All Forum Posts by: Account Closed

I am new also, but I think it depends on what your goals are...  My goal for my first deal is not to hit a home-run; it's to get on base.  

I feel like getting into your first deal so you can learn from your own mistakes and grow as an investor, is probably more important than hitting a specific CCR or $/Door goal... Those goals are important, and you shouldn't put yourself into a BAD deal, just to get into a deal - but - I feel very much like I'd rather get in with relatively poor CCR, just so I can start the train moving down the tracks.  

I think the main question I have for you to figure out is this: What would you need to do to increase your rents above your estimated $3,000?  Simply by increasing rents by $50/door, you would increase your CCR to 9.4%, AND meet the $100/door minimum most investors look for!

Anyway, I hope you don't get discouraged by not meeting lofty goals on your first deal.  Getting into the game is more important than only swinging if you can knock it out of the park.

Good Luck!!

Today was my county foreclosure auction and tax lien sale... and I went for the first couple of hours, just to observe.

I thought I had done some solid research (I was wrong).  A couple weeks ago I got on the county site, and waded through the hundreds of pages of PDF documents that my county published.  I wrote down all the properties within the areas near me, and I drove around to look at them.  I was shocked to see that most of the houses I made note of were still occupied, even though the auction was only a few days away (scary to me).  

I showed up today with the 3 properties I'd be interested in watching, along with some basic info I thought I needed... address and my "max" number.  I was hoping just to know if my numbers were in the ballpark of these investors who know what they're doing.

I was really overwhelmed when I got there, because it turned out the tax lien auction was also set to kick off - which I didn't yet realize was different than the foreclosure auction (dumb newbie)... I was also confused when I saw all the "Auction.com" banners and tables everywhere.  Even more confusion when 10am came, and there were about 5 different auctions happening simultaneously.  I had no idea which auction would be auctioning off the 3 properties I was hoping to watch... I never did figure that out.  

I quickly realized that having the address was a waste of time - because everything was auctioned by "Lot and Block" which I hadn't written down (newbie mistake).  So, I jumped on the county site to find the lot and block of my 3 properties, but never did know which auction(s) would have them :(

Long story short, I think I learned a few things, but I'm left with SO MANY more questions...

• What's the deal with Auction.com?  I tried to look at the site for my county, and they only had a hand-ful of properties listed, even though there were a couple hundred being auctioned off.
• I saw lots of "lists" with Auction.com branding, but scoured their site and couldn't find them... Do they hand out lists at the auction and I missed them?
• Whats the deal with the tax lien auction? (I'm already researching, but info here would be awesome)
• How do I know which properties will be at which auction tables?  I think I figured out that each auction is the Trustee... but when I go back and look at the documents the county posted, there are like 500 different trustees.  They must be grouping them together somehow - I just don't know how...
• Funding... It really blows my mind that many of these properties were going for 200-400k and people were just running to get a money order (it's due within the hour of the auction closing).  Are these investors just sitting with that kind of capital waiting for the auctions?  Is it likely personal/private money?  I assume you can't get Hard Money for these?

I'm sure I'll keep coming up with more questions as my mind settles down from the experience... wow.  I am going to try to do more research and be better prepared next month...  Any insight to this process would be amazing!

I'm currently still in the beginning phase of analyzing deals and I'm about to offer on a SFH for a rental unit. I've been playing with the calculators, and I'm trying to decide what makes the most sense...

Should I get more cash flow from day 1 but have a lower CoC return (~$200/month NOI with about 20k left in the deal)

OR

Should I BRRRR and try to get all my money back out of the deal so I can increase that CoC return, at the cost of the monthly cash flow (~$10/month NOI with zero left in the deal)?

I think I'd like to have all my money back so I can get into another property, while my tenants pay down principal... and I'm budgeting for capex, maint/repair, vacancy, insurance, taxes, and management... but is the benefit of having nothing in the deal worth having almost no true cash flow?

I've been researching potential properties to turn into my first rental property. In so doing, I think I've located a SFH that an out of state investor purchased and started to rehab but maybe ran out of money before it was complete.

My question is, in my research I think I found the sellers number.  Is it appropriate to call the seller and try to get information/details/pain points directly from him, or go through the standard channel of the listing realtor?

Thanks for your help!

@Gareth Fisher

I have mixed emotions about paying down my primary mortgage.  I currently have a 3.75% loan.  While I would save some (a lot of) interest to pay that off, I also feel like the cash I would use to pay it off could make significantly more than 3.75% on a RE deal.  I think one of the prevailing opinions within BP is to use debt wisely.  If you have hard money loans at 12%, get out of them as fast as possible with lower rates... but if you have a long-term note at sub-5%, I would expect you could use the cash you'd be putting into paying down your mortgage to make more money elsewhere... just make sure you're making more than the interest you're paying on your mortgage ;)

I'm no professional RE investor (yet), so take my thoughts for what they're worth.  Good Luck!

If she's only met the owner - and doesn't have a relationship, I'd say contact the PM first.  

However, when I rented a house in Fort Worth a few years ago, I had somewhat of a "relationship" with the owner... if we had major repairs she requested we contact her directly, so she could tell the PM what she wanted done.  Since we had a bit of rapport, I did reach out to her when the carpet needed to be replaced - but I offered to install wood-like laminate hard flooring instead of the builder grade carpet she currently had in the unit.  If she bought the materials, I would install it, and renew for another 1 year lease.

Needless to say, she was thrilled with having new flooring, and we were thrilled to have the old nasty carpet out and hard floors in the living areas.

I hope this helps!

Hey there Ty!  I'm from FW too, although I'm also a newbie.  I don't really have anything to offer you yet, but I'll remember you when I do have something to share!!