All Forum Posts by: James Edmister

Joe, your question about paying off credit card debt first wasn't the first time in this thread the question was asked. The credit card balance is a more recent thing. My wife and I used the credit card for some fertility stuff here recently. We just haven't paid the card off yet. The month before it was considerably lower. Long story short, it's getting paid off real soon.

Everyone, thanks for all the perspective and the comments, it's given me a great deal to think about regarding my REI future. I'm going to continue my REI education and I am going to think a little harder and make sure we are in a better financial position before jumping into anything.

Wow, this thread really blew up! Let me add some information that some are requesting:

Student loan interest rate: 3.9% Average, $1,500/mo minimum payments

Our budget: We have been following the Dave Ramsay approach for monthly budgets for a while now and have had a lot of success. Monthly bills have been reduced to a minimum (or they were last year anyway. It might be time to negotiate better rates again using the Tim Ferriss methods)

Credit cards: We only carry a remaining balance we've been working on for a few years. Only one credit card left that we haven't used in years. Out of principle, we don't use credit cards. Once this one is payed off, I don't see us using it for anything. No self control issues there.

Cars: One car payed off, one car has about $8.5K left. (I was conservative on my estimate when I made the initial post)

Current Living Situation: Bought the house a few years ago and we want to stay here. We love the house and have no interest in moving or renting it out. One of the requests my wife made was that we don't move from house to house every year or so just to get the FHA loan. Our house is practical and not expensive. If it was a huge liability, it would be one thing, but it's a very modest house and very affordable.

Cash Reserves: Easily able to put 25-30% down on our first property in the price range we are looking for with enough to cover the holding and rehab costs.

REI Aspirations: SFRs, passive income to cover living expenses and re-investment and, of course, financial freedom.

Questions: Even though we have a lot of student loan debt at low interest and banks would be less likely to give us more than a few loans on different properties, wouldn't it be a step in the right direction to at least obtain a few properties to start the process? The cash flow would either serve to pay of our bad debt faster or put back into the properties (or get the ball rolling on another property, given we can find a lender)

Someone mentioned that wholesaling is a full time job, but several of the guests on the BiggerPockets podcasts have done wholesaling part time to start. I understand the learning curve is steeper when starting this way, but I am not in the habit of jumping the gun on a project before doing my research. I know, not all scenarios can be considered before starting in on this, but there are amazing resources and lots of people in my life I can turn to for advice. Has anyone here done wholesaling while holding a full time job? i would like to hear your 2 cents.

I am very appreciative of everyone's advice so far. I am happy to see that some of you are being blunt and trying to tell me 'how it is' rather than sugar coating it, also. I want to hear as many opinions as possible to get a better handle on what is the right move for me and my wife so we can take the next step.

All this really helps me out. Thanks everyone for your 2 cents. Anyone else have anything they'd like to throw in?

Thanks everyone for the feedback. I'm interested in buy and hold. If I find the means to do so, couldn't I still get a few properties while I pay down our student loans and hold on to them just on the side? I understand the debt to income ratio is pretty lopsided at the moment but I believe there are ways to at least make a few moves in the real estate game. What about wholesaling to pay the loans off faster? I understand that wholesaling is not the easiest real estate path to take when starting out, but I want to do something to get going. What do you all think?

Ok, I have read through the student loans posts and didn't see anything quite like our situation, so I figured I'd lay it out and see what you all thought.

My wife and I have about $230K in combined student loan debt. She's a doctor of anudiology and I'm an engineer and both went to school full time and lived off the loans. Seemed like a good idea at the time I suppose. Most of it is private through Sallie Mae and Wells Fargo, so not much hope in the way of loan forgiveness or a settlement unless we go into deferment, which we won't do. 

We also moved into our first home a few years ago and have about $140K owed on the property. Credit card debt is around $4k and we have one car payed off and one with about $10K remaining on the loan.

We make enough to make the minimum payments on everything and have maybe an additional $1.5K a month.

A lot of the suggestions in the student loan posts were to move into a duplex and rent the other side out. That is not something my wife and I are willing to do. What, do you think, is the best way of going about getting into real estate? Should we work on paying down our student loan debt as much as we can or continue making the monthly payments as we always have and use the extra to finance our first property?

Putting in a security system is a good idea if you're in a sketchy part of town. I don't think squatters is something to worry too much about but theft definitely is. I'll consider doing this in the future. Thanks! Anyone else have any thoughts?

Hey everyone, in the BP podcast #50, a flipper had just finished rehabbing a house in north Detroit. When he came back the next day, someone had broken in and changed the locks. He said he had to get in touch with his lawyer and it ended up taking 90 days to legally remove the squatter. A few questions I have (and I was hoping for some Texas perspective on these) are:

Why did it take 90 days to remove the squatter?

How would that situation (within confines of the law) pan out in Texas? I would think the cops would forcibly remove the squatter within a day.

Is there any part of the insurance that would protect the investor from damage or other costs if this were to happen?

Have any of you (or someone you've known) had this happen in our state?

Again, this is hypothetical. I would be blown away if it took Texas cops/lawyers more than a few days to remedy this. Thanks!

These are all great suggestions. In my job, I manage a handful of people and one of the things I need to keep an eye on is tardiness. I noticed, when I first started, that I wasn't strict with the policy and it became a constant struggle to get people to be on time. I decided to put a policy together and stick to it and not allow everyone to be 'close enough' and surprise surprise, I now rarely have to enforce the policy because everyone knows what I expect and what will happen if the policy is violated. On one of the biggerpockets podcasts recently, I think Josh mentioned a good book on tenant management is 'If you give a mouse a cookie' which I thought was hilarious but it's also true. I like the idea of encouraging the tenant to set up ACH to avoid these fees. And if they won't, a notice to evict will probably shape them up. Great posts, everyone! Thanks!

This is one of those questions that popped in my head while I was driving home from work the other day. Here we go.

Say I have a tenant that, for the first time, pays rent 1-2 days late. After reading the 'late payment' section from the book on rental property investing, I know there should be a set late fee in the rental agreement and I should adhere to the rental agreement to prevent the tenant from taking advantage of me. For argument sake, let's say the late fee is $50 and the monthly rent is $1,000.

What if the tenant ignores or flat out refuses to pay the late fee? My first thought is to let it go, but next month the same thing happens. Only this time time it's 3 days late and they simply ignore the $150 late fee. Now I understand there are legal issues with the tenant refusing to pay the fee, but wouldn't it cost the owner more to pursue action against the tenant? This also becomes difficult if the tenant is in the beginning of a year lease. 

How do you enforce late fees if the tenant just ignores them and continually pays rent a few days late every month?

Originally posted by @Paul Ewing:

Welcome James. I am just North of Azle. There are some deals around, but it is much more picked over than a few years ago. What are you looking to do? Wholesaling, Buy and rent, Flipping, or something else?

 Hey Paul, great to hear from you! I am interested in buy and hold and building some passive income. I'm not totally sure where I want to invest yet, but I've been driving a few different areas looking around. I still need to work out strategies and network a little bit more. Who am I kidding, I need to network a LOT more and get to know some of the people on the site and in my area. So far everyone has been great and I'm really enjoying what I'm learning so far.