All Forum Posts by: Jody Schnurrenberger

I don't do rehabs, so I know very little about this, but it SOUNDS great to me.  :-D  I also love what you did with the property.  Well done and good luck!

I'm just responding to keep your thread alive because I like it.  ;-)

Sorry.  I don't.  But that sounds really cool!  Have you tried just googling?  That sounds like a great idea.  I think I'd like to get into something like that.  Maybe I will google that for my area.  :-) 

Good luck!

I know I'm not your target audience, but you didn't have any other takers, so I thought I'd chime in and hopefully someone will see an active thread and start really helping answer your questions.  lol

I only invest in residential property.  I'm interested in commercial, but it all seems so big and scary, like jumping off a cruise ship into the ocean.  Okay, maybe not QUITE that terrifying, but still, really scary.  lol  1. I don't know what I'm doing.  2. I'm scared of losing on my investment because commercial is often a good bit more than residential and, well, I don't know what I'm doing.  3. The legal aspects of it seem more complicated than simply doing residentials.  

Good luck--I hope you get some more useful answers.  :-)

I don't have anything legitimate to add to this discussion, but I thought it was worth discussing, so I figured I'd post to keep it active and hopefully draw attention to it.  :-)

I use a property management company and have a good bit "in reserve" that I keep in the stock market.  Okay, really, it's just my investments, but when I need something done, that's where I get my money.  So, either I have hundreds of thousands of dollars in reserve or nothing, depending on how you look at it.  lol

If you're interested, I've had a SFH for about 15 years and 2 sets of duplexes for about 8. So far, so good. But I have had to dip into my investments before for things like a new a/c and will be doing it again for new carpet as tenants move out of the duplexes. In some ways, how I do it isn't ideal because I might have to sell some stocks before I'm ready because I need to suddenly buy a big ticket item (like a new a/c). Not to mention, there is the risk of the market tanking and me losing a bunch of money, but in that scenario, my rentals aren't my primary concern as they typically don't have a lot of issues anyway. On the other hand, in the market, I'm making a lot more than I would if I kept it in a bank account, so for me, it's worth it. Not to mention, I don't always have to sell as when I sell, the money goes into my money market account automatically. If I'm lucky, when I suddenly need money, there's some in there already.

So, that's what I do...nothing.  lol

OOOOooo...Interesting idea!  THANKS!  I can see how you could end up having to evict them, but it does seem worth the risk.  So, how do you structure your rent?  Obviously they couldn't afford their mortgage in the 1st place.  Are you just getting a better mortgage rate and borrowing a lower amount so your mortgage is lower and thus they can pay a lower rent?  Or are you just taking a small loss the 1st year in hopes of making it up in the future with the great deal you made?  

I love this idea!  Thanks for sharing!

I didn't see any other responses, so I'll give my best opinions.  Take them for what you paid for them.  lol

I checked the BBB and didn't see an exact match for Morris Invest.  Though The Morris Investment Company out of Cincinnati has a C, but I don't know if they are the same.  As for Brian Bagnall or HelpRetire.com, I didn't see anything.  However, I can tell you there are a couple of red flags to me.

First, I, personally, never get rentals in low-income areas, but that's me.  I prefer middle class.  I feel like it's sort of like playing penny stocks.  Sure, you can make a lot of money if all goes well, but more often than not, you lose.  But that being said, there are folks who do buy low-income rentals, so apparently it's okay if you know what you are doing.

Next, I don't buy in high crime areas.  I don't want a law suit.  I don't want to pay for property damage.  I don't want to deal with legal issues.  Now, all this is speculation.  You can own something in a high crime area and never have a problem, but for me, it's not worth the risk.  If I wouldn't live there, myself, I don't buy it.  Not to mention, I would guess it's harder to get tenants in a high crime area.

Also, I've been told not to buy the most expensive house on the street.  Otherwise, your neighbors are just bringing down your property value.  Plus, it's often harder to sell the most expensive house on the street...because many buyers know their neighbors will be bringing down their property values.  lol

To me, this all just seems like a bad idea, but like I said, if I wouldn't live there, I don't buy there, yet there are successful people who buy low-income properties, so it can happen.  Maybe you can find a low-income area in a less sketchy part of town?

Good luck!  

I don't know how to tell if someplace will rent a condo, townhome, or SFH the quickest, but the primary way I know someplace will rent is that I look mostly at rentals. That way I have a good idea of the rental history plus the rent I can get. I'm sure there are far more savvy investors with far better methods, but this has worked well for me. :-) Good luck!

