All Forum Posts by: James DeRoest

We drive round the neighborhoods.

Literally, Friday night is a really good night to get in your car and go drive round the subdivisions you like the look of. Find the entry/exit roads and drive up and down them, have a look at what the neighbors are up to.

Friday night is when all the drug parties are in full swing. 8PM. Laughing and dancing in the street and on the sidewalk. You see a party at a house and lots of vehicles cruising by - drugs. Avoid. If those houses are on the entry/exit roads to a subdivision - then that's what your tenants will be seeing also.

Obviously have a look round during the daylight hours as well. If the trash is piled above the car, then probably a bad area. Burning oil drums on the sidewalk. Bad area. etc.

I know of other landlords, one in particular, him and his wife don't live together during the week. Several years ago they bought 12 townhouses - he has to live in one to make sure the tenants don't burn the rest down. Unsaleable.

Tapco (in FL will insure just about anything), but it's done at a price, we're paying about $1.20 per square foot. Just don't ever tell them property is empty or it doubles.

We put every house in it's own LLC, but we warned that FL single member LLCs (and many other single member LLCs) are broken and won't protect the member or asset in a lawsuit. FL single member LLCs were broken by a lawyer a couple of years ago.

Doesn't affect us as our LLCs are multi-member.

There is another way of protecting the asset which our realty lawyer told us about which protects you from anything and everything. Send me a check for $1k and I'll point you in the right direction. I'm all for giving advice on a forum - but I'm not that generous ;)

First was a duplex. $56k. Needed nothing. Or so we told ourselves. The sitting tenant in A stopped paying rent more or less immediately, and moved out shortly afterwards.

We got some sub contractors in to quote on wiring and a few other things, and we took their advice like naive idiots. Apparently all the drywall needed to come down in A because it was 'old'. So we got a crew in - "whatever you do, do not take out the windows".

2 days later they had gutted the A side, including the windows. And on the 3rd day a guy from Building Inspections put a Stop Working notice on the door. Because we had taken windows out.

The B side got one tenant who didn't work out. Put B with a property management company who really couldn't be bothered with anything that wasn't on the beach. So they just put sub-human tenants in it all the time and kept sending us repair and cleaning bills. Apparently one of the managers was "dying from cancer" and took his eye off the ball. Wasn't even getting deposits - let alone 1st month!! (Several years later we met the guy who was dying from cancer at his new employer. Would seem he made a miraculous recovery somewhere along the way.)

Anyway, we eventually stopped that, and for 2 years we left the building empty.

Then there was the night that 29,000 gallons of water went missing. Got a $170 water company bill. And a $150 sewer bill.

In 2009 some lady was desperate to buy it so we sold it to pay for our wedding.

Just before closing, I got whacked with a lein for the garden being overgrown - despite our new property manager (for the other properties) telling us repeatedly that he had had the garden sorted!

Even on closing there was a problem. There ended up being a withholding tax on the final amount that took another 2 years to sort out. 

The place was cursed. Built on an Indian burial ground I swear.

Think you and the seller are both stark raving mad, for totally opposite reasons!

The ROI as already mentioned is beyond awful. Let someone else get stuck with the over priced duplex.

You can (and will) do far better than that.

It happens.

We're nursing a bruised ego after not making a phone call. What a mistake. House was picked up by a wholesaler, who immediately turned it for a $3k profit. I tried to crash the party, failed, but at least I ruined the wholesalers day.

He told me with some excitement that he had made $3k on the deal. I dryly told him that if he had come to me, he'd have made $20k. That'll teach him not to market properly.

In my opinion.....

You made a mistake. I hate the haggling on deals, I set a price, I see the counteroffer and I walk or bite. I don't go round the houses on terms. I either want it, or not. I just don't play games, and when a seller is offering a 33% discount of what he wanted, he won't either. And I hate to say this, you argued over $15k down payment, yet in the original counter offer the guy dropped the interest rate from 7% to 4% and put the price up. I've no idea of the specifics of financing the extra $10k for a 3% reduction in interest, but there really cannot have been much in it.

Some people like the chase of a deal, many don't. I've had people start haggling with me, I've got better things to do. 

The second problem was that the moment you declined the counter offer - this property was immediately put under contract with someone else. 

The original price was $160k, you are offering round the $120k mark - what you did was educate the sellers agent that the seller would entertain offers around the $120k mark. More specifically, that he would accept $115k cash.

Once the sellers agent knew that there was a new amount on the table ($115k), the sellers agent phoned up all his investor friends and used your calculations to sell it to them.

The sellers agent had ZERO interest in you the moment a $120k price was defined, he had people on the line ready to take that property, and his commission just went from 3% to 6% as he got both buying and sellers commission.

You did all the legwork, you got greedy over a minor amount, the deal walked away.

I hate losing. Play to win.