All Forum Posts by: John McCombs

Your story may help us as landlords and investors to answer the same question- what do we find as deal-breakers? The answer will be just as different for every investor, just as it would be for every tenant. Is this tenant a good match for my property? Is this landlord a good match for my needs as a tenant? Although my experience is not in Section 8, I do often need to find a match between each house and a tenant for that house. There is still a risk both for the tenant and for the landlord when you sign a contract. I can definitely understand your reservation about a landord who doesn't want to install a gfci. Is this landlord living closer to the edge than you, a Section 8 tenant? Is he/she unwilling to spend anything on his properties because he/she is out of balance and won't respond to basic human safety concerns? Is this landord only fed up with regulations that he/she believes have no merit? (The Section 8 "Bible" recommends the bare minimum rehab) Maybe the landord hopes that someone loves the house enough to invest just a little of their own money/effort to partner together on the landord/tenant partnership? Maybe this landlord has been burned by so many tenants, he is hoping to find one who is willing take an extra step before releasing his/her nest-egg-house to another person. Who knows?

Having multiple kids can be a great stability factor, because a mom with 4 kids will probably do anything she can to not have to move. It's a two-sided coin. The question I would want to have answered before making a decision if this family is the best match for your house is how they maintained their current/previous house. These kids could all be excellent house-keepers, or they could be breaking everything they touch. Quantity of kids is less important than the quality of their care for the house.

My personal opinion, and I don't know the cost of operating an LLC in your state, but it depends on he type of property that you are renting- if his an 8-plex with lots of potential problems that is ripe for a lawsuit, buy all the insurance that you can and transfer it into an LLC, but if these are SFRs, the risk is not high enough to warrant the cost of the LLC.

I have looked at rental applications before that listed HUGE car payments and student loan payments and despite that they did earn 3X the rent, they ended up not being the best "match" for my rental.

Cheers! Wishing you many blessings and great fortune on this new milestone!

Your dad's wisdom makes sense. My thinking would be similar to those who say raise the rent, however I would recommend an even smaller increase, and here's why: you know that tenants will talk to each other about rising rents, and you will be doing your tenant a favor if you only raise his rent $5 per month, so that he can complain about raising costs with the neighbors. Ask him, in exchange for the small increase to not discuss his actual rent with his neighbors. He can sit around and complain and not have to lie! The other tenants won't feel like the are getting gouged if the believe that everyone has to endure the increases.

First of all let me start by saying that I think you need more than a year to accomplish this goal using SFRs, but I think they are the best vehicle for accomplishing your goals. Start by moving into an apartment, and renting out your current home. (CF $$428 mo)
Start to research good potential SF flips. Do all of the rehab work that you can yourself. Buy with all cash and turn your 150k into 175k.
Month 3: Buy second house to flip, all cash. Turn your 175k into 200k. Get prequalified for a loan.
Month 5: start to buy, improve and hold rental 1. Each SFRs in the 80K range. 20k each for down payment and 5 k for rehab each.
Keep your FICO above 720 so that you can keep qualifying for the best loan rates.
Month 7: rent property 1 (CF $428 each) and purchase property 2
Month 9:rent property 2 buy property 3
Month 11: rent property 3, buy property 4
By month 12, you will have $1712 cash flow and you may have to dip into your pot for the next 3 months for passiveive income on your $3000 goal while you continue this process.
Month 13: Rent property 4 and purchase property 5
Month 15: Rent property 5 and purchase and rent property 6 before month 17.
Each of your 7 rentals cash flow with $428 each for a total of $3000
Set aside about $20k for repairs/reserves.
With approximately $25k down payment, buy yourself a modest home.
Easier said than done, but this would be my recommended path.

In Fort Worth, I've had 3 different houses that needed foundation repairs. The most expensive one needed several piers and cost $15k on a 1600sf home. After the repairs, there were a few other cosmetic repairs that were needed as well.

I listened to the podcast on my drive to my job today and really appreciated the insight on balancing your work and investing. I enjoyed hearing your story about how you got started, and you follow up post about what it takes to find good deals. I look forward to reading more of your posts.

You've found properties that would make good investments. Show your numbers to a few investors to ask their opinions of the deals that you have found. If you can find good deals and connect them to he right investors, then you'll be positioned to make profits.