All Forum Posts by: Jeffery Waicak

I am all for this type of investing.  There are a few positive points to the side of class c sfr that are being left out right now

 1 ease of entry. The first house I bought,  after my initial crash and burn, was bought cash for 6500. I had just cleared bankruptcy, that took like 2 years due to some seller financing,  had no credit, was scared of debt. I bought it, lived in it, a year and about  15,000 total in, I had a house in good repair.   The plumbing furnace , kitchen, and bath were all new.  I did all repairs myself except install the carpet. I have had good and bad tenants in there,  i think right now,  i have a solid long term tenant.

 2 learning how to skills.  As said I did all the repairs myself.  This is in 2006. Before I knew how to search the internet. Some stuff went well, some not so much.  Another plus is when you're in a lower rent area, people don't get upset if the grout lines aren't perfect. They aren't going to pass because it has no dishwasher or garbage disposal. If I have no dishwasher,  what are my future repairs on it?

  3 low negative cashflow. I have no mortgage, my taxes and insurance are low. When I have a tenant not pay, or move out my immediate cashflow goes slightly negative. If I had a mortgage on it, the payment would be due while I was turning the unit.  

4 more stability of cashflow through averaging out.  In my area, i can be all in 25,000 and pull $600 a month. I can do this consistently,  doing the gc duties,  but farming out the labor.  I have been at it a while and have a decent circle of people. But the point  is for  $125,000 I have a $3000 rent roll,from 6 people. I usually run better than 90% collection of rents but i rarely take less than full rent so let's say 1 doesn't pay, i have $2400 received. I zillowed my personal   house, it's zestimate is 163,000 as an investor,  you could get it for say 130,000 and it's rent is 1200.

 5 less picky tenants.  Like I said, when I started, doing it on my own I did some work that wasn't perfect.  Not bad or unsafe,  but not perfect. My houses are the equivalent of a 1992 Honda 5 speed with crank Windows. Not a lot of bells and whistles, but inexpensive and mostly reliable, if it breaks not hard to fix, parts are cheap.

  6 pull cash out. If i were leveraged in a house, 80% and i NEED CASH!  I can't really get it, not an easy refi, hard to fsbo so an agent eats up your equity.  I can use mine as collateral to a hml, or sell to an investor for cash. Yes It will suck, but I said need cash. 

   7 longer term tenants.  I may be completely off base here,  but since we are ingrained from birth in America the American dream is to own a home. If I have a solid fico and income, i can't see me staying as long as someone without those things.  I may be completely wrong here,  I'm sure there are exceptions to that rule even if I'm correct

  8 better people.  I again,  may be way off base, but from personal experience,  find that the biggest jerks would be in high end rentals.  When I have delt with people that were actually wealthy,  they were great. They didn't care in a good way, no beating up on price, polite, friendly.   The wannabes, not so much. They needed to squeeze every penny out of everything so they could live that image.  That's who I picture renting  a $150,000 house here. My tenants are, as a general rule  good people, they work, pay the bills they just make less.

     There are definitely downsides to this investment style,   they have been laid out all over the site. I won't buy a property I wouldn't live in when complete. The neighborhoods that i invest in, i consider safe with poor schools, and an income tax. If not for that, i would live there.  Sorry so long, just my thoughts 

to some extent  yes, but no more than any other in that area. I try to work with  my tenants  as long  as they are trying. Most would evict  quicker than me. Some have worked out well, some have burned me. I own it cash so if i get paid late it's not a problem to me.   I've been told on those, multiply monthly rent x10 for annual. It hasn't been that bad but not much better either 

Perry township,  Jackson  township  stark county  ohio 

Would you be ok living there? If so, it can work. I bought my first properties  in a neighborhood most would call d class. I paid 6500 for it and stayed for a few years. In that time I bought another house a stone's throw away. It wasn't a bad spot, had to lock your stuff up, but i was cool with all the neighbors. 

   I still own it  now, it has paid for itself several times over, i would recommend it.  

from what  i understand, at least in my area there's a process.  Once the bank  starts foreclosure the property goes to sheriff's sale. At this auction the bank will have to be there and must buy it back for up to  60% or something like that of the value. They auction it twice if it doesn't go for enough. This qualifies them to use the pmi  to recoup losses. Then after the bank owns it again, they can sell for what it's worth.  

   As an example,  I bought a reo  The realtor said it had $70,000 in loans. I wouldn't doubt it. It had newish, 10 years or less, roof,siding, and Windows. So .6 × $70,000 Is  $42,000 that's the lowest it could go for at sheriff's auction. It wasn't worth 70 or 42. I got it for $6500. 

hello community   

  I found  a deal in a small city ,about 30,000 people  or so. the park is in bad shape. it needs replaced, mowed, cleaned up. There's 41 spots  16 mobile homes. 9 are park owned. i believe that only 1 or 2 people are paying. The manager moved, owners are out of  state. 

 I have 2 questions ,   1 what is required in Ohio to put a home on a lot? these lots have 2 strips of concrete  I'm not sure this is adequate .  2 how does the Eviction process work? If the tenant owes and does not pay, what happens to the home ?  

   thank you I appreciate your help 

@ glenn mccroy, good points.  Yes we need  to look into coding and zoning. The building needs a good bit of work, so in this case it's a good thing. I hadn't thought of fire suppression and I'm sure that can get expensive quickly.  I do know that these do not operate under normal rental rules. We're still in our research mode.

@Chris virgil-stone. I have been renting since 2008. You're right there are a good bit of problems with that. 

    From what I understand,  you can drug test, twice weekly at your discretion. There will also be a house manager,  that's why only 16 pay, manager gets their own room and usually about  200 per week.  The people living there sign a contract, with the rules and regulations of the house, if they violate, they have to leave. No eviction needed. 

  My big concern is if it doesn't work out, I will have a big, 9 bedroom 3 bathroom house in a not great area, so resale will be super low.  

 @ Baylis Sappir, thanks for the encouragement,  I will keep you posted 

My wife has an idea to start a sober living facility for people recovering from opiate  addiction.  I like the idea for several reasons.  1 there is a huge epidemic in my area, and there seems to be no end in site, I like the idea of helping people,  I understand that most will probably relapse and that's going to be hard.  2 there seems to be good money in this. 

  We found  a triplex for sale within easy walking distance of the bus line, as well as the suboxone and methadone clinic. It currently has 3 apartments, 2 bed 1 bath each. I talked to the owner,  he said we could easily convert  it to a 9 bedroom 3 bath facility. At that, 1 bedroom is used by the house manager,  the other 8 are double occupancy,  so 16 people,  at $100 per week.

    The building is priced at 29,900. I think I can be built out all in for 60,000. That being said, I haven't even seen pictures of the inside.   But, the numbers seem great. There's another one in my area, I called,they charge the same $100 a week, and have a waiting list to live there.

   Am I missing something,  anyone with any experience? Thanks and sorry for posting in innovative strategies,  it is to me though lol

I would say just  keep him around as a friend.  I know they say that your income is the average of your 5 closest friends. I'm not sure I agree with that. It sounds like you hang out when you have the time, and when you don't, you don't. When you do hang out its video games,  good conversation, I could imagine  some take out food, a few beers, maybe  a hit or two. So Imo, that sounds like an inexpensive  fun night.  Could be wrong,  I don't game, just not me. Maybe, sooner or later you'll hear the pop. That's when his head pops out of his ....  maybe  not.  But what I will leave you with is, of don't have many friends,  I've got a healthy pile of  money.  For me, it's much easier to make money than friends.