All Forum Posts by: Fred Cannon

@Stephen Spearman even in the best of times I am not in favor of showing an occupied unit. I have good photos of every room and outside as well. I don't mine drive by or walk around but during a move most tenants are not concerned about keeping a nice appearance. I think the first impression is the one most people go with. I would rather get the tenant out get the unit cleaned the next day and then show perspective tenants. My tenants prepay cleaning fee of $200 dollars so they will not be doing much in the way of cleaning up to show the unit. I budget two weeks to clean unit, make cosmetic repairs, return deposit and find new tenants. It only happens every two years or so per unit and it's just easier on everyone.

@Haley Powell, I think condos are great investments, especially on you live there first and then rent out later. Just do your homework and make sure the HOA is funded well to cover any big maintenance issues that may come up and the condo is in a desirable location. I have six condos as investment properties. My niche is 1 bedroom one bath for several reasons.

1. Less HOA fees usually based on square ft

2. Less wear and tear equals less maintenance cost. When I buy I rehab kitchen, bath, and floors to bring up to date. Increases rent plus increase value and minimizes future repairs. Once I buy and rehab I am good for 10 years with maybe a few appliance upgrades. One bedroom usually means one person.

3. One bedrooms give a higher rate of return on investment.

4. HOA fees are offset by less exterior maintenance and insurance fees. I have rental homes as well and they can and do require a lot of upkeep Lawn care $150 a month, insurance 3 times what a condo is, painting of exterior, Roof issues or replacement. Just a long list of things. Families rent homes more people more problems. Single people like yourself rent condos

5. For me I have a higher ROI with a condo when all things are factored in. I only have experience with one-bedrooms and don't really expect to ever invest in anything else but one bedrooms in the future.

My only other advice is to not overspend. Remember the mortgage goes on for a long time Save until you have a minimum 20% down. Rehab with cash, short term credit is too expensive, and don’t go cheap on the rehab.

@Erin Dorsey Robinson. I have a couple of tenants who have lost income and basically have cut their rent by 50% or more in exchange for an extended lease. I am getting enough to cover my expenses for the most part from those tenants who can’t pay the full amount, unemployment is kicking in and the stimulus checks should get there soon. I will not evict anyone who has lost income and don’t really expect them to repay what they can’t pay now as long as an effort is made to pay partial rent I will be OK. I prefer to keep the tenants than have empty units.

@Ty Doke Looks like to me you don’t have much skin in the game as the saying goes. The guy that is investing with you is putting up all the money and foolishly taking all the risk. I would not even do a deal like that with my brother. I have partners in a few deals but it’s all equal as far as money invested. Personally I wouldn’t want to be on either side of a deal like that, but that’s just my view. Good luck to your partner.

@Jason J.i look at it this way, the chance of getting a new tenant is slim. I have cut my rent if half for those that have lost a job. With unemployment they should be able to pay. I am not putting anyone out on the street. I can do this because I don’t have mortgages. If you are leveraged then you are in trouble. For those who say the tenant should have enough saved well that’s a two way street. Hopefully everyone will recover soon but this is a lesson to all of us. CYA when you invest in rentals, something like this happens on a major scale every 10-15 years plus evictions every couple of years depending on how many properties you have. Leverage is not your friend and neither is the banker.

teach investing in real estate without taking on debt. It is a very unpopular opinion, but it works. For those in the thread above (I haven't finished reading it, admittedly) who say it's impossible for the "Average American" to invest in real estate without debt that's not true. I've taught many people how. You start small (or with non-debt activities like wholesaling or deal-making) and work your way up.

I started investing this way after the market crashed at the same time as my divorce, leaving me with over $845K divorce debt. Most of that was from over-leveraged properties such as the house owed $405K that was now only worth $180K and not federally backed so I couldn't take advantage of the assistance programs. NEVER AGAIN!

JJ Conway

• JJConway.org
  
• JJ you are one smart cookie.  I have made several post about using partners and not banks to buy real estate, most disagree with not using leverage but every 10-20 years there is a correction and those who are heavily leveraged will get no sympathy from banks.  They look to people like me and my partners to bail them  out for 25 cents on the dollar.   That circle may be coming soon. I hope not because too many people suffer but too many people have very short memories or maybe are too young to have enough experience.  Keep on educating we need all the knowledge  we can get. 

@Joe Carter

Hey Joe you are going to fast. Slow down a bit. You got way too much going on. Cut up those credit cards, don’t do flips unless you have the cash you don’t need mentors or RE guru’s. Common sense and common math is the name of this game

1 voteWho voted?

Out of curiosity, why do you think having two equal, vocal partners is better than one silent partner who only expects to get paid and lets you make every other decision?

JD Martin

• Skyline Properties
• Podcast Guest on Show #243

JD A lot of reasons to have a partner Or two over a mortgage.  

1.  Repairs and rehab cost are split  Say I want to remodel a kitchen or replace flooring, it only cost me 2-3 thousand instead of maybe taking out another loan or depleting my reserves  We can fix up the property and maintain it so much better   Of course you need partners of like mind 

2.  Vacate cost is minimal and then is split   With a loan ever month of vacancy cost is a major expense   Without a mortgage it’s minimal plus it’s split with your partner

3,  the bank takes a big chunk of your profit with principal and interest.   You basically lose all your appreciation to the bank loan. property goes up 3% a year bank loan is 4-5% a year so you are losing or paying the bank you appreciation  with a partner you split the appreciation

4.  my business plan is to generate income with little expense because I am retired.  Plus I like the partners I have.  I can go to bed at night and not worry about bank loans or stock market crashes or vacancies. The two or three people I have to partner with are retired as well, gives us something to do and talk about.  Real Estate investing for seniors is an untapped resource. Most Of us have our savings invested In low paying returns because of fear of the unknown. Exactly what’s going on today. The risk in real estate is a whole lot less when you don’t have Bank loans.  

There you go.  So tell me the advantages of having a mortgage over having a partner or two.  

@Marcus Johnson

I have always tried to be mortgage free. I think having a couple of partners and each kicking in a third is better than a third down and being partner with the bank I have 8 properties and only one mortgage on my original home that is now a rental. I also have a partner on 3 of the rentals

Investigate one bedroom condos in an area with good demand. Less cost less maintenance and around 12-15% return after all the bills are paid .

@Arthur P. I will just say this about being a landlord. If you don’t have reserves to cover you for a couple of months you need to sell your properties and invest in something else. In times like this if you think you need to evict a good tenant that may be facing a couple of months of hardships but is certain to recover then you should think about investing in oil wells or gold bars. We are a people oriented business and our clients are not just a customer they are partners. A good tenant brings you more than rent. I have no problem getting rid of bad tenants but I will do everything possible to keep a good one even if it means helping them through a crisis and losing a few bucks in the short term. Not saying that it always turns out good but without risk you get no rewards