All Forum Posts by: Gordon French

@Ashley Cote I moved to a small town where I could afford to get into rentals. Starting out big cities were more then I could afford. My homes are all in town, but the town is considered rural. It is a farm community with a very divided income. Majority are low income. Few wealthy farmers. 

I manage my own properties. There is no legal property manager in my town. You have to look at the vacancy in your town. I average 2% vacancy per year. I typically rent within 3 days. As I said I have a waiting list. If I had the down payments I could rent another 3 to 4 houses within 24 hours. I have only had one house vacant more then 3 weeks ever. It was vacant for 3 months due to property damage. 

Its all about picking the right small town. 

Can you take a loan out on a car? I have taken out several high interest auto loans on a corvette I own and used them for the down payment. Pay the loan off on the car from the rental proceeds and personal money, then do it again. 

This is a very high risk aggressive way to get the money... but some times you gotta do what you gotta do. 

Im very interested in the idea... but in Las Vegas. I want to purchase a vacation home there. After looking at the prices on there site I don't see how it works. I am clearly missing something. There are condos for $10 a night. There is no way I am going to clean the house, wash the sheets and whatever else for $10 a night. I would just leave the place vacant. 

Hopefully someone will shed some light as to why property owners are doing this. 

Nice work, and we are neighbors. I have been thinking of branching into Pueblo. 

I moved to a small town in the middle of no where. I was Blessed to find a house for $14,000. My Grandmother loaned me $18,000 at 7% to cover closing and moving. This was more of a shack then a house. Over then next year I was able to put $30,000 into the house making it a home. Since I was no longer paying rent I was able to put almost 100% of my income into it.  I took loans out on my cars to find more cash.... then paid them off over the next 4 years. 

That house is currently rented for $550. The loan was off the record so I was able to use this house to help finance the next one. 

It is possible to use a first time buyer program to get into a duplex with 3% down, 5% would be much better. I have no idea how doable that is in the area you live. I was determined to make money in real estate and move to where I could make it work with what I had. I only made $20 an hour back then.... but I had my wife's income to help with the bills. I also did 80% of the work on the house my self. For example I raise the house 3" with a 40 ton bottle jack from the parts store. Then put shims on the foundation to level it. I was all about doing whatever it took to get that house livable. 

Thankfully the house had new electrical and solid plumbing. My issue was the roof leaked, so the inside was trashed. Kept a bucket in the attic to catch water the first 3 months. Thought my wife was going to leave me.... It all worked out in the end. 

For the next house I went to every bank in town.... 3 times... I listen to why they told me no and worked to fix that. After a few years and hundreds of rejections I finally got a bank to say ok. I now have 11 homes and two cars financed with that bank. Once I proved I could do what I said I could.... they started saying yes to pretty much any loan I ask for. 

My point is.... how bad do you want it to work. Don't give up... don't take no for an answer and save all the cash you can get your hands on. 

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As for the student loans... put them in deferment 45 days before you try to get the loan. This will show no payment due and fix the debt to income level in the short term. Find a bank first and plan it out.  That is only one of a few options to make it work with them. Student loans are fine if your still under 40% debt to income ratio. Just don't buy some fancy car to look cool. 

Define location? 

Do you mean how important is it to have it in this neighborhood vs that neighborhood? or do you mean your open to different states. Location across states or cities is very important. For example 99% of investors cannot make a profit in Portland Or, the property tax is so high it takes away all the potential profit. For someone just starting out it will take them 10 years to save up to buy in LA or NY when they could buy for a 10th of the price in Atlanta Georgia.  If your really committed you will move to an area that has GRMs of less then 8. 

If you just mean on this side of the street vs that side... and your planning to keep the property for 30 yrs it matters very little. No one can tell what will happen to a neighborhood in 30 yrs. It will like change several times. The ROI and GRM is much more important in this situation

If you planning to sell in less then 5 yrs the location again means a lot. You don't want a neighborhood that is on a downward spiral. You want a growing neighborhood. 

No one answered your question on 15 or 30 years. At your age 30 yr will get you more immediate cash flow. I would take a 30 yr on your first couple. After a few you wont be able to get that option as they will clearly become business loans. I started at around 35 with a goal of being retired by 55. So all of mine are 15 yr loans. Mine are also all business loans, they are easier to qualify for. Im on track to being retired by 50. 

You have to decided your goal. At your age I would do everything to get all the cash I could for the next 10 years then start looking at 15 yr and 10 yr terms. 

Add the shower... An additional shower will typically repay you twice the cost of adding it. In your case that house truly needs it and not having it will hurt you. 

Its basically what I do for a living. The rentals are my retirement. I am a senior developer specializing in point of sales and accounting application for internet marketers. I didn't like the stuff I found online. But for some reason I hate quickbooks and the way it is tied to a bank account. I don't want to track every transaction on all my accounts. 

I know some people who are content with it, so I hope it works great for you.