All Forum Posts by: Greg Scott

@Christina Torres

It did not appear that the problem was the assessed value but rather the ability to qualify for the loan.  On single family properties which use recourse loans, you need both to get a conventional mortgage.

@Taylor Silker

Banks have internal rules and rules the Fed forces on them.  Some times they do things that appear very stupid because they need to comply with some (arguably arbitrary) rule.

Ralph R has a good idea that might solve your short-term loan issue.  Go in with your sister.   The downside, is that would effectively commit you to being an AirBNB landlord.  Do you think you would have as much success renting our place in January as you do in August?   If you think you can get strong rents year-round, this solution might buy you a few years.  If you are not sure, I would cut bait.  Take the loss.  Consider it a good education bought and paid for.   Every investor gets a life "seminar" every now and then.

Of course, you must honor the terms of your lease as it is a legal contract.   Most leases have a clause about how many days a landlord has to give to notify the tenant  the lease will not be renewed.   If there is no notification, most leases convert to month-to-month.     Once you are month to month, you can really change it any time with 30 days notice.

Now most people will want to give the tenant a few extra days to think about things, but you are basically giving the the option to sign a new lease or move out.

One of my property managers also uses an incentive to get them to sign, rather than drag things out.  He notifies the tenant that if they choose to stay month-to-month their rent will go up $100/mo but if they sign the new 12--month lease, the rent goes up only $25/mo.  That can actually be beneficial for both parties.  If the tenant wants to stay 2 more months and then leave, they aren't forced to leave early or lock in a 12 month commitment.

I would find a way to get out of that as soon as you can.   The bank can foreclose on you once your construction loan comes due, even if you are making payments.  Then you will be in a major hole.    Your income is higher now, but most banks are going to want to see 2 years of tax returns to be able to use that to qualify.   So, while it is great that strategy has bought you some breathing room, it isn't a long-term solution.

I don't think there is "the" strategy out there.   There are many strategies.   The key is to know what you are doing and start early.

I raided my kids college funds and we bought each of them one rent property. We put each property in its own LLC and they were a member. We averaged about $25K out of pocket on purchase, but had equity of $40K the day we finished rehab. Each property has cashflowed about $4000/year and the average appreciation has been about $30K.

The properties have kicked off enough cash the kids probably won't need to sell their houses to pay for college  (but that is their decision).  Hopefully they will get out of college and still have a rent property kicking out income.

Electric usually costs a lot more to operate than gas.   But a bigger question is why tankless?

A few years ago the tankless manufacturers had convinced congress to offer rebates on tankless systems.  I did a thorough investigation on costs and efficiency.   Contrary to what the tankless manufacturers have been putting out there, in most cases a good old fashioned gas water heater is actually more efficient than a tankless system.  It is also cheaper and easier to install.

@Daniel Elijah Richardson

The downside of the free events is that they tend to attract a lot of new or unsuccessful investors.    While you don't always get what you pay for,  I've also found that if you are paying a lot for really good education, you usually find yourself surrounded by highly successful investors.  Meet-ups like that can often be more lucrative than the education itself!

The key is to make sure the education is solid and not one of those pressure-cooker sales tactics to get newbies to fork out thousands.

@Nick Rupcich

Congrats on becoming an investor.  Oakland County has many great places to invest.  But all the other counties in Metro Detroit also have great places to invest.   

There is a big education event this weekend that may help you get going... and in the right way.     Lifestyles Unlimited, a huge real estate education group from Texas, is in Detroit this weekend.  I've been a member for years and have profited handsomely from their advice.  I posted details on the event section or you can go to givemetotalfreedom.com

@Nick Yates

Congrats on becoming a new investor!

You can find a good list of property managers for just about anywhere in the US at NARPM.org.  At one point I had single family rentals in 6 states so this site was useful.  In my experience, the ones with more designations are generally better than average.  After all, they have a commitment to the profession.

For years, I have used Richter & Associates in Metro Detroit.  They have been excellent.   

Given you are a newer investor, I'll also suggest what, in my opinion, is the best value in real estate education.   Lifestyles Unlimited helped me turbo-charge my buy & hold real estate investing and I'm easily making double+ what I used to. They happen to be putting on an event this weekend in Detroit.   Check out my posting in the events section.

@Cyle Lublin   Sure.  Monroe would be great.   Many places can be great.     My experience is that homes in the price range from $100 to $150K are ideal.  The lower end homes can be in war zones or have challenging tenants.  Higher end homes don't cash flow as well or have super picky tenants.

If you are just getting going, one of the best ways to get going is to get educated.  Check out my posting for a real estate education event this weekend in Detroit.

@Ashley Gambrell  Getting education first is the key.  REIAs are a good place to start.  I am a non-stop podcast listener.

@Joe Mazur

Best value for the money in real estate investing education is LIfestyles Unlimited.  They happen to be in Detroit this weekend.   $200 gets you a ton of education, and 1 year of ongoing support.   I posted more details in the events section.  Or you can go to givemetotalfreedom.com