All Forum Posts by: Joe P.

Full disclosure -- I knew things were probably coming to this. I've had to send overdue notices several times this year, and a notice to quit twice (this is the third). I tried to work with my tenant but they simply do not respond...

...and now I am here. They are 8 days overdue on rent, and I sent a notice to pay/quit yesterday. I've e-mailed both co-tenants with no response. I tried calling their cell phone and it has been disconnected. I stopped by the property a few days ago -- windows were open -- knocked on the door twice, no response.

I know they don't have the money to pay. I am ready to just follow a cash for keys method, but I can't establish communication!

I want to stop by the property during the day and thinking of giving 24 hour notice, just because. I think I'm allowed to do this with the proper notice.

Any thoughts/guidance?

@Crystal Smith I respectfully agree up to about 99% with your thinking. The 1% creeps in when you consider that people sell homes and people buy homes -- the situations in which a property makes it onto a market will vary by house-to-house. Some people absolutely need to sell their home, while some can take their time.

Usually the price will dictate the immediate sales goal, in my inexperienced opinion, but you never know -- the sale price is a lot like Poker. The cards might be good or they might not be; you need to play the player as much as you play the cards.

@Chad M., I'm not so sure I want to enter the market with the strategy unless homes are simply overpriced? I wonder if your agent (and seller agents) and who they represent may get tired or "numb" to your strategy?

I am sure you know this, but the rents would likely increase steadily over time -- if its a profitable property, in a decent neighborhood, and in good condition, what do your projected rents/net profit look like over time? To me you have others paying down the equity and $300 per month in cash flow. Maybe that increases by only $100 per year ($25 per unit), but after 5 years your cash flow is now $800 per month.

I haven't dug into your numbers so I couldn't and wouldn't definitively say to go for it, but if your numbers are conservative to start with and you anticipate even modest growth in neighborhood and rents, it seems like a good investment property.

Hi @Dan Schwartz - what constitutes a move out? Or rather, how does the federal government evaluate a move out? :)

Hi @Chris K., I purchased the property in 2010 with no intentions of this real estate plan or any intentions at all -- I was 22, ready to buy my first property, and found the sexiest car in the lot. It truly was sexy on the outside -- all brick, loft/open style, a total bachelor pad. :)

I then got married in 2014 and the house...didn't suit the missus needs. This is when my ideas for real estate started to come through, and I decided to rent that house (while purchasing our current SFH, which we had the capital and ability to pay for monthly regardless of any decision made on the existing SFH.

I've been renting that home for ~3 years now and wanted to expand, build a true plan, and get moving towards more cash flow, but even more importantly, using cash flow to start building a true business/portfolio. The only way I can see doing so to get the down payment funds needed to start this, is selling the existing SFH.

My goal is not necessarily immediate appreciation -- I think there is tremendous value in Buy and Hold properties to gain cash flow, and use to fund future real estate ventures that are of (hopeful) profitability...rinse and repeat.

Hey all, thanks for the quick turnaround on responses and your thoughts! 

@Brendan Markle I appreciate your thoughts. I think in order to move the plan forward (versus its stalled state because I have no cash flow) is  the reason I want to sell. As long as I can get enough capital to move forward, that's the key. The risk is, of course, seeing a huge increase in the neighborhood over the next few years where I could even double or triple the return I am seeing now. But can I wait 7 years more, for example, to see if that comes to fruition, when the house technically provides no cash flow and could COST me money if something goes wrong? I think that answer is NO. I am meeting with an agent friend today actually, to discuss my plan. If I need anything I will be sure to contact you! Thank you also for your recommendation on neighborhoods.

@Richard Jahnle I appreciate you responding and helping to engage on this. Hopefully the appreciation is sound -- I think based on the cool design of the place and a 15k improvement I made to the front facade (added some Sq footage and usability) I don't think the appreciation is out of whack. Maybe a little high, but not out of the realm of possibility. :)

@Ron Flatt thanks for responding, can you help me to understand what "B" and "C" properties are? I assume you mean to classify by tenant type, rent, condition, etc.? I certainly hope to be a success story soon myself. As I get deeper into my career I keep asking myself what I would want to do if I didn't have my job, or to advance my career. Every option I come by doesn't interest me other than volunteering my team to help others, and starting a true real estate career with a buy/hold mentality. I think I can handle it, have it supplement my retirement, and keep building a portfolio in a controlled/steady manner to reduce risk and perhaps have enough holdings to switch careers for good! I screen tenants today using TransUnion SmartMove which has been very helpful, but doesn't give much insight into the personality of tenants; that's something I still struggle with and has ultimately been the problems that arise.

Hi all,

Thanks to BP I'm just about finished with my business plan to get serious about investing in real estate. My current holdings:

SFH - Primary Residence: 85% LTV (10% conventional)

SFH - Rental property: 84% LTV (FHA loan since 2010)

I'm ready to start investing and seeking good buy and hold properties. My cash is somewhat limited so I am considering selling my rental property, which does not turn a profit (only benefits -- good ones -- have been paying down the mortgage, no major issues, and tax benefits). I purchased the rental in 2010 for 190,000 and I think I can get ~250,000 for it now based on home improvements and neighborhood improvement.

The idea is to use the proceeds from that sale to purchase one or two properties, preferably multi-family, in the Philadelphia area. I don't think private money is an option, and I don't think any bank would fund the down payment needs. I don't see any other option to raising that sort of capital (40,000 to 60,000) in such a short amount of time.

I like the rental property but it will likely never turn a profit. It is a 1 bedroom "loft" style townhome with a lot of cool features, but the reality is unless I undertake a major renovation, it will always be a 1 BR and I think its value is limited from a rental and sale perspective.

Any thoughts? I've thought about refinaning my rental property from FHA to conventional (which might save about $120 a month in MIP) but the fact is it doesn't increase my cash flow beyond the MIP savings. And again, because its a 1 BR and the rent is already at the high-end of the neighborhood, the mortgage/taxes/insurance/maintenance costs won't allow me to turn a profit any time soon.

@Kory Denny what were you thinking of doing? I just realized you asked for a series of investments which would generate the best return with average market risk; are you seeking long term or short term gains? Perhaps 100k in the stock market might be more high-risk/high-reward in the short term?

I agree with Justin -- money should be able to be made wherever you are. Therefore I would live where you want to live, and do your best to make it work. I don't think I'll be leaving Philadelphia any time soon, so I would look to house hack in Philadelphia. If you love Clearwater (and gosh, a place near the beach sounds amazing, at least to me...) then stay there and house hack in Clearwater.

I don't know what you do for a living but there are ton of expenses and headaches with moving, in my opinion -- a cross country move, new job, etc., sounds like it would be difficult than maybe renting out an available room where you are right now?

And other question -- have you house hacked before? If not, are you willing to move many miles away and try to settle, and then come to find out you might not be able to/not enjoy house hacking? I would start small with where I was and then decide if it was for me...

100k cash? Mattress, of course. :)

I'm curious to see how people might answer this myself, but I'd try to find two multi-unit properties in a decent area and use the 100k as down payments. Any leftover money could go to repairs and I'd look to get the passive income rolling. I guess if you had ANY money still left over, I'd keep it "in the business" but look for some REITs to invest in as future capital if needed.