All Forum Posts by: Val Csontos

      As we are entering into 2015, I thought we should reflect and recognize that none of our successes in RE investing could have happened with out the hard work of our Supporting Team".

        You know whom I am talking about:    The hard working peoples we call if the roof leaks, furnace brakes down, pipe leaks, etc...

       Did you think of these people during the Holidays?  No, I don't mean when you got the call on New year's eve about the leaking toilet, and you need someone fast......

What I meant is:  how did you show your loyalty and appreciation to your supporting team so they will be there for you when you really, really need them?

      Well I have to confess, when I was a beginner Investor years ago I used to just send my contractors each a  gift card for $50-$100, and my thinking was that I did show them that I care about them. It toke me probably a decade or more to realize that this is very superficial way of thinking. 

     My own contractors help me realize how can I build REAL loyalty with a little bit  better planning. What I started noticing that my Roofer, HVAC man would often ask me in Dec and Jan each year if I need a new roof or a new HVAC system. I used to say I am good thanks! What was I  thinking? Here is what happened:

    One day I needed a new roof and as it happened it was in  right about middle of January so I called the roofer and he was thrilled to hear from me and gave me a 50% off price in real discount, because he needed  the money pretty bad after his wife spent to way too much for the holidays. I also noticed that after this January Job he was nice to me all year round.

So that gave me the idea and I started budgeting for major improvements that are feasible to do in cold months.

      The results: I have been getting done quality work for close to half price, such as Roofs, Furnaces, Bath remodels etc...... And the guys are very nice to us, and they show their appreciation all year round, because we help them out in times when they need work/money the most.

       By the way we never push the guys to give us discounts, they offer it. Nowdays they know that we schedule our improvement like this on purpose to help out. A little planning goes a long way to show consideration and build loyalty, and the savings can add up too!

This is a WIN - WIN situation for all parties involved.

Happy New Year to All of you!

@Elizabeth Colegrove First I would like to congratulate you for taking so many hours on this websites and share your energy and experience!

Let me elaborate some on my Creative RE Agent situation. In order to find him I had called 20 RE agents and 19 of them have responded like you, or just laughed at me, but the last on the 20th one was  a guy who was also reading creative books so he toke a chance on me, and you know what was the outcome? I purchased many SFRs with his help, and paid him $80 to $120 /mo PER property on 60 months 0% unsecured notes. Few  years later at one point he was getting close to $2000/month.

      Just imagine during bad weather, snow storm hurricane, etc... who had the last lough? My creative agent friend or the ones who was laughing  at my request?

     As far as your agent goes may be it is time to add a creative one to your contacts list? :)  Her one more thing we did quite a bit and you or anyone else can do to when you first start out: 

      I also used my agent friend as a negotiation point, and told many listing agent when i was trying to buy their listing, if they do not give me 1% or their commission towards the closing cost I will have to bring in my agent who will do this and this way i will be able to purchase the property. (this move had worked about 1/3rd of the time) so sometime i would just bring in my RE agent to get it done. This is perfectly legal in states around here, as my RE agent has become the "procuring cause"  there for he is entitle for a commission.  

       If you have been an RE investor for a while you will come to the day when you will realize that in order to by one more property you will either need to sit for a while or you need to get creative!  Sitting is not my cup of tea, so i had no choice but to get creative. 

I started RE investing when i was E-4 and my tenants were 0-3s to 0-6s it felt pretty awesome at the time, to be able to buy those  B  properties in A,B neighborhoods and I could have never done that if it wasn't for creativity.  (mostly zero down deals).

Good Luck to you guys!   With your persistence and energy the sky is the limit!

@Jeff Howard  Congratulation for taking actions!  That is the most important step. 

You are getting great advises here from @Elizabeth Colegrove  @Victor Eng and others, 

I would add three more things: 

     Don't worry about being a little bit "too soft" property manager, as this will change in no time as your tenant will help you with that. :) All kidding a side it is a must that you understand the property management even if you are planning to higher one later on.

    Don't forget to seek out and find a realtor (buyer's agent) who will lend you his or her commission (my agent does lend me his 2.5-3% commission at 0% interest for 60 months) so I can use this to reduce my cash needed for closing cost) 

    This will allow you to buy more properties because you will put down less money at closing.(in order to find flexible agents you might have to call 10-15 people, it toke me personally 19 calls)

    Finally if you hare buying a property in "good enough to rent" condition, don't forget to get permission to start showing the place BEFORE settlement. So this way you should have e lease lined up by settlement day. I do this tactfully but i disclose  this honestly to my new tenant. The end result usually is 30 days of rent in my pockets from day one AND there is no mortgage payment as it is do a month after settlement.   This "move" usually buys me the refrigerator if the unit needs one! 

Remember creativity will allow you to buy more properties with less cash, and that should help you to move a head faster to achieve your investment goals! Just make sure all of your investment purchases cash-flows well after ALL expenses. (not just PITI)

Good luck to you guys for taking the critical first step toward becoming RE investors!

Val

@Jason Hill Did you know if you have mortgages on your existing properties than there are interest write offs you can do for each properties? Also yearly depreciation deduction for the first 28.5 years? Also you can claim mileage on your car, deduct part of your phone bill/internet bill as a normal business activity...... But at this point in your investing carrier, you would definitely want to get a CPA's help.  You will get your money's worth, it right at the first year! He or she might go back for you to look at your past returns for additional deductions that you had missed. That a lone might pay for the CPA's fees. Normally closing cost from the recently purchased properties are tax deductible too.

Consult one ASAP.

Good Luck to you!

