All Forum Posts by: Jan Kerr

@Jerry Wolf What companies have you received rejections from? 

On a new purchase, it would have been prudent to get a Home Warranty. Often the seller will pay for it out of the proceeds of the sale for the peace of mind for the buyer. In the future always put that into the contract whenever possible. It may not be too late for you to get a home warranty on your own. Contact yourt closing agent and have them recommend the companies they ususally see being used in their transactions. The warranties are usually about $400 per year and they cover all the house systems, including HVAC and all appliances that were present at closing, transferred to the buyer by the seller. That warranty may be enough peace of mind to get insurance coverage. 

@Laurence Obi Conratulations on taking your first project to completion! I love the fact that you just dove in head first with realistic expectations, knowing the most value you would take away form it would be your education. Bonus that you came out with equity too! I think you are smart to get the payments covered through renting it. The choice of short term AirB&B is also a good choice for higher rental potential as long as you have strong local property management to handle the demands of short term tenants' needs. My advice is to refinance as soon as your seasoning period is over. Not all conventional loans/lenders are the same so start shopping now to find the right one. You are shopping for the shortest seasoning peroid as well as the lowest interest rates. Then you'll get to choose whether you like the cash flow it generates and keep it or cash out with all the equity. You may get to do both. Cash out refi and keep it if it still cash flows. Good for you!

@Rosaria Pipitone I noticed one thing that has not come up that should be mentioned. Always, Always, Always charge a security deposit. It should be enough to cover damage or excessive wear and tear. For instance, cleaning carpets and fixing nail holes, even painting after a long time tenant is only considered normal wear and tear. Fist or foot holes in the wall is considered damage. 

Do not make the security deposit the same as the rent. It has ro be a different number or the tenant may try to argue or confuse it with their last month's rent. If they do that and you let them get away with it, you will not have enough money to pay for any repairs or damage they cause. I like the security deposit to be slightly higher than a month's rent and make it a round number. 

By law, you must keep the secutity deposit in a separate account specifically for this purpose and you are not allowed to co-mingle it with your standard reserve account. That money belongs to the tenants. When they move out, you have 30 days from the date they vacate to clean and repair the unit and then deduct any money you withhold to pay for excessive wear and tear or damage. You must give the tenant an itemized list of what you decucted and why and refund the remainder to them within 30 days. 

When collecting the security deposit, make a receipt stipulating that all names on the lease age 18 or older are considered to have paid the deposit and that any refund upon vacating will be made out to all names on the lease. This statement should also be written into the lease. You can send it to any forwarding address given to you. When sending a tenant the refund of their deposit, make sure that you actually do put all names from the lease on the check. This will require that all of them must endorse the check in order to cash it. This is for your protection, in case one of them argues that they paid the entire deposit and they are entitled to the entire refeund. Let them work that out for themselves. If it becomes an argument between them, they will not be allowed to draw you into it, avoiding potential lawsuits. 

Good luck!

@Account Closed Hi Javier, I would be happy to help you. I am one of the mentors that those ridiculously expensive seminar companies and gurus hires to mentor their students. I have been doing so for over 20 years, but I am also a real investor walking the walk. I have written much of the curriculum taught by several of those I have worked for. I know your markets because I have several students there still. Please review my profile and if you like, I would be happy to give you a free 90 minute, one on one, mentoring session. At the very least we can get you started in the right direction. By the way, they never paid us anywhere near what they were charging the students. LOL! 

@Steve Lynch Baby steps will get you there eventually for sure if you keep at it. I've worked with a lot of people and I can tell you with absolute certainty that the most successful beginners never even thought it was possible to fail. Don't listen to anhone who even suggests that such a thing is possible and just keep working. I would be ahppy to give you a free 90 minute one on one mentoring session over the phone if you like. Let me know.

@Nicolas Lopez Hi Nicolas, forgive me for laughing, but I think your situation is funny, which is a good thing, by the way. LOL! We've all been there, and I understand letting it go to voicemail if you weren't prepared to take the calls. I answered my phone back when I started over 20 years ago and I tripped over my tognue a few times before I figured out what I wanted to say or the right questions to ask. That is how we learn. Don't worry about what you missed. If you captured any caller ID's you can call them back later when you know what you want to say, or just move forward with new callers. I can help you with a script if you like, but it is better and more genuine for you to speak off the cuff or practice until it doesn't sound like a script. People will spot a script a mile away. I'd be interested to know what your ad said so I can help prepare you to answer your phone next time with confidence. Feel free to reach out to me or connect after you've viewed my profile. I can give you a free 90 minute mentoring session if you like.

