All Forum Posts by: Drew MacDermott

@Mike Frelund  That's a great start!  It sounds as though you have some background already.  If you haven't yet, check out all the Beginner Guides found under "Education" to continue your learning of relevant niches you are interested in.

Yes, find local REIA clubs. Start attending those to introduce yourself and what you want to accomplish. Once you find your real estate agent, have him/her send you listings every week or every day and analyze every one of those leads. Eventually, you'll find one that meets the criteria that YOU set for YOUR business. It appears you want to flip property, so what is your desired minimum profit per deal? Do you know how much the repairs will cost? Finding multiple contractors to supply bids will help. Buying significantly under market price will give you equitable breathing room should anything happen to the property (i.e. repair costs blowup, can't sell the flip right away).

Best of luck!

My business partner and I have decided to sell our SFH investment property and have notified the tenant. They have begun to search for other apartments. After going through the pre-sale inspection with a realtor last weekend, I found that once the kitchen sink cabinet was opened, the entire cabinet has water damage and is destroyed. The back is bulging toward the center of cabinet and the base has collapsed to the floor. Replacing just the base seems to be impossible at this point due to the damage. You can also see superficial corrosion of supply line connections.

Being that we are both long distance, I have had my dad (local to the property) help with occasionally coordinating with maintenance requests.  In this case, it appears I was unaware of a leak that was briefly mentioned in an email he sent to me for a previous sink backup.  During the previous backup, he noticed one of the PVC joints leaked when using the garbage disposal.  As I said, it was a brief mention and I missed it. We will be taking the financial responsibility for repairs.  I now have the tenant keeping towels in every possible location and a fan to reduce moisture.

The next step is when to repair the cabinet. Since we are selling, the timing isn't perfect but wanted to hear your thoughts.  I'm also worried what I'll find behind the counter and on the wall.  I could:

1) Repair it now with tenant still occupying, but this is a very small house (1.5 story bungalow, 800 SF) and I feel like the time to have a contractor come in would displace the tenant temporarily.

2) Give tenant 60-day notice and repair before selling (that is probably the realistic time frame they would move out anyway.  State law is 30-day minimum.)

3) Keep area dry and wait until they move or house is under contract

Thanks in advance for your thoughts!

@Chayanne Maldonado, I'm up in Lebanon, NH so I don't know where the Nashua meeting is - Nashua is just outside my travel range.  However, I have been to several NHREIA meetings in Manchester.  As I mentioned previously, their meetings are at 6:30pm every 2nd Wednesday of the month and they are located at the Best Western past the Mall (13500 So. Willow St., Manchester). Free for members; $20 for not-yet-members.  I'm sure a simple google search can get you much more information on them.

Another tip for you - There is A LOT of information here on BiggerPockets and in the investing arena.  Read up on the Ultimate Beginner's Guide we told you about and think about which niche you want (Single Family, 2-4 unit Multis, 5+ multis).  Talking with other investors and real estate agents in your area might help define which niche works best in your local market.  Once you find a niche to start in, focus on that one, get good at it, then expand your horizons from there.

The first step is jumping in!

Welcome to BP, @Chayanne Maldonado! I believe there is an Investor meet-up in Nashua, and perhaps a few members attend that monthly. There is also a NH REIA meeting every 2nd Wednesday of the month in Manchester. Check those out!

As @Account Closed mentioned, read the Ultimate Beginner's Guide to Real Estate Investing to get started.  Great information there.   Begin to think about what niche of RE investing you want to get into.  You mentioned you are going to pursue your Real Estate license and that is a great opportunity to network with others in the industry and to save on commision costs when buying your own properties!

Happy investing!

Great advice, @Sean OReilly & @Matt Lefebvre! Thanks.  Looks like this one is off the table for now!

Good afternoon, fellow BP'ers!

