All Forum Posts by: Jayme Jahns

For the rent price, if it was increased by 100, and the renter wanted to move to a lower price place, they would likely find it is still the lowest price in that area. 695 was very low. 

But on the flip side, I suppose it's possible that it could have been hard to keep it rented at the price. 

My original thought on rent prices with current long term tenants has always been not to raise the rent and keep the long term tenants happy.

But that is not fully realistic long term. You would need to raise rent eventually depending on a number of rising costs over the years. Otherwise all rents would never change and we would still be paying 5 cents for a gallon of gas and 50 dollars a month for rent. Funny enough, median rent in 1950s was 600.

When costs increase, that does affect rent. If a renter doesn't agree with that, they are welcome to look elsewhere only to find rents are increasing everywhere. 

Jason, 

Look at you with the insiders info! You wanna hook a girl up? Jk You are from Florida anyway, so wouldn't see the deals in my area.

Seriously, a smart strategy though. If I had enough to invest in that many properties a year or had an interest in selling to others, I could validate the 200 a month. 

But speaking on foreclosures, are those usually cash only? When I asked my agent about those, she said they usually get bought in cash bids and it's hard to beat a cash bid. 

And what about those sites that you can pay to see foreclosure info? Are any of them worth It? I almost paid for one once but was worried it was a scam. There are a lot of sites that do it too, so had to figure out which ones are legit 

Cody, unfortunately at the moment in Washington state, there is very slim options especially if you want a multi family home. But also, I was very new to this so I honestly was not completely sure what i should expect in returns as well as some bad advice from people that stood to profit from this. But after researching on my own and running the numbers all kids if ways, I just could not justify what they were advising me. I had trouble finding a unbiased third party that wouldn't make money from me to get advice from which was why i turned to this forum hoping I would get some very honest advice from some seasoned professionals. 

Which I did and then some. Everyone here has been very nice and helped me to validate my uneasiness about this sucker deal. 

I definitely have a better understanding of what not to do. I'm sure to you, being a professional, my question sounded really odd and naive. But, I was frankly. 

I felt like it was a bad deal but my confusion was with my real estate agent and a family member telling me that it really was good for this area and that the appreciation was bound to happen and that i would be able to raise rent. Also they said if they had the money, they would do it. I kept looking at my math and wondering what is it that I am missing that they think this is a good deal? 

But being so ignorant in this field, I wasn't sure if my math was wrong or my outlook in general. 

Either way, I read all the advice on here, concluded that this obviously is a terrible deal and am now just stepping back for a while until a perfect deal comes up (quad like I originally wanted, for the right price with a good cashflow)

I've also got into contact with a fiduciary CPA today, thanks to advice on here. I didn't know who I could trust to talk to without forcing some kind of sale on me or making commission. 

But hey, at least my post got a lot of attention and feedback. Lol 

It's been nice meeting some of the experts and getting great advice that actually makes sense. And making some professional contacts too. 

We are not planning on living in it. We own our house outright except for the heloc which ends up being a pretty low payment since its a relatively small amount. 

We definitely want a quadplex or for the right price, a triplex. We have ruled out a duplex after this whole deal also being that it's less diversified as a quad where if you have a vacancy, you still gave three other units for possible income. That is direct advice from the CPA I talked to. 

Yeah, I was going to say houses over here rarely go as low as that without some serious flaws. Like I've seen just land going for that price and not even a large lot. But I can make the comparison to what you are saying about a lot that has multiple houses except at the 115,000 price. 

Basically I want to stay in my area for a number of reasons, most of which I got from advice in this forum. 

First, it's my first property and having it near me makes for less complications

Also, we don't have state tax which would eat some of our profits and having my place nearby will allow me to save on a property manager too.

I'm also not familiar with the area if it were out of state which could allow for some variables like crime rate or vacancy to escape my attention before buying. 

I may do that down the road once I have more experience as well as capital to invest out of state. Also, by then, maybe I can gain some contacts that know that market and that i can trust to help me to get a location that is good.

J-chen 

Alright, I will keep those points in mind. 7 years to get my money back and be super picky in my real estate deals, basically don't settle. Especially at the advice of a real estate agent, who stands to make money on me. 

Lol, well, I was never one of those type of girls to seek out "hot guys" on tinder or online at all. Psychopaths is pretty much spot on. At least that's my devil's advocate playing it's role. 

Love the comparison though. Haha

And yeah, that duplex in Ocala does put things into perspective. It may take some time for duplex prices in my area to drop that low again but, I'll hold out for it because like you said, the pickier you are, the better you will do. 

I'll just always be looking at the market waiting and saving money until that perfect deal pops up. 

