All Forum Posts by: David Mirza

You should charge more for a 6 mo lease.  If a tenant moves out after 6 mo., you will have to find a new tenant after that and your house will most likely be vacant for a month or so, depending on your market.   It is harder to rent a house in January vs. June, but my experience has been that it isn't a huge difference.  My main concern would be the vacancy between tenants, and cost associated with a tenant moving out like paint and cleaning.   That being said, there is a price for everything.  Figure out what makes sense for you and give it a shot.

I had a company contact me about a 2 mo. lease with option of month to month after that.  I added $600 a  month to rent in order to account for the above mentioned considerations.

Wow... first of all your PM is either really crappy or your properties in Indiana are in a bad neighborhood.  I have 10 rentals for the past 4 years and never had to evict a single tenant.  The most damage I had was a few thousand by one tenant, but that was a one off.  I have never dealt with a PM but suspect that is probably your problem.  Regarding the cost to paint, that sounds way over priced.  Call around and find your own painter.  Even for California that would be on the high side.

Check out Sacramento.  With the prices in the Bay Area being so high, there are a lot of startups popping up in the Sacramento area.  You could get the same benefits as Texas, while still being able to see your property anytime.  I invested in the Sacramento area about 5 years ago and am very happy with the decision.

Hi Ruta, 

What are your thoughts on the stability of the Mexican government?  I have considered investing in Mexico but the thing that keeps me away is fear that the people of Mexico could vote in a socialist government with anti foreigner ownership laws.  

I talked to the tenant and they are ok with paying half.  I explained that according to the lease they were responsible for window repairs and that there is a clause that states there should be nothing obstructing the window.

Do you have any equity in your house? You could get a HELOC, buy and fix up the house, then get a cash out refi for the appraised value after 1 year. If you do a cash out refi immediately after the house is rehabbed they will only give you a loan for the original purchase price.

Other ways to come up with some cheap cash is credit card debt (0-2% interest intro offers), 60 day IRA loan, and a 401k loan for 50% of the value of your 401k.

Aside from that you can go to a private money lender but the rates tend to be very high and I would avoid that if at all possible.

If you have the capacity to manage your own property, I would look to properties within a 2 hour drive radius.  Properties don't cash flow as much in California as other states because people are investing based on appreciation.  

I don't like investing out of state because it means added costs in terms of hiring a property manager and flying back and forth looking at deals.  I would never buy a property without being very familiar with the neighborhoods so flying to the state where you plan on buying is a necessary expense.  In the end you have higher expenses for investing.  

What I have done is buy in parts of California like Stockton and Sacramento where the properties have higher cash flow than Silicon Valley.  When I started my properties were not cash flowing much but with added appreciation (in rent and property value) over the past three years it's looking much better.

It's easier to negotiate before agreeing on price, but yes you can do that.  The way you would write the purchase agreement is to write an addendum that states "subject to inspection".  Also make sure you have an inspection contingency to let you out of the property if you don't like the condition.  Legally the inspection contingency would be enough to get you out of a contract or let you re-negotiate, but it's good to have a "subject to inspection" clause so that the seller is aware you haven't seen the house yet.

In California it's illegal to take commission for buying or selling a house if you are not a licensed agent.  If it's your house that you're selling, I would just raise the price by 3% if that's what you are looking for.  I don't know about other states though.

It sounds like the seller and turnkey company can't be trusted, I would walk away.  With regard to your lender charging you to hold the rate, it sounds like he/she is just fishing for more money.  I don't know when you locked but rates have been going down, so they should actually lower your rate for free since you are past the lock period.  Here is a chart of the 10 year bond, which typically moves in the same direction as mortgage rates http://finance.yahoo.com/echarts?s=%5ETNX+Interact...