All Forum Posts by: Irina Belkofer

If you can afford to pay the friend APR=75% it's better to find HML.....at least it's 12-15%

On the subject: did you get real opinion on the value of the house? Not from Zillow 

That’s not true.

I have a tenant with FICO=705 and income $120K/year. She works from home in Pittsburg and Cleveland, renting in both cities.

Some people with decent score and plenty of income just not ready to settle down so they pay for their freedom to move if better opportunity will surface.

My property definitely not in A-B area: Rent is $900, purchase price $30K......so it’s real cash flow market. 

Not everyone wants to own a property: many people, especially younger crowd, prefer to rent until they are ready to get family. Single people are renting - and my properties are cash flowing

@Michinori Kaneko it’s fine with me if you don’t agree with the market - I’m not your PM and I won’t be.

Just negotiate the terms of your PM agreement and move on to the next PM.....what the problem?

You asked a question, I answered: you don’t like the answer - too bad.

Market is what it is. I don’t have to take anyone under management, especially C-D areas. For B an A I won’t even charge 10%, leave alone late fees - there is no such thing.

If you want someone to manage your properties where late fees might be potentially incurred - get ready to part with the money.

My best Tenants direct deposit rents well before the first of the month and there is nothing to discuss.

I don't take on rentals in certain areas at all because I don't have to - it's my business and work only for the clients who bought properties with me. I do not advice to invest in 25-30% ROI areas and that's where all the money grow: late fees, eviction fees, 1&last month rent+Sec.dep. If owner wants to risk - it's his problem.

Your comparison with your job is not relevant - you get paid for the job done, I don’t even have to take any client with attitude I don’t like. Too bad. 

There are plenty of PMs - choose these you like and be happy!

Market will beat anyone - that’s why new PM changing the agreement - they can’t pay their employees to do the job.

Just to clarify: cash flow only investment is ok if you're buying at 70% or below of ARV. This is not the case: 1bed/1bath 646sq.f house for $29.9K is absurd. For the price point it's very - extremely - low ROI. For $30K invested Rent should be at least $800-850.

Besides, this is SFR, which means all the CapEx is on the owner.

I have townhouses in that price range and HOA is $185-197/mo but HOA takes care of exterior, including replacing A/C when broken. This house is a joke, not an investment - I wouldn't buy it if they would offer me few $$ to transfer title into my name - because it's not an asset - it's a huge deferred liability.

I don’t see anything wrong with investing in cash flow without future appreciation - whole Midwest does that. We still can catch some appreciation- forced one, when we buy cheap, improve and rent for 2-3% per month of the final price. When it’s a good time to sell - then I’ll make few $$ on appreciation, 25-30% every year cash on cash return (after expenses) and can buy better quality house with deferred taxes (1031).

In this case, it’s nothing above. Someone is unloading inventory in hope that OOS investors will admire numbers on the paper. You have to see the house, walk the neiborhood on Friday night and imagine what kind of Tenants you’ll get for that price.

This is not a stock market, this is REAL estate: every house is different.......”money don’t have eyes”(proverb) - you have to look after your money

$30K cash “investment” with $4800/year gross income is money wasted.

There is no details what’s in expenses but I guess only what you pay out of pocket: taxes, insurance, PM.

90 years old house needs a LOT in CapEx and maintenance/repair reserves. Because there is "long-term" Tenant, you can't really fix everything up front and these miserable "cash flow" will be eaten with first major repair.

This is not a cash flow investment - location is questionable, House is delapidated, $400/mo rent shows the quality of Tenant - I’ve been renting 2bed apartment 13 years ago for $530 - in much better part of Sandusky and still not the best place to live. $400 house will need all the repairs as a normal rental, only you’ll pay for that out of your pocket.

What the point of the investment? $30K in any saving account in a bank will give you much better return - it’s safe and won’t need more money to keep it.

Why Sandusky?

It’s extremely seasonal area, everything is pretty much dead in the winter 

There are plenty of other cash flowing towns, even Toledo is better than Sandusky. What kind of cash flow is there? Most inventory is older than 100y.o. - deferred maintenance and CapEx

It’s a money pit .....IMHO

 Keep in mind that if your buyer default on your note, you’ll have to go through the foreclosure process.

