All Forum Posts by: James Jacobs

The area is actually a great area. I live a few miles away and know the area very well. I think it's more of an issue with people just overextending themselves and the landlord accepting them. It is definitely concerning, though. That's why I'm seeking advice from you experts! :) 

Good morning, everyone!

I do not own any rental properties and am looking to make my first deal. I visited a large duplex (10 bedrooms) property last night that I am interested in. Both sides are rented. One side is month-to-month, the other side is under contract to October. It is located in Michigan.

Pros:

• Good location
• Analysis shows good cash flow and good CoC return and fits my model
• Good building structure
• Finishes are fairly tenant-proof for the most part
• It is listed at a fair price, but definitely not at a discount at all
• Seller is moving out of the area and seems fairly motivated

Cons:

• Both renters have pets
• I am told the one renter works 2 jobs and the other side renter has 3 jobs (doesn't sound too encouraging) for the financials 
• The unit on one side is an absolute mess and there is visible damage from the renter (probably a few thousand dollars worth)
• Since both sides have pets, there will probably be quite a bit of clean-up at moveout time that I'm not sure who would pay for (maybe it's in the lease agreement?)
• With a conventional mortgage and 20% down, it would tie up quite a bit of my cash. I don't want to get too creative with financing on my first deal. If I tie-up a fair amount of my cash, I want to make sure it is setup for success.
• Both sides have finished basements (maybe a risk for leaks?)

I feel like most of the cons are pretty short-term, but it seems like a lot of cons for my first deal. All thoughts and words from the wise will be greatly appreciated!

@Dan Perrott @John Casmon thank you very much for the advice. I am supposed to be able to visit and inspect the entire property in the next few days provided they get things sorted out. The owner doesn't seem to be hiding anything and was quite open and apologetic about the situation yesterday.

Thanks again for the great advice! If anyone else wants to chime in as well, I am all ears. 

I don't have any rental properties yet, but have been doing research for a couple months now and want to dive in. I found a potential deal on a duplex that I like and am investigating more thoroughly. My analysis shows that it would cash flow well and it is in a good location and fits my model/goals. I went to look at the property last night and the owner wasn't able to let me in because of an issue with a tenant. He said that the one tenant is a great long-term tenant with no issues. The other tenant is a boyfriend/girlfriend situation that is having a domestic dispute and is splitting up. The boyfriend is leaving within two weeks. The girlfriend says she can pay for the place herself. The lease is up in October and is month-to-month after that. What do you suggest I should do for due diligence prior to proceeding with the deal? Should I let a "temporary" problem get in the way of what seems like a deal worth closing? Any and all advice will be much appreciated!

Hello! I just wanted to stop in and say thank you for all of the great info! A couple months ago I started looking for a third source of income and have always considered getting into REI. A friend introduced me to BP and I am very thankful he did. I have been immersing myself in the podcasts and have really enjoyed them. You can find out a bit more about me in my profile if you'd like. Thanks again for the great info on this site and in the forums! With all this info, my goal is to make my first deal (or fifth deal...see profile) within the next two months.

@Allen Fletcher Thank you very much! I'll definitely check out the blog posts. Thanks again! 

My wife and I are complete newbs. Actually, I am a newb and she is a mostly-willing supporter of my newly acquired desire to be an REI. We live in Michigan. I think I am close to closing on my first deal, and assume creating an LLC would be smart. Two questions:

1. Are there any reasons NOT to create an LLC?

2. Are there any advantages to create the LLC in my wife's name so that it is a Woman-Owned Business?