All Forum Posts by: Blake C.

Tenant A: Individual with high paying job over 4x rent. Recent college grad that is on a 14 month contract at a local defense contractor. This place only hires solid people and does strong background checks. He is from 4 our away. He also wants to get a lab puppy and train it. Sounds responsible and wants it to be an outdoor dog. If I don't let him get the dog, he will be out or not stay long. Limited credit history but nothing bad... not really enough time for that to happen. Tenant hasn't seen the house in person yet, but is coming Thursday. Thinks he will like it from the pictures.

Tenant B: 1 working adult family with medium income job. Over 3x rent. Have two "outdoor" chihuahua and pug mix. Have a longer credit history but defaulted on some student loans when they were young. Have a recent track record of making better decisions. Tenant feels strongly about the house because its across the street from the park and will be a good place for the family.... may be they will love it and stay for a while. 

Typically I really try not to take dogs. I like both tenants but I am struggling getting over the dog issue. I haven't advertised it that much yet, and I got two decent options. The house has freshly refinished hardwood floors and tile in the kitchen. I just want to protect the integrity of the house. If I accept the pets they will pay $75 Pet Fee and $25 additional rent. 

We send out $25 to Target with a Christmas card if they have been in good standing all year. A good tenant and a lease renewal pays for this more than 10 fold. 

your first rental should count as income after it has had renters in it for 6 months. You will also have to have 6 months cash to cover PITI set aside for that property as well. If those thing are meet, you should be able to get a mortgage on the new property without much issue.

I have stopped asking for and taking advice from people that aren't in the position that I want to be in. If they aren't achieving what I want to achieve, what do I have to learn from them. 

Wisdom tell you that you become like those that you are close to. Some of my family and friends do not manage their money or time in a way I wish to do. Therefore, I love and respect them, but I don't discuss these matters with them. Even if you aren't a Christian, the words of wisdom of the Bible state, "Do not speak to a fool, for he will scorn the wisdom of your words." Proverbs 23:9. While they may be stating truth, they also may not fully understand the truth. Find the truth in their concern, run it by someone who has the full wisdom and experience to help you accurately evaluate the situation. 

Be wise. Think before you act. Find the truth in all criticism. Do what you can to eliminate risk. Seek advice... but the right advice. And at some point you have to stop letting the fear of striking out keep you from playing the game. 

@James Russell I haven't done an assignment here. Call around and ask. I have used 3 different title companies in town and had a good experience at all. 

Im not trying to discourage you from assignments, as it can be a good strategy, but the reason why I haven't pursued it yet is that it seems a little challenging when you are just starting out. To do it, you have to be able to find a good deal, know why its a good deal, market it quickly enough to assign it, and have buyers looking for your type of deal. Thats a lot of steps to tackle in one shot. Starting with a flip or a rental requires a few less steps... or at least steps that might be easier to learn or more natural for a newbie. May be you are better than me, but I learned quickly I didn't have enough experience to pull it off. I have settled in at getting my feet wet at buy and hold (rent) until I get more experience. 

@Cecil Russell You have received some good advice about hanging in there. Looking for mentors is also a good thing. I am in your area, but probably not at a point where I have enough to offer you. It took my to 9 months to find my first deal here. 11 months after that my second. 4 Months more and I had my third. I go with the patient route. I did tons of reading in books, listened to ALL the BP podcasts,  and read 5-10 articles/blogs a week on BP. All those things have given me virtual mentorship. I've learned what strategies I not only want to pursue, but am able to pursue with my knowledge, experience, resources, and time.

After developing a track record of three rental homes that cashflow and talking to my friends about it, I was able to build a little bit more credibility amongst my peers. Just yesterday I had a friend that has a few rentals offer me private money for a forth deal. I say this not to brag, but to encourage you that its a slow process, but I feel like the progress is more exponential than steady. As you gain knowledge, experience, respect in the community and such, things will happen faster and faster. If you give up, or make a bad investment/decision out of impatience, it will set you back more than studying a little more. You cant let that lead to analysis paralysis, but after two months, you aren't at that point. 

Pursue the LBK deal. keep your eyes open, and your ears tuned in here. You will do a deal soon enough! 

@Cecil Russell Welcome to BP. You ask as good questions about lease-options in Texas. I have been a part of one, but the rules have changed in Texas in the last decade. A google search can tell you some about it, but this is one that I highly recommended seeking out strong legal advice before moving forward. Some info can be found here: http://www.lonestarlandlaw.com/Lease-Options.html 

@Michael Wintercorn You are going to have your best luck shopping around with Local lenders. You will likely need to be looking in the commercial, not the mortgage department of the bank. You could be able to get a signature loan depending on your situation and relationship with the bank.

Also, start hunting for deals. When you find a good deal, the money will likely come next. People get motivated to lend on great deals, not average ones to people with a less than perfect financial statement. Who knows part of the great deal might be that the owner is willing to carry. 

Stay hungry. Good luck. 

@Heath S. said and you alluded, its not for all markets. In April of 2013, I paid 47k for a house that needed paint, cleaning, and a new tenant. It rents for $850. This house was probably worth closer to 60-65K but I got a solid deal from an investor that wanted a quick exit and didn't have to pay realtor fees. Thats as close as I got here in Amarillo. Its not a $500 a month rental, but its in a lower class B neighborhood. 

In a true working class neighborhood here, you would pay 70-90k for a house that rents for $975-1150. Again, thats not the 2% rule. My rule is that it needs to be over 1%. I focus more on cash on cash, equity capture, and monthly cash flow. 

I have seen a few deals that meet the 2% rule, but they usually are in low end properties that require more management and hassle than I am typically inclined for. Honestly, if it meets the 2% rule, I would ask two questions: 1. Do I really want a house in this area? 2. Does this house need so many repairs that it will require enough rehab that its going to push it well below 2%. (Thats okay, but its not truly meeting the 2% rule). 

@Account Closed I noticed one of your exits is lease to owns. This can be done in Texas, but its pretty tricky. I suggest you talk with a RE attorney before counting on that as a effective strategy.