My wife and I have lived in the area for a year now and I have interested in purchasing property due to two factors - 1) Dartmouth College next town over and 2) Dartmouth Medical Center just up the road, both supplying a high number of tenants. I have been watching the MLS and found one duplex that was listed at $200k several months ago and just came back on the market at $175k. I am not ready to put in an offer and have not confirmed the numbers yet, but here is what I have calculated for practice. The biggest issue I see in NH are the high property taxes - I'll have to offer much less than asking price.

Property is in good condition and would probably need $5k in cosmetic repairs.  I would love to hear your thoughts on the potential that this property has.  

Total Current Monthly Rent $2,400

Purchase Price: $140,000

Down Pmt: $28,000 (20%)

Closing/Holding Costs: $3,000

Morgage Pmt: $550 (4%, 30 yrs)

Taxes/Insurance: $625

Prop Mgmt: $240 (10%)

Repairs/Maintenance: $240 (10%)

Vacancy: $240 (10%)

CapEx: $168 (7%)

Water/Sewer: $83

Lawn/Snow: $42 ($500/yr)

Electric is subdivided. $0

Oil possibly one heater.  Current expenses are $7k per year, seems very high.

Current Cash Flow: -$371

I've done some research and it looks as though to install two separate propane heating systems is about $10k.  I could upgrade the units to a Rannai system in order to remove the current $7k oil costs.

Cash Flow with Tenants paying heat: $212

[Expenses per MLS Listing (Assuming annual)

Insurance: $2,033

Heat: $6,912

Water: $980

Snow Expense:350

Maintenance:1,650]

Bringing this thread back to life!

@Kristin Whitaker I'm just curious, did you have experience with any of the free websites to create a handwritten font? 

@Zamir Kazi Great tip!  Maybe I'll try sending your scanned yellow letter style to another focus area to compare results with a font.

@Christian Sgrignoli First off, congratulations on your new investment!  

What are you wanting to track exactly?  A simple Income/Expense sheet?  Computing returns?  Excel worksheets are fairly simple to create and intuitive once you understand the cell references and formula process. One great resource I use to learn more tricks is the Youtube channel - Excel Is Fun (https://www.youtube.com/user/ExcelIsFun/playlists).  Disclaimer - I am not affiliated with him and do not receive any compensation for promoting.  I've also found some cool spreadsheets online.

If this is an April Fools joke, it would be a terrible one.  

I am not from California but find this to be one of the most dire situations today, not just for California but for our country.  The Governor has issued an executive order to reduce total state water usage by 25%.  While there have been voluntary restrictions put in place in the past, I believe California and other Southwesterly citizens need to take immediate action to help reduce water usage to re-supply lakes and aquifers as much as possible.

"In addition, Brown's executive order will:

http://www.cnn.com/2015/04/01/us/california-water-...

What are California landlords and developers currently doing to mitigate water usage at their properties?  How will the mandatory restrictions impact your business?

I look forward to hearing peoples reaction to the Governor's Order.  

Johnny,

There are many 'models' in the FilePlace available for downloading. Every investor is different and will use a separate criteria for their strategy. From what I've seen, most people are using Cash-on-Cash ratio, ROI or Cash Flow ($100 per door, $150 per door) as their Go or No-Go numbers. You'll have to use the numbers that work with your strategy and lifestyle.

Be sure to account for the following expenses in your calculations:
Vacancy (10% of gross rent)

Management (10%)

Maintenance (10%)

CapEx (generally 7-10%)

Electric

Oil/Gas

Water/Sewer

Trash Removal

Snow Removal/Lawn Care

Legal Fees

To find deals that make the numbers work, you may have to explore outside of your immediate area to a 1-2 hour radius. I know properties in my area are very expensive compared to rents, and I am trying to find how to make my own numbers work here. It sounds like you have your spreadsheet model basically created. My suggestion would be finding at what price point your numbers do work and to start putting offers in. You can also find motivated sellers where prices will be at larger discount, instead of using the market priced MLS.

Remember:  Every deal is different and unique.