@John Lawson Hi John, I have worked with a lot of people in Bakersfield. I've been watching all the markets for a long time. 20 + years. Baklersfield is one of those places that has a reputation for extreme ups and downs throughout the market cycles. Actually most of CA is that way. Different strategies work best at diffrent times within the cycles. There are always strategies to employ during whatever place in the cycle the marklet is in. The trick is to know which part of the cycle it is in at the moment you are looking. Then you can evaluate the proeprty using several different straegies and formulas to determine the best way to proceed, or if at all on any particular deal. I would be happy to show you how to find the data you need to evaluate the market as a whole and specific neighborhoods (zip codes) individually. My advice is to start building your power team there now. Feel free to visit my profile and connect with me. I can give you a free 90 minute mentoring session if you like to help you get going in the right direction.

@Steve Lynch Hi and Welcome to BP! this is a fun and exciting business, but it is not a get rich quick prospect. We investors work hard and sometimes long hours on our projects, even if we have delegated a lot of it to professionals. This business is alsmot 100% relationship based. If you are a super introvert you are going to have to work at getting out of any shell you have created for yourself. Baby steps are fine, but if you have difficulty speaking out or making connections it will take a lot more work and time until you blossom. Do not be discouraged though, this is the perfect opportunity for you to grow and there is a lot of help here for you! You've made the first step Congratuilations! By the way, you became an investor the very second you made your mind up to do it. Own it!

@Sean Canada Hi Sean. It's very smart of you be asking these questions now instead of later. 

First, you do not have to go foreward on every offer that gets accepted. You have three days to submit the actual earnest money deposit once your offer is accepted. When you submit the offer, you submit a photocopy of the actual EMD certified check so they know you have it.

Secondly, your due diligence period is just for that. If issues or problems with the proeprty are revealed that were not obvious or previously disclosed during your inspection, you can back out and get a full refund of your EMD as long as you do it WITHIN the due diligence period. That said, make sure all of your inspections are completed before that period ends. If your reason for wanting out has to do with something else, like financing, do not say it that way. Make it about the proeprty or its condition, just to be safe. Some newer contracts are trying to elimate any contingencies related to financing. Especially for investors. Occacionally banks and govenment entities will want an addendum signed along with the initial offer stating that your EMD goes hard on day one. All the more reason not to give it up until after acceptance and some due diligence.

Finally, If the counter offer you receive back includes addendums that put deed restrictions on how fast you can sell or for how much, then do not make the offer unless that works with your plans and exit strategies. For examply, Fannie Mae, HUD and Freddie Mac and some banks now state that you cannot sell the property for more than 105% of the purchase price for 90-120 days after closing. However, if you can document proof of capital improvements to the proeprty to account for the higher selling price they can waive that. Normally though those deed restrictions are nothing to worry about becasue a typical flip takes that long anyway, especially if you are rehabbing it. 30-60 days rehab time, marketing, going under contract and then the "owner occupied" buyer usually takes at least 30 days to close and get their finacning funded. By then the time has elapsed and there's no problem.

Since you are just learning, ask your agent to send you a blank copy of a Real Estate Purchase Contract and Addendums from those agencies to study so you can get familiar with all the terminology and wording. Some will give it to you, others won't becasue they are worried that you'll not use them when it comes time to make the offers. Be loyal to your agents and allow them to help you, especially when it comes time to purchase. Their commissions are paid out of the proceeds of the sale from the seller's side. It costs you nothing to use an agent when you are the buyer. As long as they are earning their commissions, I love working with my agents. I am happy to answer any other questions you have. Please check out my profile and we can connect if you like.

@Sharon Whipkey Hi Sharon, Nice to meet you! I love your attitude! I'm 55 and started investing when I was 28. I love Real Estate and I cannot imagine just being reitred. I'd get bored out of my skull trying to fuigure out how to occupy myself without it. I don't think I'll ever quit investing. It's too much fun!