All Forum Posts by: James Dean-Howell

@Sam Shueh

I'll rephrase my questions for you. 

What criteria can I look for to find properties in my city with the best price/rent ratios? 

This is a long one so I appreciate anyone that takes the time to answer! 

My market is Lansing, Michigan.

I just watched a video on The silent killer that is CapEx and read a blog and the comment section on why 30k homes are bad for long term buy and hold rental strategy. The summary was that 30k properties generally couldn't produce rent high enough to sustain the cost of long term CapEx and maintenance. This isn't talking about a property you buy for 30k,fix up and make it a 80k property. Because in that scenario you actually bought an 80k property at a discount. This is talking about properties in markets that aren't likely to appreciate and when you buy them for 30k they are actually worth 30k. I don't want to bet on appreciation for my profits since I want to make my profits when I buy.

Given this I wanted to make sure that any property I look at with my realtor is going to be able to sustain as a rental property long term since I plan to hold it forever.

My realtor showed me a duplex yesterday that is listed for $38k. One side rents for $500, the other side that I'd be living in and eventually moving out of within a year, (house hacking/Nomad Strategy), rented for $450.

At $950 coming in, in a lower C class area, the rental income wouldn't be able to sustain the costs of owning the home long term when considering CapEx. Also this home is old. I can't remember the exact year but it's before 1950. Most homes In Lansing are.

I'll probably need something that will rent for at least $1100, if not more.

The problem is that I also want to have as low of a downpayment as possible with as low of a mortgage as possible so I can afford to put aside money for maintenance, management, and CapEx. So ideally I'd want to buy a cheap property that rents for a high amount.

What are ways I can search for that in my area? What characteristic of a property can I look for? Given that I'll be house hacking my realtor created a list that focused on duplexes but giving the cost of CapEx I can't really see duplexes within my price range, (below $115k), making enough rental income to sustain and cash flow positive long term. I'm talking 20 to 30 years down the line. I'd probably need each side to rent for 600, if not 650 just to be safe. So I was thinking of maybe focusing on Tri's and quad's instead of duplexes.

What do you think of that strategy? What criteria can I ask my agent to search for to have the best chance of finding a home I can get for cheap but will rent high? Would I only find that off market? Are there certain areas I should be looking at or avoiding? I've already asked my realtor a ton of questions and had a few meetings with her. I want to make sure I'm as knowledge and prepared to give her the best way to help me find what I want. That's why I'm asking here so I'm making an efficient request to her because I value her time.

Thanks for your time!

This is a long one so I appreciate anyone that takes the time to answer!

My market is Lansing, Michigan.

I just watched a video on The silent killer that is CapEx and read a blog and the comment section on why 30k homes are bad for long term buy and hold rental strategy. The summary was that 30k properties generally couldn't produce rent high enough to sustain the cost of long term CapEx and maintenance. This isn't talking about a property you buy for 30k,fix up and make it a 80k property. Because in that scenario you actually bought an 80k property at a discount. This is talking about properties in markets that aren't likely to appreciate and when you buy them for 30k they are actually worth 30k. I don't want to bet on appreciation for my profits since I want to make my profits when I buy.

Given this I wanted to make sure that any property I look at with my realtor is going to be able to sustain as a rental property long term since I plan to hold it forever.

My realtor showed me a duplex yesterday that is listed for $38k. One side rents for $500, the other side that I'd be living in and eventually moving out of within a year, (house hacking/Nomad Strategy), rented for $450.

At $950 coming in, in a lower C class area, the rental income wouldn't be able to sustain the costs of owning the home long term when considering CapEx. Also this home is old. I can't remember the exact year but it's before 1950. Most homes In Lansing are.

I'll probably need something that will rent for at least $1100, if not more.

The problem is that I also want to have as low of a downpayment as possible with as low of a mortgage as possible so I can afford to put aside money for maintenance, management, and CapEx. So ideally I'd want to buy a cheap property that rents for a high amount.

What are ways I can search for that in my area? What characteristic of a property can I look for? Given that I'll be house hacking my realtor created a list that focused on duplexes but giving the cost of CapEx I can't really see duplexes within my price range, (below $115k), making enough rental income to sustain and cash flow positive long term. I'm talking 20 to 30 years down the line. I'd probably need each side to rent for 600, if not 650 just to be safe. So I was thinking of maybe focusing on Tri's and quad's instead of duplexes.

What do you think of that strategy? What criteria can I ask my agent to search for to have the best chance of finding a home I can get for cheap but will rent high? Would I only find that off market? Are there certain areas I should be looking at or avoiding? I've already asked my realtor a ton of questions and had  a few meetings with her. I want to make sure I'm as knowledge and prepared to give her the best way to help me find what I want. That's why I'm asking here so I'm making an efficient request to her because I value her time.

