

Originally posted by @Sabrina Kane:

Harris County Tax Auction 

New information 2016. New location 

Tax sales are held the first Tuesday of each month. Sales must be held from 10:00 a.m. – 4:00 p.m. Each of the Constables conducts sales of properties in their precinct and the sales are most often held simultaneously.

Effective with the February 2, 2016 auction, future tax sale auctions will be held at the new location listed below:

Bayou City Event Center
9401 Knight Road
Houston, TX 77045

That's awesome information. Hitting everyone with the facts! Where did you get that from if you don't mind me asking :) 

Just so I'll know where to look potentially in my own state/city and other states/cities I'm interested in.

Thanks for posting!

Arthur Fuller II to me it's a sticky situation so I feel like it's pretty uncomfortable to talk about. If you're ballsy enough to pull it off you have to be really compassionate and bleeding genuineness lol. Otherwise you can look into mailing and opening up the conversation via letter and lead to phone then to a personal meeting.

How you doing Alexander Forrester thanks for reaching out and showing your concern to the BP community! I started out last year and just jumped and was told two options: 1. You can get your states legal purchase agreement contract 2. You can use a very basic/vanilla/generic purchase agreement that has the additional clause of allowing you to assign this contract to your buyer. - You can also add the inspection clause "subject to your buyers approval" to help give you an additional out too. I did the second option the first time because I felt more comfortable without all the legalities of the state purchase agreement. Although, many wholesalers all over use a mix. So i guess it really is what you feel more comfortable with. I'm very green so option two is what I felt best with.

Okay, so I read through this entire thread and did my reading up on Capex b/c I wasn't exactly sure what that was.

Now that I know that...the thread and intent of @Brianna H. is a lot more clear to me now.

"Capital expenditure, or CapEx, are funds used by a company to acquire or upgrade physical assets such as property, industrial buildings or equipment."

I'm still a little bit confused and I'm definitely showing my inexperience with this post but here goes...

So I'm figuring that Brianna wants to figure out her ROI (EXCLUDING) the money she is putting to the side for future repairs.

I mean, please correct me if I'm wrong (@J Scott), but couldn't the money she is saving towards future CapEx expenses, just be seen as another monthly / yearly expense and factored into the NOI calculation??

Isn't the NOI another way to find/measure/calculate a ROI percentage?

-> http://www.investopedia.com/terms/n/noi.asp

P.S.

Seems like you guys came to a nice resolution, hope I'm not causing any more confusion on this topic. I'm just still a little lost myself