All Forum Posts by: Joseph Gibbons

I disagree.  Its not turnkey if its not turnkey.  If you want to invest soundly in the Cleveland market or any market you need someone on the ground that is not spread to thin and has a firm grasp of their capabilities to deliver.[post edited]

@Christian Carson You are the man! I can tell by the way you talk about the emerging awesomeness that is university circle etc that we are on the same page. My buddy's uncle a few years back bought two houses on a street right next to case and put BIG money into them. I was like, what are you doing?? The houses were gorgeous, amazing floors etc. He looks at me and said, this is for med school students and law students from India who pay cash and don't jack up the place! Amen. I totally agree that if you put in the money up front to get the best tenant in the area it will pay off in less residual *** pain. I am all for that. I have seem some Fannie Mae properties on the fringe of Cleveand HtsI really like but I need to get some more cash before I try to swing that way. The point of sale violations assumptions is to much for me to handle in Shaker/Cleveland Hts at this juncture. Baby steps...

In Alaska it might be expensive to heat the water continually during the colder months so that might raise the water bill. It really depends on your desire, the water bill and what your tenants feel is reasonable and fair. I hate diming people to death but $1.00 for wash and free dryer or some combination that leads to $.75-$1.50 with the more expensive one being the washer. Thats just my opinion.

@Andy Robinson I am certainly running my numbers very conservatively regarding all variables. PM is definitely in the future because next fall I will be going back to school full time and I am in not in the mood to take a 2am call because the toilet is jacked up. I have a buddy of mine who is pretty handy and is open to working with me on A. building up my own portfolio and perhaps managing them for me when I need to focus on school for months on end and B. through networking and experience become competent enough to start managing other properties. I already am looking at taking the realtors exams etc to eliminate costs and as an added tool set/knowledge base. I appreciate all the advice thus far. I am certainly going to be looking at joining some REIAs, the advice alone seems to be worth it let alone potential hard money lender connections as well as wholesale connections both buying and selling.

Ronnie, I don't have specific comments to your situation but I do have questions and or thoughts. This entire concept of wholesaling and the people who feel entitled to the profits that are potentially found in them is funny. If you can swing a deal, great. Sounds like a legal HUSTLE. You "agree" to buy something with "exit strategies" aka the buyer is 100% committed to you and you essentially owe nothing to them. Wholesalers in my area often just do this to tie up houses and if they can't find a buyer… they walk. Am I missing something? Clearly this is legal but so is derivatives trading and bad debt swaps.

The only caveat is yes there are more desirable neighborhoods etc but at the end of the day I have to buy where I can afford to get my foot in the day. I'm sure there are some real cash gushers on the Upper East Side of Manhattan but thats not in the cards right now. Like I said, first property I want bought and fixed with sweat equity for under $40-45k. I know this can be come and in many cases I have seen it done for less and for units that then produce $450-$500 for a 2b/1b so $900-$1000 for the duplex total.

@Christian Carson : I am from Shaker Heights, I would love to work my way up to a multiunit or a few in the Coventry area. Christian, after I get past my first property and want to put additional ones under an LLC do you practice in real estate/contract law?

Yeah that loss to the Pats was tough, some real questionable calls by the refs as well! Any recommendations on neighborhoods? @John Ellis

@John Ellis undefined I am going back to school and thus will have a break in income and cash is where I feel safest right now. I want to have a rock solid base to build on but I am totally on board with what your saying in principle and had myself considered doing that as a part of broader plan. Because of the VA loan, patriot loans for small business owned by vets and other programs I have some good tools in my box but I don't want to use everything up. I think paying in cash the first one all the way through and having some room for inflation of costs etc and then adding the second on cash after sufficient cushion has been saved up. (I am conservative so I will go with ten months rent in cash in an escrow type account for each property before funds can spill over into general cash/acquasition fund). Thats how I plan to roll and do this under an LLC. You are totally right though about the VA loan. I plan to buy the first place as an owner occupier and live in one unit, rent the other. After a few years I can then 1031 the proceeds from the sale of that house to upgrade my personal residence all the while continuing as usual under the LLC. I will remain flexible and speak with a qualified attorney and accountant before I sign anything.

Just left the Army to pursue my degree with the GI BILL and looking at getting a duplex at first and then a few more as funds become available. Heres how I see the first deal looking. I am interested in owning rentals, leverage, property management and long term I would like to do development on a larger scale as in doing my own commercial spaces or large scale residential.

Ive been saving for a few years and just got back from Afghanistan so I want to purchase a duplex and over the next year add unto three. Based on the market for a solid starting point Im looking at around total budget of $40-45k to purchase and rehab a place that puts out about $550 per unit at $1100/month.

I would be paying cash, yearly taxes vary from $1800-$3000/year. I will screen and place tenants personally for the first two years.

So finances in abstract look like this. $45,000 in. (20/25k break down between purchase and rehab.)

$1,100.00x12 = $13,200

$13,200 - (3k tax, 3k maintenance, 1k landlords insurance, 1k misc expenses)

$5,200 gross profit per year. Pays off in 9 years.

Im looking at MLS, craigslist, fannie mae, freddie mac, hud and word of mouth. Any other outlets I should consider? Other advice. I plan to let that first property add up rent for a year while I get another one up to speed and depending on cash flow, cash balance and how solid I am feeling with the tenants I have and the character of the houses I bought (are they sucking more or less money to maintain as I expected?). After a year or two I can use cash and leverage each asset by maybe 50% of appraised value to make a bigger purchase of perhaps a larger multi unit property etc.

By that I mean an LLC is simply the credit rating of the members at first until a company then establishes its own, I just think that if theres a system that creates LLC for resale for the sole purpose of having good credit lines… seems like credit fraud to me.