I see no one else has answered you, so I will, but I can only tell you from my limited experience.  Mostly, I recommend you listen to the podcasts and watch the videos on here as well as read books.  They will be able to tell you far more than I can.  I have a financial planner who guides me through my decisions.

I strictly do buy and hold, so that's all I can recommend from experience.  I'm terrible at being the bad guy, so I use a property manager.  I know, I'm not able to give you info on the best way to do things.  lol  But for me, this is the best way because if I can't evict a tenant, then I'm in trouble.  Not to mention, I'm not even good about collecting rent on time.  Plus, I'm pretty disorganized.  I learned from experience and hired an expert.  lol 

So, all that being said, I tend to lean towards property that is already being used as rentals as that way I can find out their rental history and have a good idea if they will be rentable and for how much.  I have 2 duplexes I bought and they had a great rental history.  I got them about 8 years ago and they never spend more than a week or so vacant, if that.  They've been great!

I have what was my primary residence as well.  One thing I can tell you is not to buy a "down house" (a house where the property slants towards the house).  My mom told me not to as our home was also a down house and my parents were always fighting foundation problems (due to water).  I bought a down house and have spent the whole time fighting water.  DON'T DO IT!

Be sure to check out the area before even looking at the property to save yourself time and to protect from falling in love with something you shouldn't.  I refuse to buy in high crime areas, so I check Trulia, though I hear there are better ways.  lol  I've also asked the police department what their opinion was when I was looking at an area I wasn't familiar with.  I've done the same with the Chamber of Commerce.  But if you already know the area, that's probably not necessary.

There are some worksheets on here to help you decide if something will be cash flow positive, and if so, how much.  But if you're just a free member, you can only use them 5 times.  Though I'm sure there are other sites around the internet that do the same thing.  

This is obvious, but be sure to get a home inspection so you know what you are getting into and can hopefully get the sellers to pay for some of the issues.

If you decide to use property managers, research first.  I got mine on the recommendation of a family friend.  While they are the cheapest in town and they haven't done me wrong, they certainly aren't the best.  I need to stay on them to ensure things like repairs are done.  It took me asking 4 times over 5 years to get a simple mailbox replaced.  Also, whether you live in the area or not, I suggest checking on the properties, inside and out, at least once a year.  This is how I found out one of the mail boxes was rusting out and the door was off it.  The tenant apparently hadn't complained and the property managers hadn't noticed (or cared).  (Why do I keep them?  Like I said, I'm terrible at being the bad guy!  Not to mention, the mom of one of my high school friends is my manager.  Doh!)

If you have a tendency to make rash decisions, bring someone who is level headed with you.  I also have a time-line, myself.  I see the property several times and take 2 weeks to make a decision.  That way I know for sure it's what I want.  But I know in some areas, this isn't possible.  Also, if it's a real steal, that wouldn't work, either.  I've only lost one property this way (and I do regret it), but for me, it's worth the chance of losing it.  In the time I thought or re-looked at places, I decided against them, so it's saved me, personally.  But you know yourself and know what's best for you.

I also recommend starting out just looking to get a feel for what's out there.  Don't buy the 1st house you see or buy in the 1st week.  Chances are, you aren't going to find a real winner right off the bat.  And even if you miss out, there are others out there.  Use this time to practice on your worksheets and get an idea for what's a really good deal and what's just a deal.

I think this is all the wisdom I have.  GOOD LUCK!

I see no one else has replied to you, so I will.  I don't know much about things other than straight buy and hold.  But if you are worried about the time involved in being a landlord, I'd suggest you look into using a property management company.  That's what I do.  It started out because I'm terrible at being the bad guy and probably would never evict someone.  But now that I'm out of college and have moved, it's perfect because there was no hiccups since I wasn't very hands on in the first place.  It's not the cheapest way to rent out property, but I've found it to be effective for me. 

Another option is house hacking.  If you buy a duplex and rent out the other side, it may be easier for you.  And, of course, there is obviously the plan of simply buying a home and getting roommates since you are in college.  Get a 3 bedroom and rent out 2 of them.  It's a great way to get started, then if you decide to keep your place, you can get a property manager when you graduate and move on.  

I see no one has replied to your post, so I'll throw in my useless 2 cents.  I haven't encountered this situation, but what you are proposing makes sense.  Though it really sucks to have to destroy perfectly good steps, plus spend the money to build more.  Good luck with whatever you decide, but I think you are on the right track.