All Forum Posts by: Joel Harris

Daniel, thanks for the comments. I have only spoken to my Agent, I haven't talked to the title company, I'll give them a call in the morning. 

Thanks! Okay, so, @Percy N., if you were me, you would not have signed until you had the checks in hand?

I recently purchased a cashflowing 4 plex. Since I am using my VA loan, and since the seller is covering closing costs, as is common in the area, I end up without any cash out of pocket, and also receiving deposits and prepaid rents from the seller (since the seller self-managed and did not use a property manager.)

However, when I arrived at the closing it was just me, my realtor, and the title agent. My realtor told me this was common, and what would happen is a notary would have the seller sign the paperwork remotely, and collect the checks for prepaid rents and deposits. He even went out of his way to include language in the paperwork stated explicitly that the seller was to provide prorated rents and deposits at closing.

A week later I received an amount from the agent for the closing. Enclosed were two personal checks, one with "deposits" in the memo, for an amount roughly half of the contractual deposits, and another with no memo, for $100. 

Since closing was on the 9th, deposits were $400 per unit, total rents for the month were $2200, I should have received $1600 in deposits, and $1561.29 in prorated rents. 

What are my moves? I have an address for the seller, however it is out of state. I have followed up with the selling realtor three times, and plan to file in court, however I'm not sure if I should file at the location of the property or the location of the address on the seller's personal checks. So far I am out $2300 more or less and I'm not sure of the right moves.  

@Jeff B., Thanks for your experience and advice. I'll probably do something along those lines. 

I will follow up when I see the leases. Is it typical to see the lease agreements before putting in a bid?

I am purchasing a 4 plex with one of the tenants receiving a $200 discount on monthly rent in order to be a resident manager. I'm not sure what this includes, but I would be much more comfortable with a professional management company handling issues. 

Does anyone have experience divesting a tenant of "manager" powers? Are there any safe ways to go about it? Should I just be forthright and tell the renter that I will have a management company take care of the situation, and let him know to expect his next contract to be $200 higher?

Thanks!

I am considering purchasing a 4 plex for $199k. The property cashflows $375 monthly, if it is fully rented out, and rents are slightly below market. 

I can get this property with almost no money down because I have a VA loan, and I plan to live in one of the units.

After examining the investment, the numbers look good regarding cash on cash return, but once I build equity in the property I'm not sure when to pull out cash. 

If I were to pay cash for the property, it would cashflow around 1% of the value of the property, despite the fact that the cash on cash returns are acceptable. 

If you were me, when does it make sense to refinance, or sell and use the capital to purchase a property with stronger cashflow? Alternatively, would you continue to hold, and eventually take out a HELOC as a downpayment for another property, essentially gaining two cashflowing properties for an initial investment of only a few thousand dollars?

Thank you for opinions, advice, and other comments. 

Joel

@Nick Rinnert, is this still on the market?

Peggy, 

I am a new investor, currently buying my first 4 plex in Texas, however I would love to be in the Cincinnati market. Aside from setting aside cash for the rehab and a downpayment for the mortgage, how should I financially prepare for purchasing a property like this one?

Thanks,

Joel

Thanks, @Dave Visaya! I hope all is well in Cebu!

Hi, BP, I hope you are all doing wonderfully today!

I love what I've learned listening to the BP podcasts, and I am eager to put my knowledge and drive into action. My two favorite interviews have been Episode 52 with Ken McElroy, and episode 172 with Jonathan Twombly.

Quick question, if you were from a declining market, had no attachments and wanted to move to a city, state, or region to launch a real-estate investment career, list your top three choices and defend them.