All Forum Posts by: Joe Cassandra

I mean, this is essentially a "delayed" down payment on a house. 

As others mentioned, it depends on your goal. 

#1. Security

or 

#2. More aggressive wealth-building

I wouldn't discourage anyone either way. 

Me, personally, my goal is to have $0 invested in each house. A "free" house essentially after refinancing. Then putting any lingering proceeds into other higher interest bearing investments rather than trying to save 3% on mortgage interest. (not to mention, you lose the interest deduction on taxes paying off houses)

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For me, I've "dreamed" about having all my properties paid off. 

I've found it's really a mindset thing. 

I'm scared one day I'll get hit by a car, can't work again, and my income goes to $0. 

Possibility? Sure. 

Likely? Probably not. 

Trying to pay off rental properties early is a scarcity mindset that you'll run out of money in the future and will be foreclosed on. 

Chances are pretty slim. 

So keep your $5k, pay the higher mortgage payment, and ditch the fear :)

(said as a 32 year old, with a wife and 3 kids. People near retirement may feel much differently. Or, in an industry they were laid off from)

You can try. 

The sweet spot in Cartersville is $800-1500. That's where you'll get enough volume to find a good tenant. 

And that's with 2/1 or 3/2. 

You can try it. 

If you don't get at least 10 inquiries in first 2-3 days...it's likely overpriced. Obviously, if you can sit for the right person at 1800, do that. If speed is the thing, it may be tricky. 

Of course, you never know.

I have a couple rentals in Cartersville. Great rental demand. 

Not sure at that price point though. 

Which area is it in?

 - "Oh, this bathroom needs a full gut. The shower isn't HGTV worthy..." 

- "Oh, this roof is 10 years old, no buyer will want this, we need to replace it..." 

- "I don't like these cabinet fronts, I could paint them for $500...naw, let's replace the fronts so they look better for $2,800." 

Overrehabbing you're doing more than you need to...usually for vain reasons and not smart business reasons. 

Now, what we do: 

1) Look at comps and ONLY get to their level. If their master baths are inserts...leave them as inserts. Don't gut and re-tile and spend thousands. 

2) If a roof or hvac is not at useful life (even 13 years old like our last house). DO NOT replace. Use as negotiating piece during DD. Replacing it will not get you more money. The buyer will just find something else for $5,000 to complain about for you to fix. 

3) Don't buy expensive stuff. One of our first flips, we got one of those fancy standalone tubs because we thought it would boost ARV. Cost $2,500 for everything for it, did not get that money back.

4) Bank on STAGING to make house sell, and not expensive stuff. Don't add can lights for 'effect.' Don't add a sliding backdoor to 'let more light in.' (big mistake). Bring in $10 lamps to add light. Change the light bulbs to brighter ones to let more light in for $20.

It doesn't mean 'cut corners' and 'hide things.' 

It means stop trying to make a house to impress people. You're in flipping to make money. 

The more things you start in house, the more problems you'll find and have to fix.

@Bill Hampton is the best bet for sure. Takes his time to talk to you, good prices, and knowledgable all around. 

Wish I took seriously the advice to never stretch numbers...

And to NEVER over-rehab...

You'll lose a ton of money that way (ask me how)

If your goal is to be a handyman,  then do it. 

if you're trying to build a business, driving 30 min to your rental to fix a leaky toilet is a freaking waste of your time. 

Buy houses that are good deals to avoid being a contractor.

A house in Woodstock, GA we bought had some water seeping in and the foundation starting to slightly bow. 

We installed an interior drain system for a few thousand bucks and will monitor as time goes on. 

Spending 20k+ on waterproofing a basement is a ripoff. 

Don't be stressed. There are a lot of scammers in the waterproof/foundation space. 

Start with one solution...see if it works. Then work up from there. Going crazy and doing major repairs all at once isn't the best plan when it could be a 1k fix. 

If tenant doesn't alert me of a problem...then it's on them. 

I'm very upfront and quick to repair items...

In return, I tell them.

1) I expect you to be able to take care of little things like clogged toilets...and don't call me if you see an ant. In return, I promise to answer bigger problems within 24 hours

2) I order them to tell me of any problems. Leaks etc. right away. 

In this case, if they didn't tell you about the busted appliances and instead went to purchase it themselves...

Which is weird...

I'm guessing they broke it. :)

Why would they not tell LL and go through headaches of not cooking food and buying appliances themselves. 

It's on them. 

You owe them a fast replacmeent, but no food compensation.

Where I am (in North Atlanta), they've built a couple "MEGA" senior living places. 

Not nursing homes/hospices. 

Like hip senior living 'condos'. One lady I talked to who i sent a letter to said she and her husband are liquidating their SFH to invest in their new business (that's thriving)...it's a mountain community only for 50+. Each house is a $1M, near waterfalls...a true getaway-and-stay.

Doubt those alone will put a dent in supply...

But just an observation here. 

Will really come down to "how do boomers want to retire?" 

If they're too broke to retire...they'll eventually go bankrupt likely as they can't keep up the house, and then have to sell to an investor. 

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***Making wild speculation for conversation sake