All Forum Posts by: Erik Hitzelberger

Welcome David. It's nice to see that you have goals laid out for yourself and your family. Focus on learning 1 thing at a time and then applying your knowledge. I wish you the best of luck!

I don't like doing things just for the sake of doing things. I would recommend looking at the house, but do so with the purpose of learning something. You could 1) estimate the repairs, 2) attempt to persuade the seller of the home's value, 3) call a foundation repair contractor and have him show you what to look for, 4) etc. Whatever it is, be deliberate about the learning process.

Looks like you covered everything. $309 / month is ~8% cap rate which initially seems a little low. Not bad, just not compelling. That being said, $591 would be incredibly high for the costs you mentioned in my area. If I use 10% each for vacancy, repairs, and PM, that's $270. In Louisville T & I would be ~$90. Putting the total at $360 and making this deal very compelling (assuming the area is ok).

This is called an Escalator Clause. It is legitimate and theoretically works exactly as your agent described. In practice, it shows your cards. The seller can counter back at $40 knowing you were willing to pay that much. That being said, If you just offer $40, you are guaranteed to pay $40 if the offer is accepted. If you make the recommended offer, you may pay less.

Welcome Lisa. I look forward to reading more about your REI career. Are you investing in NYC?

Welcome Michael! If you are interested, there is a local REIA group here in Louisville. We meet once a month at Woodhaven County Club. It's a great place to network, meet like-minded people in the area, etc. I hope to see you there and I'm sure I'll see you around BP.

Good luck with the RE class.

I'm not sure I would have passed on the deal, but I applaud you for sticking with your plan. I assure you that you will be more successful being EXCELLENT at 1 thing than being good at several. If you are trying to be a B&H guy, focus on being the best damn B&H guy you can.

That being said, one must ask whether randomly bidding on HUD and Fannie/Freddie homes is supporting that strategy. You wasted several hours (day?) on this excursion.

Good luck!

There is a person in my area who operates a service to find tenants for landlords. He charges 50% of the first month's rent to find advertise, handle showings, screen tenants and get the lease signed. I fairly certain the landlord has veto power prior to the lease signature. I don't use the service, but I know several people who do. This includes people who have been in the business a long time and know what they are doing. They just don't want to bother.

Find someone who is actively looking for more deals. Offer to look at properties for them in exchange for him/her teaching you how to evaluate deals, estimate costs, etc. Not only will you learn how to find properties, you will also become very familiar with your area.

With a 15 year am rate, I get $3677 for PI + 825 for taxes = $4502 / month. That exceeds your rental income before vacancy, repairs, management, or anything else. While you have a "free" place to live, this seems like a bad deal and that's before I consider the fact you have to put down $30K.

Is the rent he is charging appropriate for the area? I know nothing about Fort Smith, Arkansas, but these prices seem incredibly low.