Thanks for your time!

@Miguel Castillo

What could I offer them in return to make investing in my worth it? 

P.S. I actually did sign an agreement with an agent for 6 months. 

This is again going to be a really long post so I appreciate anyone that answers. Thank you.

I have interviewed about 5 agents so far and I still haven't settled on one. I suppose I will start with why I am having trouble.

I am an aspiring investor just starting out. I intend to purchase my first home this year. Ideally within the next 3 to 4 months around the time my lease expired. I have read about 6 books, listened to podcasts, read articles, etc. I still have so much to learn and so I am looking for an agent who is going to be best for me for the journey I have chosen.

I have chosen to do a combination of the brrrr strategy and the Nomad strategy. Nomad is a process of serial househacking once a year.

The first problem is that every single agent wants me to sign an exclusivity agreement with them. Even the videos i have watched on the Nomad strategy advocated for that. Yet almost every investor I have talked to says not to.

The second problem is my expectations of agents. I am looking for an investor friendly agent who is willing to build a long term relationship with me. Take the time to educate me. I want them to be an investor themselves and I want them to be a full time agent. And of course have a lot of experience and knowledge in my area. I will be buying multiple houses from them so I think that is a fair standard. Since I have never bought a house or worked with an agent I dont know what to expect. My current issue is with the agent I am thinking about now.

She has 30 years experience and says she used to have over 30 rentals which she liquidated over the years. Now she says she is full time but also she runs a bed and breakfast. She has only 1 active rental. She says she is the best because of her experience. And because she is in the know about developments in the city since she is on boards and such. So after a meeting I am considering her. I was really close to signing the exclusivity agreement until yesterday.

We had our meeting or thursday and i told her exactly what kind of property i was looking for. A dublex, tri or quad that is at least 80% of market value. I will even consider SFH with 2 baths but she said what i want would work better with a duplex. She said it would be really hard to find a property that meets my criteria below 20% market value but she gave me a statement of confidence that she could help me find it within my time frame. 3 to 4 months. Well to be specific I asked her if she was confident she would be able to do it and she said "Sure."

 The next morning on Friday she sends me a listing of a duplex by email and says that this could potnetially meet my criteria. I looked at it and sent her a few questions which she still hasn't responded back to. Let me see if i can find the questions.

1. How long has it been on the market?
2. What type of neighborhood is it in?
3. Any idea why the price is so low relative to it's value?
4. What do you think the true value is?
5. What are the comps?
6. Rent levels in the area?

So far a day later i have gotten no reply. Today is Saturday.

TL:DR. Am I expecting too much from my potential agent? What should my expectations be of an agent? Why shouldnt I sign an exclusivity agreement when it seems like agents arent going to give you their best effort without it?

Thanks again to anyone who has the patience to respond.

My phone isn't cutting it. I toured a home with a seller yesterday and tried to take some pictures but the lighting was too bad. There was no electricity in the home so I couldn't get lighting in the rooms. The basement was pitch black. So was the attic. 

Is there a good standard wide lense camera that I can buy to help me with this? How do I get proper lighting on a pitch black room to take a good picture? A lot of my opportunites to take photos are at night so I need something to help me take clear, well lit pictures even in those conditions. My budget is maybe 100 dollars, hopefully less. I don't really need many bells and whistles on the camera. Just a wide lense and the ability to take good pictures in low light.

Also should I buy flashlights or something for lighting? How do other take pictures of a pitch black basement? 

What is the general purpose of a title company for a real estate investor? What should I be looking for to compare different title companies?

I need a good copy of an assignment contract and contracts for double closing in my area. Will a good title company be able to provide that or will i have to provide that myself? If I have to provide those things where can I get a good copy?

Where can I get good legally sound contracts for all my investing needs? Whether that be land contracts, lease agreements, agreements for purchasing properties off-market. Will a good title company help with all that?

This is going to be a really long list of questions so I really appreciate anyone who takes the time to help me in any capacity! 

Alright so after mailing a few letters, about 50, I've started getting calls from local home owners who have off-market property. 

I'm talking to one homeowner now who actually has 2 separate properties he wants to sell, not just the one I mailed him about. He told me he has an additional off-market property he is looking to sell. Both are now vacant but they were being rented out. He told me they both need repairs. So here are the issues I'm running into.

1. The doors were locked. He gave me permission to visit the homes yet when I got there the doors were locked, so I was only able to take pictures of the outside of the home. 

This brings up a problem I've been having about trying to estimate rehab costs and give an offer. I am currently trying to operate in two capacities. I want to buy a rental/house hacking house for myself. Which would be either a multi-family unit or a SRF with 2 bathrooms and at least 3 bedrooms. I'll live in a room and rent out the other rooms to room mates. There is a University near us. The other capacity is my attempt at part-time wholesaling. A professional REI I know told me to start wholesaling just to get into the field of real estate investing. And to start TODAY. This was about a month ago. So I did.

