All Forum Posts by: Edwin Williams

@Kanwar Sodhi here's the deal... Whatever your concerns are... address them directly. If you are worried about big ticket items failing early have each and every one of the items inspected by an independent inspector.  When you buy a property you have to limit the unknowns. This way all your doubts can be removed. Your concerns are valid but you want to move forward with verified information.   If you find out there's time before these items you are worried about fail then you are good to go. People are always going to scare you with the worst case outcomes but you have to open that door and take the chance. Have a lawyer review what you are doing and go for it. Put your property manager on a written contact and go find your next deal. 

@Isiah Ferguson I believe in having a large equity position in a property. Over 25% but if you can buy right say 1.5% rent to price then there's room. I think 1% is too tight if things go south, but that's just me. I'm really in the minority but being all in 100% equity isn't a bad thing. Here's my reasoning 100K in the bank returns xx% (a pretty low number). Put that 100K in a building and get 1% rent and that's 12K a year MINIMUM on your money. That's 12% on your 100K. Not a bad return compared to the bank. It's a slower way to grow but it gives you all the options in the world. 

@Michael J. Great question!  Being leveraged to the max is great in the market we are currently in. But cycles change  and I'm guessing things are not going to get better than where we have just come from. Once we start having vacancies ( dooms day thoughts) it's going to be really hard to cover negative rents on multiple properties. I'm figuring all cash and fully leveraged is not the way to go. But we all need sleep and the more cushion the better. Even though you may not maximize the leverage having more cash flow is better than less. My pillow is about $300-$400 plus per door and get to the mountain top a little slower. I got killed leading up to the 2008 crash with vacancies. The only way to cover is to drop the rent and when you can't, there goes your sleep and the properties. It's been pretty easy for anyone buying since the last crash in 2008. It will not always be this way. 

Here's an issue!! Lenders/Banks are going to want to wait 2 years after you have discharged the bankruptcy before they will lend you any money. This means if you want to go to a bank  you have 24 months to go. Sucks!!!!

Keep saving!! Don't do anything too desperate until you are free and clear in 24 months. If you can land a deal just plan to refinance it at the end of 24 months. Keep going!!! You are almost there. CONGRATS on getting this far. 

The window has condensation, this indicates the seal has failed which can happen without abuse. How can you prove the window was damaged by the tenant? The AC is not working again how can you prove the tenant damaged the unit? Get a "window specialist" and a "AC specialist" to support the tenant caused both to fail. That's going to be slim to none to get that statement supporting that assumption so you can convince a judge the tenant damaged both.  Save your time repair both and move on. Write it off on your taxes. 

https://www.biggerpockets.com/users/JLH Great Great post!!  That's exactly what I experienced in 2008. I had  rentals in Kenosha Wisconsin and what Waukegan Illinois, I would say C class neighborhoods. Blue-collar workers.  Once the crash started to develop I could not get quality tenants. My theory is the strong homeowners just dropped rents and got the good tenants. If you're not financially strong or you can't drop the rents as was my situation you're in for long term vacancies.  I always read that rents don't fall but in some markets when the market softens landlords will drop the rents to attract the tenants.  Of course all markets are different but that was my experience. At the same time in 2008 I had a A class property and the rent rates went up and were solid because people were losing their homes I wanted to live a nice neighborhoods. I say defence is the best offense in real estate. 

Very interesting thread here. You made and offer that was accepted on a property that had tenants. You did your due diligence, the property closed and now you want to remove a tenant who has a lease in place because you are not happy with the rent level. Here's my advice. See what you can do legally from a legal entity not here on this forum. Understand as a landlord you have a responsibility to your tenants that have signed leases. 

I've done this process twice in Cleveland. With the first house the plan was I pay 85K for the house. The contract with the Turnkey provider is solid where any overruns are covered by the turkey provider.  The house was abandoned and needed a complete rehab.. The roof was fine.  I bought the house for 45K.  The title company holds the money for the rehab and only releases installments on my approval. The house was completed and they got me a tenant with a 2 year lease, that was 14 months ago with no issues. The house appraised for 112K and I pulled out 76K. The second house was the same deal but I paid 75K to the Turnkey provider and the house cost 14K. This house needed a lot of work. I have not got it appraised but I'm guessing it will come in around 105-110K. No tenants yet. Everyone made some money with these deals. The Turnkey provider has no out of pocket money in the process. If you have a good contact and can find someone you trust it is possible.

I agree with both of you about Justin I would purchase a property from him but you are past Justin's services. I agree he should be helping you which he's doing but the PM is for some reason  is not making you a priority. To have yourself and Justin work this issue with the PM is not good. My feelings are Chicagoland has a fair amount of experienced PM companies that would love another customer.  It's not the PM fault for the condition of the property, but I can't understand failing inspections. That's what they do every day...deal with section 8. I would expect the PM would say based on their experience it's going to cost $xxxx.xx to get the property rented you pay the bill and move on.  This back and forth is not cool because each month that goes by cost you money against your next deal.  

This is a hard posting to read. Can you cut bait from Letts? They seems to be costing you money. They deal with the city every single day. They know the rules and the condition of the building and what's needed for a building to pass inspections. They are not doing right by you or the building. Why would they schedule an inspection just for it to fail. This is very strange. I nearly signed up with both PFR and Letts and few years ago. Strange no one else on BP has reported any trouble with either. This is all very strange. Good luck!! ride this out and hope this is your worst one ever.