All Forum Posts by: John Bowen

I have seen the American Homes 4 rent buy an average of 4 properties every month at our little local county trustees sale. Just about anything from $60K to $100K that has a reasonable starting bid. This has been going on for at least 6 to 8 months.

"Trust, but verify."

"To those that much is given much is expected."

"When your in a hole the first thing you do is stop digging"

If your paying cash just a decent 10 to 15% EM and proof of funds should help. Fannie Mae normally won't budge under 85% of asking. They have some guidelines they are bound by. You may have to wait on another price drop.

I can tell you this, I have alreay axed a couple of marginal employees in my service business this week. If I am going to put up with the BS involved with customers and employees it's going to be the good ones for a good return. Culled a couple of high drama marginal return customers as well.

Really starting to wonder about the whole S corp thing where all of the companies profit shows up on my tax return weather it makes it to my bank account or not.

When the passive losses from some investments don't do you any good because you reached a threshold level it makes you wonder why you got in that deal in the first place.

Is it a project that will eat up a ton of your time and keep you up late or a deal that can run well with limited input?
I find that to be a big deciding factor on some of our projects. If it takes up to much of my time from my day job where I earn the cash for these projects I have to pass. I expect to earn 20% minimum on anything we do.
Of course we are more buy, rehab, and hold people along with using our own cash and doing a refi afterwards too.

Having purchased and rehabbed hurricane houses here in Texas, we look at flood zoning as part of the purchase formula. Even though the houses near the water stay rented well we like to spread them out a bit some so that if a big storm comes we do not have as big a percentage damaged, hopefully anyway.

We made our monthly county trustee's sale today. Pretty quiet. About 150 properties on the list. All got canceled except 26. Of those 1 was purchased. All the rest went back to the lender.
In chatting with some of the other investors and one of the trustee's it seems there will be a big wave of properties showing up in February and March. Seems they have a lot of paper pushed on them all of the sudden from the lenders.
Might be a good time to show up at the court house on the first Tuesday with a stack of cashiers checks.

We have one that got in trouble, came to us with a plan and some funds. We helped them adjust the plan a bit and they paid off the check that bounced over 3 months while staying current on the rest.
They are both teachers. Their pay date was adjusted to the 4th this school year and we adjusted the due date for them. They do take very good care of the house. It is always spotless and the yard looks manicured.
We will work with somebody that actually comes to you when there is a problem and takes good care of the place.
One of my commercial guys is always 1 day late and it drives me nuts. His lease expires on the first and the rent on the new lease goes way up. ( I inherited this one when we bought the complex.)

Anybody lease to a tenant who's business requires getting a liquor license? We have a prospective tenant for a 6,000 square foot flex space that will need to get a state liquor license for his business.
They are caterers of sort, they put on these big festivals at parks and fairgrounds. They need a physical address bar in order to sell beer at these festivals. Supposedly 2 bar stools, a mens and ladies bathroom, and one beer in the fridge.
The need the big space to store their equipment, prepare for these festivals, and office use. It is a custom hot rod shop on one side of the space and a diesel engine business on the other side. (Ours, my main business. )
The state requires a large sign be posted on the door for 60 days regarding the application for the license. The prospect does not want to sign the lease until the state approves the location. We have worked out a fair deal regarding the lease rates and build out they will do as the spot currently has a terrible lay out.

We have owned the place for 6 months and this is the only serious tenant so far. We don't need it leased, but some extra income and somebody doing a nice remodel would be good. (I have put some strong wording about the build out approval, plans, insurance and such in the lease.)

Thoughts?

We bought a 25,000 square foot complex in Texas this year and it was very clear that nothing survived closing. It was a forclosure, handled by an asset managment company in Maryland. Working out the contract was the biggest headache. It had to be on their contract, but we did get many of the absurd conditions struck.
As they had very little knowledge of the property I could understand their reluctance to stand behind anything regarding it.
Our EM was refundable until we finished DD or at the end a set time frame. I did have to wire the EM to their title company in DC.
It was a rather complicated deal, but well worth it when done.