All Forum Posts by: Jeff Ronningen

@Aurus J. Sanchez. I listened to a webcast in which Brian Turner said one of the most important skills for REI is the ability to analyze deals quickly and effectively. Have you run the numbers? Are there 3 and 4 family properties in your target markets which can generate the cash flow you want? Do you qualify for financing? If no you need to go back to the drawing board.

@Jeremy Sharp All the info is on Hamilton County Auditor website. On home page click on “Property Value Complaint Form”. There is a limited window to appeal. You missed this year. I’ve called the auditor’s office before with questions, they’ve been helpful.

@Julius Robinson Bought 4 family as owner occupant with FHA loan. Learned many things. At that time this type of loan would allow you to borrow nearly 100% of purchase price. That was based on 3% down on first $25K and 5% on the balance, then financing closing costs. Using this type of financing with a 30 year loan will result in a very slow accumulation of equity from paying down principal. After 3 years principal balance would only be reduced by about 4.5% (compared to over 14% with a 15 year loan). This provides little room for market fluctuations. I recommend having a plan to accumulate equity more quickly either from higher down payment, improvements/value-add, paying the loan down more aggressively, buying below market, or some combination. Another key lesson I learned is to screen tenants very carefully. I rented to a bad tenant who messed up the entire building.

@Mary Mitchell. Agree

@Jacob D. I have too many questions and comments to list in a message. I’m in Cincinnati. Would be glad to discuss. PM me if interested.

@Patrick Fraire This is not family. You’re loosely connected by two girlfriend or boyfriend relationships. If one goes back far enough I believe we’re all related. A lease between a landlord and tenant is a more binding commitment in the eyes of the law than a boyfriend/girlfriend relationship which can be broken quickly without strings attached. Your girlfriend would be much better off selling and just giving them $800/month. Not sure why she moved or where she lives now. Not sure what income the distant relation has. Not sure how the determination was made they can pay $1700. Damaged credit suggests not being able to determine affordability. It all sounds very convoluted. How about they move to Dayton, OH where they can get a nice 4 BR/2 BA in a good school district for less than $1700? Or somewhere similar? I’m all for charity. I aim to keep increasing my giving until my days on this earth are over. In fact I want to get to a place where I’m radically giving. However I’ve learned through acts of generosity that charity and business are separate things. If she rents the condo to these people she needs to understand it’s charity and it’s very likely to cost more than she realizes.

@Kevin Christensen. When I met my wife I owned 2 fourplexes. I made some bad decisions not screening tenants. A tenant torched one of the buildings. I mean poured gas on the bed, lit it, and left. This was 6 days before our wedding. My wife (fiancé at the time) and I were living in the building on the floor above the fire. There was extensive damage. We were homeless on wedding day. Got married, went on our honeymoon, came back, took the insurance money and sold it as is for a small loss. Obviously my wife wasn’t thrilled about real estate investing after this episode. We’re really not on the same page about money. When it comes to managing our finances, I earned her trust and she leaves it to me. We talk about it when needed. For real estate, after being out of it a few years I jumped back in. When she saw that it was working and it was good she warmed up to it. So my advice is make it work, don’t burden her with real estate problems, and win her over. Do both, make her happy, don’t detract from family stuff, and find a way to be successful.

@Michael Marchman. You don’t know enough to know. You need to do the inspection and do a financial analysis of repairs, improvements and carrying costs. As a newbie makr sure you build in plenty of contungency costs as you are sure to run over. Then you need a much better estimate of ARV than a range on which the high end is 50% higher than low end. I live out of state, don’t know the area, and I could spitball an estimate that accurate with 2 minutes of research online. Pay no attention to what the seller paid or what he wants to sell it for as you run your numbers. Something smells about the investor’s change of heart.

@Mary Mitchell what do you consider to be tiny cash flow margins?

@Kyle Schlosser You didn’t provide some key information. If you’re talking 4 unit or less properties you can get 30 year am. If you want to buy as an LLC as opposed to buy individually that could be the problem. I may have missed this, how many rental units do you own currently? If you own too many (more than 4 or more than 10 depending on lender and the programs offered) that could be the problem. It comes down to whether you can get conventional financing or not. If not you have to go commercial in which case 30 year is hard to find. If you want to message me personally I can refer you to lenders in Cincinnati who can probably work with Louisville properties. Sounds like the people you’ve talked to aren’t helpful.