All Forum Posts by: Elizabeth Colegrove

I just did a cash out refinance in South Carolina. Closed Dec. 29th and I have 6 properties. The rules literally changed right before we started, from 4 to 6. For once in my FAVOR! lol. I got a 4.85% interest rate. The only catch was I had to leave 25% in the houses. It was a 30 year loan through a traditional mortgage broker. She was so amazing that if we head to Maryland, I plan on using her there too, since shes licensed in MD too . Let me know if I can help.

Originally posted by @Michael Bangsal:

Originally posted by @Colleen F.:

One thing I did not hear anyone mention is vacancy, vacancy is per property so your loss of income is less with more properties. If you have 3 properties producing $200/month each and one is vacant you lose $200/month, one property producing $600/month and it is vacant you lose $600.

Honestly in my demographic I have VERY little vacancy. If you price it right, have a great lease, and stay on top of it. You can reduce or keep vacancy at almost nothing.

PS- that being said, with roommates and officer roommates that come and go frequenty with SCRA you could have a lot higher vacancy (see second for my thougths regarding military)

Great points!

My original strategy was never to sell, and rent it out to Military officers near that base. (This is specific to the clientele I want to rent to) And live off that passive income.

I say this as a military wife AND real estate investor. I love and respect military and believe in paying it forward. Therefore I rent to them. Otherwise I would never rent to them. They are the worst demographic I have ever rented to before especially young bachelors. I would not consider them passive and I certainly wouldn't limit myself to only military service members (I wrote a whole article on this subject feel free to pm me if you want a link). I also don't think as roommate demographic as passive. I would rather more houses with traditional family units versus roommates with smaller house numbers. Same amount of work.

Heres the dilemma: I have the cash to make a substantial downpayment, and in return hope to make a hefty amount of passive income. Or should I leverage tools such as the VA loan (0% down) and acquire more than one property.

Do you have a VA loan? If you go into this with a partnership or have anyone else on the loan and don't plan on them being 50/50 partner I would talk to a lawyer.  VA and California are very strict.

Would you rather manage 3 properties or 10 properties, both earning the same cash flow.

At age 28 I would rather 10 properties, earning the same cash flow because the appreciation, tax deductions and principle pay down and therefore future earnings are MUCH higher.  Plus while the houses are work, I find that I am able to truly make it much more passive over time.

Now if I was 60 and wanted to retire and not think about managing youngin, wanted no debt, than sure I would buy 3 properties but that is a wind down to investing, not get as far as possible.

How would you go about it?

Good luck!

Originally posted by @Jeffrey Giffin:

And now the true question.  Where do we get a copy of that awesome lease?  :)

Unfortunately since I wrote the original lease with Legal Zoom as the backbone I don't give out my lease. I did put together this book

http://www.reluctantlandlord.net/everything-lease-addendum-landlords/

 of all 38 addendums the meaning and the wording. That is what I created and honestly what has made it possible to self manage. It has also greatly reduced not only the questions and phone calls, but also expenses that in my mind should never had occurred but was hard to prove without wording in the lease.

Let me know if I can help!

Originally posted by @Chris Williams:

Aside from the questions asked, if your main objective is to buy the house to rent it out at a later date, you have to look beyond seeing the property as a comfortable home and see it as an investment and what has the best return on your money. Here in Fresno there is a not a big difference of rent ranges from houses in the high $100k's to those in the high $200k's. I personally think your money would be better spent buying a remodeled house just under $200k (93726, 93710, 93705, 93722), than buying something around $300k. Once you all move out and rent the house, you will have better cash flow and a wider availability of potential tenants if you stick around $200k.

Relationally speaking, responsibilities, privileges, and expectations need to be properly laid out. 

I totally agree that cheaper house rent better than expensive ones. We have done much better buying the crappiest houses in the best neighborhood. It is a better rental. not only are the profit margins better but it is easy to keep filled.

Welcome to BP!

My husband is active duty Navy. I cannot speak to the turnkey as we have always ever bought either personal properties or pure rentals but than I self managed them. still I wanted to drop a line since it looks like we have some similar goals and investing style.

Everyone has their own thoughts. While many people swear to these guidelines and have even done better. I personally have houses that rent at .8 or less and do amazing for my goals. My goals is the tenants paying for the house and I put as little down. That way my sweat equity of managing is the added value.

Welcome to Biggerpockets!

Great to connect. My husband and I live in Hanford about an 45 minute north of Fresno. We own 4 houses out here and are closing on our 5th shortly . I absolutely love investing in this area (Hanford/Lemoore) and I see so much possibility.

My husband and I bought our first house at 23 and 25. While we were married at the time, I can honestly say I would not buy with anyone else other than my married partner. I have helped family and even manage for them. Honestly the only way our relationship has not been ruined is that we have no financial ties.

My husband is an officer in the military and I have seen many of his buddies buy together. Honestly they are all trying to sell, get out, or buy another out. It is just mess. Unforutnatlly wives, children growing up made it more not less complicated.

It sounds like you have enough funds to buy. I would personally just buy and rent to your friends. The only times I have involved friends have always turned out unwell. While I am sure you will always find a positive story. To me its just not owrht it.

Honestly I get these types of questions even from tenants who have no desire to ever buy the house. The first thing I have done is get VERY familiar with the local laws. This way I know what is required and not required. You would be surprised how many times THAT has saved me!

Next I have a 38 addendum lease (

https://www.biggerpockets.com/renewsblog/2015/10/17/38-addendums-battle-ready-lease/) this outlines everything al of my expectations. One of the big things is that this is AS/IS.

Lastly I have learned to not only up hold my lease but say NO. This has been key! I have found that once they get an inch they will take a mile. Honestly this is not just tenant behavior but human behavior. Everyone wants the best situation. So if they plan on buying the house, the more work you do the less they have to do.

While you can't do number two right now, it sounds like you need to do number 3 after you know your laws. I tell my tenant no on carpet and other stuff all the time. Good luck!

I watch Zillow for rental prices and I also keep updated on what neighborhoods are hot and the schools that are desired.

Honestly, my time is not worth the energy and time is also money/.. If a tenant is unwilling or to cheap to pay the $15 for a background and credit check, than I don't want them as a tenant.