All Forum Posts by: Doug Minton

@Mike D. @Joseph Romero

All I know is that I see investors going into C class areas to invest for the high cap rates. I would prefer to stay out of those areas after what I went through in Rochester with section 8. 

I'll talk to some of the investors I know out here to see what numbers they are getting. I'll post what I find.  

Interesting question.

I can tell you that I live in West Orange, NJ and the taxes are killing me. Essex county has some of the highest taxes in NJ. With that being said, I wish I had stared out investing in NJ. I actually bought my first rental property, a triplex, in Rochester NY, because the taxes were low and the costs of the properties was low as well compared to NJ. 

I will admit, that if I had know any better, I would have just invested in Newark, NJ, so I could have been closer to the issues I came across in Rochester. I did however, learn a great deal with the investment property.

So, you would think that my next property would be in NJ....NOT! 

After the Rochester disaster, I finally saved up enough cash to invest again, and couldn't afford a NJ property right away, so I invested even farther away, Atlanta GA. I still have that property and it is cash flowing and my taxes are only $700 a year compared to the 15k I am paying in NJ. However, I still don't like the fact that the property is so far away. I do have a property manager, but they really don't do much. So, my next step is to bite the bullet and pick up some units in NJ. As long as they cash flow I won't worry about the taxes. I think it's all retaliative.

Hmmmm! Why not mitigate your risk from the beginning. 

1. Before you purchase the property, have the proper inspections done. This way at least you'd know where to allocate funds if needed. 

2. Properly screen your tenants. Don't just put anybody into your property just to get a rent check. Make sure they don't have any judgments, they have a job for at least 2 years, they have decent credit, and if they have rented before, contact their former landlords. As a rule of thumb, don't just contact their current landlord. Contact the one prior to that one, since the current landlord may give a good reference just to get rid of a bad tenant. 

3. Going forward, allocate at least 10% of the annual rent to a maintenance fund. 

4. Have an exit strategy just in case you pick up a dud.

In my opinion, buying and holding is straight forward and easy to do. I've done wholesaling and hope to do a rehab next year, but after hanging out with investors, they buy and hold buys seem to have true long term wealth. 

Happy investing and keep a positive attitude. 

Welcome Mitchell, you are in the right place. And congrats on your properties. Way to go!

Welcome Jonathan,

I've been investing as a buy and hold guy, and just recently acquired my real estate license in June of this year. You are in the right place and I suggest listening to the podcasts as often as possible. You can get some really good information from real investors and not the gurus. 

Let me suggest one thing. Once you get your license, us it to your advantage. I work for Keller Williams and I found that the marketing plan they use is very similar to marketing as an investor. Take a look at the Millionaire Real Estate Investor, AKA the Blue Book by Gary Keller, as well as the Millionaire Real Estate Agent, AKA the Red Book by Gary Keller. 

Both books will help you set up a plan of action for your investing and real estate agent careers. 

Lastly, find a niche that you can work in like rehabbing, wholesaling, buy and hold, or whatever. Get to know your niche well. Also take a look at the books that biggerpockets had to offer. You will find a wealth of information, i promise. 

Wish you the best in your real estate career, and feel free to reach out to me whenever.

Regards,

Doug Minton

David,

I have the system, and it does have some good information in it. As with any system, however, it is not the system but whether or not the system is used by the person who subscribed to it. Bottom line is that success comes from consistency. This is what I recommend for you.

1. Go to as many REIA's in your area as possible and find the real investors, not the tire kickers, and make appointments to meet with them for coffee. You can gain a lot of knowledge that way.

2. Once you build a rapport with other investors, see if you can shadow them. I know of one investor in my area who will let you shadow him while he rehabs a property. All that is required is to come into the deal 50/50. 

3. Find your niche. When I got started in real estate, I bought a 3 family and managed it myself for a couple of years. Then as time went on, I got away from sticking to that niche and started investigating all the other strategies out there, like wholesaling, lease options, and flipping. I made very little progress, because I lost my focus. So, stick to one thing until you master it.

4. You will find that once you find your niche, and you start to build your business, you can then start to build systems around your business. Building your systems will allow you to make your business scalable. 

5. Take your time. This stuff doesn't happen overnight. Case a point! I have been marketing yellow letters since April of this year. In the very beginning I did receive calls, but no deals were to be made. However, every now and then, I still get calls from the letters today that I sent out back in April. With that said, follow up! The more you touch a person through your marketing, the better the chances are that you will find your deals. 

I hope this helps, and BTW... I now have my real estate license, and I have to tell you that it is starting to make a big difference. Before I had it, a lot of the buyers didn't really take me seriously. Now that I have it, they know I have access to all the listings in my area and now I am working with a few very serious buyers. 

OH AND ONE LAST THING!!!! Listen to the biggerpockets podcasts. They are amazing, and they're FREE!!!!

Best wishes to your endeavors. 

Welcome Terrie. Hey, I used to have a 3 family in Rochester near Irondequoit. The house was on Norton Street. Are you familiar with that area?

Once I put a property under contract and put an inspection clause into the contract. Turns out that when I had my buyers look at the property, none of them would pay me what I was asking, because I purchased the property for too much with the amount of repairs needed. When I went to renegotiate with the home owner, they stated that they were not able to come down in price due to what was owed on the mortgage. So, I was in a bad situation where I would have had to purchase the property. This is what I did.

I went back a reviewed my contract and utilized the inspection clause. I paid $600 for the inspection and they found a defect that I wasn't happy with. Next, I had a contractor come and give me a quote for the work to repair said defect. The quote came in very high, and I used that to my advantage to get out of the contract. Mind you, that my attorney told me that I would never be able to get out of the contract. However, I made sure that in that clause I stated that if I found anything, I mean anything, in the inspection report that I didn't approve of, that I had the right to cancel the contract.

So, I learned a few valuable lessons here. 1. Always find out what is owed on the mortgage before getting a property under contract. 2. Always have an inspection clause. Not that you need to inspect the property, but it can give you an out if needed. 3. Never purchase a property AS IS, but always sell it AS IS.

I am a licensed agent in NJ for Keller Williams. I would suggest that you go to a Keller Williams agency and interview some agents there. Keller Williams is an investor friendly agency, and it was through them that as an investor, I was sponsored to get my license.

Here is a link on biggerpockets that can help you with choosing the right agent.

https://www.biggerpockets.com/blogs/4518/blog_posts/33002-how-to-find-an-investor-friendly-real-estate-agent-part-1-of-2

Hope that helps.

@Jacob Forbis Understood! Also, mistakes are good as long as you don't repeat them. Consider them learning experiences. When I first started, I made mistakes as well. One costed me over 40k in losses. If I didn't have an exit strategy, it could have been much much worse. With that said, you may want to think exit strategy if you think it's going to be a challenge renting if the unit turns into a vacancy. Reach out to other investors in your area for their advice in that market. They may even be able to take the property off your hands if you are looking to exit.

Whatever the case, don't get discouraged. Just keep rolling with the punches.