If you do it lease-to-own, it will be just an eviction but the title will stay on you.

If the house is old and falling apart but the buyer can't get even FHA loan (which almost anyone can now), the chances are huge, that buyer won't have money for repairs, leave alone roof or foundation.

I’d rather sell the house like that (maybe cheaper or with a tenant) than doing land contract, seller financing etc

If it’s a “tired landlord”, off course the rents would be under market, property with lots of deferred maintenance and maybe serious capital expenditures to do.

Financials might be not available - it’s possible that some Tenants paid not registered cash, sch.E was filed with actual expenses but huge “vacancies” which created “losses”.

The real question here is: can this property perform better and what's the cost of CapEx/maintenance ?

That might be a great opportunity to buy under market and turn it around. Problem will be with financing though: if you can’t buy for cash and refinance it later after repairs and better tenants, it won’t work

Hey, I haven’t said I can buy now for $40-50K and Rent for $1200 :)) I think I can but it would be rather an exception not an average 

Off course, the house is going to be refinanced later and for that $72K all in house I expect $95-100K (it was appraised at $125K couple years ago and the values still go up), so the cash-on-cash return will be infinity....lol

Buying with cash in this market is the best - everything worthy get sold on multiple offers and any financing is not considered - just cash.

I don't count CoC returns as real: only Rent to price is the number. All these funny money for newbies - I prefer real money.

Again, I do have properties which might be hard to refinance- like townhouses. But when I buy it cheap (these for $13-14K plus $5-7K in updates) I Rent them for $825-925 now and I’m fine that there is no mortgage - they are paying off my credit cards I bought them with.

My clients buy with cash and then refinancing the houses, too. I do tell them about CoC return concept and the power of leverage, however, when you factor closing costs, points etc for that mortgage of $60-70K, you're much better off keeping it free&clear.

Off course, if house worth $100K+, it makes sense to cash it out and repeat the process

My daughter lives in TX so I do visit that sunny state....lol

Interesting - you didn't answer the question how much is your rents on these $130K SFH?

Multi families heredont have that good returns, mostly because owner pays water and sometimes even gas - which might get quite a bill in winter.

My own properties were purchased mostly in 2015, recent ones don't have 2% - purchased for $65K, updates $7K, rented for $1220.....not like 2015 - $20K purchased and updated, Rent $925. Now you can't buy anything cheaper than $40-45K even REO's there.

My point is when you are bragging about your market, just give relevant info - everyone can count numbers....if they are presented.

I personally don’t like these 1% or 2% - I prefer details how much is taxes on the property, insurance, who pays wáter, landscaping etc.

In my example of $1220 Rent, the owner pays taxes $1800/year and insurance $460/year plus Euclid rental fee $200/year.

Before PM, mortgage, vacancies, repairs, it’s $2460/year to pay so it’s $12K/year to cover all that.

$12K/$72K=6 years pay off.....or 17% -ROI - this is much better number.

If I’d compare my numbers with national average, what use that would be?

Appreciation is actually the best part of any investment, not speculation.

That's why we are trying to buy at 70% ARV - to have extra equity. What the point to buy a house at 100% of its current market value with 1% of gross ratio "Rent/Price"? The very first emergency will wipe off that profit for a year (roof, HVAC, etc) and if you have to sell - it's -10% ....you're in red.

Forced appreciation is good but then you spend more money than it costs. For example, I bought killed townhouse for $22K, spent $28K to fix it - rented for $950. Sounds good but I have to wait until anything is selling in this location for $55-60K considering selling costs.

I’m sure, at El Paso it’s different and everything is better: no winters, frozen pipes, taxes are lower and rainbow is beautiful.

When I’m thinking about investing OOS, I’d like to see the numbers - apples to apples, not some nice descriptions of National economy.

ps I’m serious, by the way - I have clients who are looking for better markets and when I see something interesting - I’m telling them to count the money there. This is a very helpful topic