All Forum Posts by: John Myers

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $192,000
Cash invested: $192,000

This home was purchased with a self directed IRA owned by a LLC. This home was brand new when I purchased it. I bought it for $38,000 below their advertised price. The builder only had 3 homes in this subdivision left and was will to sell at cost. The self directed IRA paid cash and closed in a week to meet the builders goal.

What made you interested in investing in this type of deal?

The builder was desperate to get rid of the house and I purhased the home for $38,000 less than advertised price.

How did you find this deal and how did you negotiate it?

One of the builders sales reps called me and asked me to make an offer on the house. I made a low ball offer and they accepted it.

How did you finance this deal?

Cash

How did you add value to the deal?

The home was brand new, we landscaped the back yard.

What was the outcome?

Still own the house and it is a great investment.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $169,000
Cash invested: $169,000

This home was an REO purchased at a live auction. This house has been a great rental ever since we purchased the house. I was working in Florida and my wife went to the auction with another investor. She made the winning bid and did not know she had the winning bid. She called me to let me know that she did not get the house. She called back about 10 minutes later and said we got the house. We laughed and have joked about it ever since.

What made you interested in investing in this type of deal?

We were purchasing rental properties and my wife went to the live auction to buy another rental. We bought it at a great price.

How did you find this deal and how did you negotiate it?

It was a REO live auction on this and many other houses

How did you finance this deal?

Paid cash for this rental

How did you add value to the deal?

It was a REO home and we had to paint, carpet, and new appliances.

What was the outcome?

It has been a great rental. Current tenants have been there for 7 years.

Congrats on the deal. HUD does have a formula they use to determine the price they will accept. You got good advice about the price!!

They probably need an attorney.  In New Mexico the state law states the tenant can be given notice to vacate based on the rental payments.  So, if they were paying monthly, the landlord needs to give them 30 days notice from the date the rent is due.  Each state is different but an attorney is their best bet.

The landlord may think they can't afford an attorney, I think they have already paid attorney's fees with lost rent.

Congratulations from a New Mexico Investor.

Congratulations, sounds like a decent deal. Long distance property management is tough. Here are some words of wisdom. Good tenants = Good Life. Bad tenants = Life sucks. Find a property manager that you can trust (if that is possible), make sure you review the applicants.

As a real estate agent and investor, I am not a fan of investing in land. Land is very hard to sell. I would recommend selling both pieces of land.

In my opinion, Rents are going to keep on increasing even if we go into a recession. I first started buying rental homes in 2010, in the middle of one of the worst recessions recently. Rents have gone up every year since I purchased my rentals. Just remember, people need a place to live. The only risk with rental properties is if the government gets involved and starts controlling rents. This is highly likely in Oregon and not too likely in Nebraska. Don't worry, things will be fine. Sell the land and be ready to purchase more rental properties if prices go down!!

My friends thought I was crazy when I started buying rental properties. Rental properties have increased my net worth dramatically. Real estate is one way for ordinary people to dramatically increase their net worth. Just remember, real estate is not a get rich quick scheme. It takes time and it is a slow process, but it works!!

 I had this same converstation with my wife.  After talking about it, she was sort of convinced to raise the rent.  I was all in for raising the rent on all of our houses.  I raised the rent on every home I own, some homes we raised the rent by $400 per month.  I did this in June of this year and not one tenant moved out.  In fact three out of 9 of the tenants thanked me for not kicking them out.  Here it is 4 months later and no one has moved out.  Trust me when I say that renters are very knowledgable about the current rental market.  They know if they are getting a good deal as they are always looking at what is available.  I did provide 60 days notice of the rent increases in order to give them plenty of time to find new place.  With all the rent increases, we are still about $200 under market on most homes.  My tenants know they have a good deal.  The rents range from $1600 to $2000 per month.

It is important to keep in mind that you are running a business.  You need to constantly be looking at your top line revenue and all of your expenses.  

I hope this helps and I recomment raising the rents to something just below market rents.

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $100,000
Cash invested: $75,000
Sale price: $265,000

This home was built in the 1930s and it needed a ton of work. This was by far my most extensive remodel. I have to replace all of the electical in the house as it was knob and tube. Every piece of plumbing was replaces, the home has cast iron and galvanized pipe. The home had no heating and cooling. So, we added central forced air conditioning and heating. None of the windows opened as they had been painted so many times that they had been painted closed. After all that, made it pretty.

What made you interested in investing in this type of deal?

I have done several fix and flips.

How did you find this deal and how did you negotiate it?

The owners called me because of one of the pages on my website. They originally wanted to rehab the home and sell it. Then they realized how much work and money it was going to cost. They decided to sell it to an investor and that happened to be me.

First thing you need is to figure out where you are going to get the money to invest.  Start now to understand where the money is coming from.  If you are borrowing from a bank, you will need good credit and money for down payment and closing costs.

A great way to get started is too buy an apartment with 4 or less units. If you live in one of the units, you can purchase the units with an FHA 3.5% down payment plus closing costs. This is one of the best ways I know of to start off. You can only have one FHA loan, so this needs to be your first acquisition with an FHA loan.

Average price is up 8.2%, median price is up 9%.  These are year to date 2019 over 2018 pricing.  

Evertyhing said in the responses and Sandia Labs is hiring about 2,000 people.  New positions and replacing retiring employees.  They are hiring a lot of engineers from out of state.  I have helped a lot of them buy homes.  They get paid great and buy nice homes