After reading a book on wholesaling it said the first in-person meeting should be with the goal of getting them to sign the contract. Which means I need an offer. How can I offer on a property I can't get into to see before we meet? Should I ask them to unlock the door? Should they meet me there for my initial walk through? 

Also, regardless of wholesaling, even as an investor looking to buy my own houses, a few of the homeowners that called me seemed to want me to give them an offer right away. How? How can I make an offer without getting inside the house? Should I have some kind of ballpark estimate offer before I meet them in person? If so how do I calculate this ballpark estimate. I recently re-read the "Ultimate guide on Estimating Rehab costs" and while it was really helpful and something I'll use when I start getting into the nitty gritty, it didn't really tell me about how to offer on a house I haven't actually got into. 

2. I can't visit properties during the day on weekdays because I work a fulltime job from 9am to 6pm. By the time I get to a property it's pitch black. Especially here in Michigan during the winter. How can I take decent pictures with such poor lighting? My phone isn't cutting it. The flash isn't helping. The pictures are just not very visible. Do I need a professional camera? Do I need to get a flashlight to illuminate the areas I'm taking a picture of? Should I not be walking properties at night? Surely even during the day some parts of the house are going to be poorly lit. Like a room with no windows when there is no electricity. How do I get good pictures of super dark areas? 

3. Since these are off market properties which means I'm not going through a realtor, at least from the beginning, that's leaving me with a ton of problems.  I've been having a hard time finding a realtor. Specifically because all of 3 I've talked to, including the ones at my local Investment Club Meeting, want me to sign an exclusivity agreement. And I've heard from a good number of investors that exclusivity agreements are horrible for investors. Is there another way for me to work with agents to leverage their knowledge, experience and time?  Heck, I don't even have a copy of a good wholesaling/assignment contract for my area. Which leads to my next question. 

4. Where do I get good, up to date copies of assignment/double close contracts for my area. According to the book I read when I first meet the seller in person my goal should be getting them under contract. What contract should I use for my area? Where can I find a good one? I am definitely willing to buy one from someone. Also are those the same contracts I'd use for if I weren't wholesaling and just buying for myself with financing? If not what contracts do I need and where can I get a good, legally sound copy for my area? If I start calling title companies will they provide these contracts for me or do they expect me to have them already? 

5. Also I need to find a good title company to help me close on deals and to hold my earnest money in escrow. Outside of those functions I actually don't know in detail how a title company functions for a real estate investor. How do I screen for good ones? What benefit will they provide me? Will they expect me to know certain things before I call them or will they tell me what they do. 

I called one title company and asked simply whether or not they do "double closing." They said they didn't. But during the call I realized...I barely even understand what a title company is. Outside of the general "helps with closing" and "holds funds in escrow," I don't really know how to best work with a title company. So...need help on that as well. 

6. Is there a way I can entice Agents to work with me without an exclusivity agreement? Maybe I can offer them a part of the deal  on what ever off-market property they help me close? Would that work? Any other ideas? 

Ok that's all I can think of right now. I have to point out that none of the books and articles I've read nor the podcasts I've listened to have talked about these things in detail. The poor lighting. Doors being locked. Maybe they mentioned getting a ballpark estimate for an offer but I can't remember anyone going in detail about it. So I appreciate all the help I can get on this! Thanks for your time! When people tell you to JUST GET STARTED TODAY, I understand why they say that but I feel SOOO unprepared. Still...I am making progress and know more today than I did yesterday so this is good. Thanks again for all your help in advance.  

@Ana Coello

I actually watched a specific video for the letters and followed that pretty much step by step. The only thing they didn't explain is how to find the list. I used Listsource and a free trial of propstream for that. Let me see if I can find the youtube video. Here it is. https://www.youtube.com/watch?v=GFdY5WG_iOY

As for the contractor showing us around houses. The head of my previous city's Real eastate association did that once a month. I'm in Lansing, Michigan now and they did it in Kalamazoo, Michigan. I even took a train back to Kalamazoo for the last meeting just so I could get the experience and ask more questions. 

I actually plan on living in the house and renting out spare rooms. House hacking. I'm mailing letters mostly to find a house for myself and partially to get into wholesaling.

I'd like to buy something that is a bit of a fixer upper so I can start learning first hand about the entire process of fixing up a house. I've been to a few events with contractors where they take you to different houses and talk to you about what different things generally costs. However I think I learn best actually doing it and have someone helping me while I'm actually doing it.

Still I'm making sure to continue my education while I get all my ducks in a row.