All Forum Posts by: John Kesner

Jay Hinrichs What is a good way to do the due diligence on a lender? I have some people at my local REIA that say they are hard money lenders, they are just a person that is REI savvy with cash to lend. Is there an easy way to find out if they are real?? References are easy to fake.

Chris T. How do wire transfer scams work?

Lets hear about how scammers are working the real estate game these days. Please share if you know of a way people have been scammed recently. It would be beneficial to me to know what to watch out for. I don't have a scammer mindset so it's hard for me to anticipate where a scammer might be lurking in REI. Thanks!!

Carlos Alger Everything is regional, even down to the neighborhood. Rougher, low income areas usually have higher cashflow. Neighborhoods with higher appreciation will have lower cashflow/COC. That said I aspire for 10%, and thats a lofty goal in my area (staying out of the roughest areas). I am in a high appreciation market so cashflow is pretty tough to come by. Get to know your market and you will pretty quickly figure out what you can reasonably expect.

@Jeff B.

I have heard many stories of people try to extort others in a 1031 situation. I don't think its all that uncommon. Unscrupulous sellers that are savvy to the 1031 process think they can drag out the timeline then extort you, knowing you will have a huge tax bill if you don't close. 

Nice job handling the scammers!!!

@Alexander Alguire

The biggest take away was that closing a deal can be very frustrating if you don't have the right mindset. Nowadays I go into it assuming nothing will go as planned. That way I'm ready for anything that pops up, and if things do go well its a bonus. 

The area is beginning to boom, I think we can all agree about that. The hard part is finding investments that make good sense. Between the silly cash money buying anything in sight and sellers with their heads in the clouds, it makes it a very challenging market full of speculators. When articles about Reno's housing crisis appear in the Wall St Journal, you know the secret is out. 

Alexander Alguire I bought my first deal in 2010 when lending was very tough. I had a partner and both of us had $50k/yr+ jobs and a 20% downpayment (total between the two of us) so we figured getting a $99k house would be easy. Wrong!! We ended up having to add both of our wives who also had $50k/yr+ jobs to the loan to make it happen! It all came together in the end after a few extensions to the close. I didn't realize how tight they were going to be so it was very frustrating. Now I wish I could go back in time and buy 10 of those houses, it was by far the best investment I have ever made.

Gina Baker I charge an additional deposit of $250/pet and $25/month/pet rent. Most people love their pets enough that they have no issues paying it.

@Rodney Saucier

There are a couple downsides that I don't hear mentioned much. Be sure to use a title company when transferring a property into or out of your LLC to ensure "chain of title" insurance, or you could have a nasty surprise when you go to sell. This will likely have fees attached. Also, if you ever go to refi a property, you will need to transfer the property back into your personal name (as the loan was originally issued to). There may be a waiting time before the bank will do a refi after the transfer. I have talked to banks that have as much as a 6 month waiting period. Then there is the transfer tax, Pay it going into your LLC, again when coming out to refi, again when going back in after refi, etc... it can get very expensive.