Thanks for taking the time to write this response. I'll take this to heart and try to live by it. 

Keep on snappin necks and cashin checks

Jason Chen, 

First, your awesome. Lol! The way you described the deal was hilarious. Your right, bad deal for sure. I should have known from the get go. What's funny is 215 is 20k BELOW asking price. How do they expect to sell that place at that price?.. let alone at 215. I think to be making any reasonable amount worth the effort, the price would have go well below 200,000.

Originally we were trying to buy a quadplex that brought in 3500 a month in rent but then some big shot came in and bought it and flipped it to a price increase of 200,000 which was absurd. We took too long getting financing figured out. Anyway, that was where we started and soon after a couple months all the quads were sold, then all the tri's and our real estate agent was trying to get us to settle on a duplex which is where this came into the picture. 

But, I'm glad I came on here, got a reality check about 20 times by 20 different people. Prevented a big mistake. 

I actually talked to a CPA today and he had some good advice for me. Nice guy, and he didn't try to charge me. He basically gave me free advice and we talked for a bit. He did say if we wanted a full review, it would cost us but he gave us a bunch of advice to start off with. 

Secondly, this CPA said he doesn't like Helocs and recommended refinancing to a fixed home loan bc the interest is lower and not adjustable. Before doing that, we would like to pull aside our down payment into a savings and then get the 30 year fixed to pay the heloc.

We want to save the down payment until a clearly good investment home comes along at the right price. Ideally a quadplex. 

But, from what I have heard, if someone wants to use a heloc for a down payment, they can. I got approved for the new loan with them knowing I was using my heloc for the DP so I'm not too sure why people say they won't allow it. My lender was aware and I got approved. None the less, I'm not doing it that way.

Travis, I get what you are saying and we didn't know that it could be so difficult to use our heloc as a down payment. Was it a bad idea to have paid off our home rather than investing all that money? We were told it was smart in saving us so much interest but now we no longer have liquid money unless we use our approved amount in our heloc. We have not taken it out yet, just have been approved.

Maybe there is another, more worthy investment we can look into. For now, I'm gonna back away from real estate. 

Thank you for being honest and saying it in a polite way. 

In general, this whole ordeal has made me lose faith in humanity, except for most of you on this forum who have given honest advice with nothing to gain. 

We have had far too many people we have tried to get advice from that either have something to gain, and give bad advice or have nothing to gain so refuse to advise. 

Aaron, 

Thanks for clarifying on "financial advisors". I honestly didn't know who was or was not one I could trust. So, at least I will know for future reference. 

I'm assuming that is someone I need to hire seperately? I'm going to look into the cost. 

Isaac, 

I appreciate your input on the area. My real estate agent said it was not bad but not good. I wasn't completely sure since we rarely go there. But the fact that it was described that way had me questioning it.

Heather,

I definitely didn't know that auburn was the slowest growing market and that is great advice to check how many and how long foreclosures have been sitting on the market. 

Thanks to everyone for all the info and advice. And I appreciate the encouragement Aaron. Unfortunately this whole situation has been stressful and it's been very difficult to determine who I can trust in getting any true advice. My spirits are down in any hopes of continuing pursuing this. 

I've had so many trying to profit from my potential loss, even had a family member that may have given me not necessarily good advice to potentially make money from me whether I lose or not. 

Anyway, Take care everyone.

David Clinton, I could be off base here but are you taking advantage of my newness to real estate investing? 

I know that eastern Washington houses can have a hard time renting out and typically don't cost as much in general. 

Either way, sounds kind of sketchy. 

I didn't think advertising was allowed in these forums. Just advice. 

But thank you, anyways. 

Robert, it's not my approach. It's what my real estate agent said. But also true, we will likely be priced out. In which case I was considering out of state or nothing. 

I wasn't overlooking negative cash flow. As my post indicates, by my math I presumed it could be break even or gain barely. But I was afraid, repairs could exceed my estimate.

Also, Washington state market may be different than your area as well unless you also buy out if state and are familiar with our area. 

I think the real pros don't have to say they are pros imo.

Daniel Hughes,

The insurance isn't 400 a month but none the less someone corrected me that 400 a year is wrong. It's 800 a year which would be 66 a month.

Here is how I calculated

Income 1,390.00

Expenses

Insurance 70.00

Mortgage w/ prop tax 1,033.00

10% vac  27.80

15% repairs 209.00

Total expenses: 1,339.00

1,390  - 1,339 = 50.00 (gain)

To change my estimation, I am planning on raising rent to 1490

Which would make gain at 150.00

But, I could be wrong in my math. 

Either way I'm not feeling comfortable with this deal in case repairs  up higher.