All Forum Posts by: Joe P.

As a human being, I would caution you on making a deal like that. I don't care how much money you make, have inherited, own in investments...you don't become wealthy by losing money on a deal. Simple as that.

As an investor, man, I love you. You're going to get shellacked by this property and be forced to sell for pennies on the dollar to get out of it, or worse, end up in foreclosure! A shrewd investor will see a property that they can make money on (thanks to the purchase price being so low -- you make money when you buy in this business).

So decide if you want to make an awesome deal for someone else a few years down the line, especially if there is any "market correction" coming. We'll feel bad for you, but feeling bad won't pay your bills.

Hi Jennifer, happy new year. Now that I'm done with the pleasantries...You're going to get hosed on a deal like that.

Assuming FHA loan, your payment on ~800k loan will be almost $4,000 a month. So what's the draw? What kind of background do you have to be able to afford 4k+ on mortgage alone (not even factoring in taxes!) because any vacancy means you'll be paying that.

Spending big money like that for 2k rent isn't an investment. If you said you wanted to pick up a duplex for 200k with 25% down, and be able to rent a unit for 1k (very doable) then it would make a ton more sense. You're now covering (hopefully) every dollar in PITI and hopefully some reserves, meaning you live as close to "rent-free" as possible and saving a ton of money for the next investment.

What you've described is buying a super expensive mansion-multi where someone covers a small fraction of your very high costs of living. At that point you're not an investor, just someone probably dealing with a high-maintenance tenant on a very expensive house.

Lets assume your minimums hedge to the middle of the curve...call it a conventional loan on 25% down of a 700k duplex, renting out at 3k a month. It becomes a little more palatable with your monthly payment around 2300 a month before factoring anything else, but still not cash flowing to get you ahead.

I know you wanted "best towns" advice and frankly, if those are your numbers, it simply doesn't matter. You can live almost anywhere you want.

I think the concept of an application fee is outdated. I've heard many folks talk about charging the application fee to weed out the "tire-kickers". Here's what I'd say -- set the bar high from the get-go. If you have a nice property that is well-priced for the market, let people know what your requirements are, e.g. 620 credit, 1.5x rent due upon lease sign as deposit, no criminal history, etc. If you let it be known early on, that will weed out quite a bit at that time.

Now, some people don't pay attention and forge ahead accordingly. Not much you can do there. I started using Zillow's background screen service to keep myself out of the "background-screen-and-charge-people" business. Zillow does it and charges them directly, and then I may ask additional questions about their application as needed.

I put more stock in the gut feel I have in meeting folks during my open houses (always schedule people for a 1 to 2 hour time frame) and seeing their interest level, how they interact with me, etc.

Don't take it personally. Even my wife says I'm way too cautious, especially on matters of money :)

I'm establishing myself more as an investor at this point (finishing up a BRRRR) but I could see syndication being an important part of the portfolio, hopefully in the near future. I'm sure we'll be in contact.

The deal looks fine, assuming no major red flags...but a few thoughts:

You have $8,000 cash plus a grant you think you can get, and maybe qualify for a USDA loan. And then its 23k for materials...and how do you plan on purchasing those? How do you plan on covering closing costs?

These projects have a way of sounding fantastic as you talk about them, but then rubber hits the road. Every project takes time, money, and resources. If you have limited funds now and need the funds to obtain the resources (or even subs) necessary to execute this project...you can't be waiting for grants or sellers assist or pay day. You NEED the funds ready to go and from a financial position of growth/investment instead of pooling from your day-to-day life funds. Are you prepped for that?

Great idea! Thanks for that I will start to do it. One thing I should note is I didn't post on CL, only on Zillow/FB...and someone took the pictures and description and created a fake CL post.

Hi all -- I recently rented a property I own, and a tenant I denied (including denial letter) asked me if they could still see the property. I was a bit puzzled, and it turns out that someone took my post and re-posted (at a cheaper rate) on Craigslist. They have my property address listed, took every picture and description I had up, and created their own post.

My guess is they're trying to scam people by having them provide a "hold" for the property without seeing it, but I'm honestly not sure. I tried flagging on Craigslist but that didn't do anything. What I'm worried about is two-fold -- someone coming after me for a scam they're running using my property address (likely), or physically going to my property that is tenant occupied (perhaps less likely).

Part of me wants to take it to the police, but I don't think much can happen with them. Any ideas?

First property, @Jake Drappi? Run. Unless you've dealt with a squatter before, there's no reason to add this type of stress to your life. Covid isn't going anywhere, you'll buy this property and sit on it while someone doesn't pay you rent, won't accept cash for keys, will continue to destroy whatever is left of the property, etc. It'll break you from wanting to invest.

Nothing on the traditional path. If you want the federal government to back your loans (e.g. a traditional mortgage) you will need 25% down for a multi-family.

Doesn't mean you can't work out a deal for seller financing or work with hard money lenders, of course.

I could see where the commercial side of things might not be as robust. So I would supplant that work with entering the residential business if you're able to pivot. Every contractor I know -- approximately 10 of them -- have all told me they are NUTS right now and have been for months. They're turning down work. I'm lucky to have one of them come and do a personal project at my home next week.