@Jason White  There is no such a thing a truly passive investment in Real Estate. People who want's your money to support their investment goals, will tell you that they have a passive investment ready for you in hope that you just let them do what ever with your money!  Not a good idea! 

How ever with some basic research you could choose some property types that you might be comfortable to invest your money in. Once you know what kind of property you would like to deal with as an investment objective, then you could get some references from your local banker/real estate broker to help you to meet REPUTABLE Real Estate Investors CLOSE BY where you are located.

By the way If i was in your situation I would never consider investing out of State, as if something goes wrong and you need a "divorce" from your business partner situation gone bad, and try to recover you investment money, (checking land records/real estate deeds etc)   the last thing you would want to do is start flying across the country to show up to court.

This is the book I would recommend to help you identify on what type of real estate you might feel comfortable with as an investment "niche"

http://www.amazon.com/Make-Money-Commercial-Real-E...

Personally if it was me I would try to keep it  simple and just get 8-10 Single Family Homes in the best school district  I can afford near me. I would make sure they all are younger than 10 years old to avoid frequent maintenance issues but get them at a little be of discount price, in one may be two neighborhoods. I would hire a Property Manager (not a realtor who is hoping that you will sell soon) This way if it doesn't work out you just change the property manager, and you don't have to deal with a Partnership that is gone bad (ie law suit) .  Managing the property manager is a bit of work but with less than a dozen properties in great condition it should not be major headache.

Let us know how it is working out for you! You can further educate yourself partnerships and Property Manager issues, just by looking around here on the Bigger Pockets website!

Good Luck to you!

@Joshua D. 

Congrats on your decision! It is great way to go! Don't forget to take your Lowes CC statement/ to Home depot (when you have business there) they will give you the  10% too for purchasing there! 

As they like to do Price match with the competition. :)

Good Luck to you!  

@Joshua D. 

We were able to use credit cards years ago to pay for closing cost for our rental properties and buy appliances and get 12 months no pay no interest from Homedepo, Lowes etc...

How ever,  Credit Cards are also used as "hooks" by banks to get  the regular consumer in a bad habit of start carrying balances.  Just look at the way they want you to  build credit.

Now days we are only carrying balance on a business transaction if it is worth the return. And for our personal expenses we pay off all of it each month.   Good Luck to you and be careful!

I had saved close to 30% or about $100K  by GC ing our own "gut out" rehab, on our personal residence. BUT it was not easy, and i had probably cost us about $5k-$8K in mistakes.  Read On!!!

  I had some smaller rental rehab experience, kitchens, BAs small addition(legal ones). In order to completely rehab our personal residence I had to became a full time contractor for close to 20 months (felt like 60 months)   Luckily there was a slow down time in RE investing (when folks line up to buy every listed house) so I had time available to me to do this.

 And in order to be able to successfully finish the project I had to learn:

 To make my own copper roofing

The professionals quoted me about $30K to cover with copper a small roof (no more than1.5-2 squares)  on front porch, so I learned online how do do coper roofing borrowed and metal bender from a friend and purchased copper for $2500 wholesale. 

 I had to learn to do pluming so I could shows my helpers what to do, and a master pulled a permit for me  and checked all of our work.

Same for electric.

Most work past on first some on second try.

I had to learn how to build oak stairs, with iron railing. (toke me a week and a half with one helper) it looks like a pro job but a real pro would have done it in two days.

I had to also learn how to set up a computer network for entire house with LAN cables for every room so i can plug in a computer everywhere laundry room, garage included, with connecting to a network hub in closet. 

For HVAC we had relationship from our rentals, so we had pros doing it including sizing it professionally for new widows/insulation, and a completely independent system for each floor. (no too hot/too cold floors)

Drain tiles, I had no experience but I had watched a lot of Holmes on Homes (our county inspector is also fan of that show) So it was done correctly by my helpers per my instructions and ok'd by county.

 In one day I had drive to 12 different Homedepots to try to match the Marble stock that was running low for our Master BA....as you pros are well aware you can not do marble floor in two steps (especially white ones) it is almost a must to finish an entire surface the same day..... what a pain in the a##.. that was!!

Doors and windows, insulation ......etc....

Looking back now, It felt like my head was going to explode by having to learn all different trades all at once while almost all the deadlines were broke. ( My wife called my the "two weeks contractor" because i told her so often for months, that we will be done In two weeks. :)

 I learned a lot and it comes very handy now when I hire contractors for our rentals,  BUT I am not sure if I would do it again knowing what I know now. May be I should have just waited  a few years and give it to a trustworthy professional with lots of experience!

#1  Reason we don't do condo's as and investment:

In a down cycle prices of condos drop first and fastest, and in the up cycle's prices of condos are last to go up, if they go up at all. 

#2 Reason: 

The condo fees can be so high, that if you save the fees each year 

(by purchasing similar town home with small monthly fee) 

you can save up a down payment for a new investment property every 3 years.

Worst of both worlds:

They are not as liquid as TH, SF, and they don't cash flow like an Multifamily.

@Jon Holdman  

30 years fully amortized, 

25% down for purchase and they accept cross collatera

in lieu of down payment

for for refi they do 75%Loan to Value 

(we are getting ready to refi two properties at the end of month/year.

Also if rates drop they will adjust your rate down if you pay one point. (not refi chage chang e rate all else is same) 2-3 years ago we paid 1% on four or our "Buy and Hold" properties and they dropped our30yr fixed  rates from 7% to 5.5%

Of course it helps that we never missed a mortgage payment once in 17 years

But It is definitely worth getting to know your local bank/banker :)