All Forum Posts by: Jon Reed

@Joseph Greene 

It is crazy how many people walk into self managing their properties and don't really know the basics :P 

Property managing does have it's down times where you wish you could just fall off the grid, but 95% of the time it is great. I personally got into property management to just learn. I worked for a big management company who had apartments across four states for about 3 years before going off on my own and managing properties independently (and picked up a traditional 8-5 job). This past year and a half is when I start buying real estate and managing my own properties. So far I enjoy the investing and managing about the same. Making money is great but also seeing people get excited when they are able to move into a freshly renovated home is equally fun.

You can hop on google and just search "Lease Agreements" and get thousands to pick from. I would suggest printing off a few of the free ones and just reading through them and taking notes on them of things you like, don't like, or just don't understand. Then when you meet with your attorney you have some things to go over and can help guide him to what style of lease you would like.

**style of lease... that may not make sense. By that I mean some people want to their lease to be as short as possible, other want it to be 100% encompassing which makes them 10+ pages long. Other people will have a short lease and then a ton of addendums attached for pets, no smoking, late payment penalties, 3 strike policy, parking policy, and so on. Some like to use the addendum method because you can update just your 'pets' addendum and have it resigned by the tenants without having to update your entire lease and go over the entire lease again and promise them that you only changed the pet section.

I would install a nice quality plastic one. If you go for a cheap plastic check valve then it may get brittle and crack. 

I purchase all my cabinets off the shelf at Lowe's for our renovations. 

Don't leave them just primed. Almost every single buyer will walk in and see an 'unfinished' home instead of a blank canvas. 

A long lasting water leak will ruin ANY floor no matter the floor covering. You will just be fooling yourself if you think sheet vinyl has to be used in order to protect the floor from that dreaded kitchen sink/bathroom sink leak that goes on for months. I have had to re-subfloor rotten ares that had tile, vinyl sheets, stick down tiles, or floating floors originally... none of it makes a difference.

Water will ruin anything given enough time.

So... With all that in mind.

• Make a decision on flooring that looks good and is economical for the home.
• If you do use vinyl blanks in wet areas splurge for the 'water proof' kinds. Not to protect from the scary secret water leak but to allow your tenants the option to wet mop their floors if they want.

@Benjamin Behlmann Would you be able to find a different part time job that pays better and is flexible? I would find a year round part time job and then look into using the VA loan to buy a cheap SFH that is a 2/1 (my first investment property was $30K). Then rent out the spare room which will cover your mortgage so you can keep on track with your stated savings plan. Then in 3 years you will still have equity in that home to 1031 exchange into your multifamily unit.

You may also be able to find a family member to co-sign on to the loan. Especially if you show them your 5 year plan and how you are going to house hack to cover the mortgage. 

Ohh tail end thought... Many of my friends who run real estate teams hire on part time people to do cold calls and follow up on leads. One of them even pays the cold caller a % of the properties sell value if their cold call leads to a closed deal. That may be something to look into because most of them are looking for people to cold call after 5PM or from noon to 1 (the times most people are off work). Those kinds of jobs with real estate teams also are really flexible (most of the time).

@Account Closed, I am only 1.5 years into it and have 3 properties so far. I would recommend RE to anyone who wants a way out of the 'traditional' working life. My wife and I have a goal of 20 homes in total and have them all paid off in the next 8 years.

I have never dealt with a hard money lending company. All of my HML has been through individuals who have extra cash to invest.

I would say check out the details and read aaaaallllll the fine print. LendingOne advertises "rates as low as 7.49%" but their lending rate is 75K-4mil so I bet that 7.49% is if you want to borrow 4mil and if you want the 75k it will be something like 27%.

Also, in your example you are showing that you are doing 15% down ($8,700 down). So... do you only have 15% down or have nothing down? 

@Benjamin Behlmann, I did read your plan. Reason being, you spent time writing it and thinking it out. 

Based on Year 4 and 5 you are wanting RE to be a side-hustle... maybe it grows into a full time gig but that isn't your goal right out of college. 

My concern is you wait until Year 5 to educate yourself about how to know if a property is good and also to start networking. Start all of that in Year 1. Also, with the VA loan why would you not buy a SFH or duplex in Year 1 and house hack it over the next 3 years? Then when you graduate you can sell it, take the equity and 1031 exchange it into the 4 plex you are wanting to buy in year 5.

Overall, if you don't plan on taking any actions for the next 4 years it is very likely that you will keep kicking the can down the road until 10-15 years have passed without taking the leap into your first property.

Keep it up! Brainstorm and get creative.. also be ready for your business plan to change after the first 6 months but always keep an eye on your goal and make sure you are moving towards it.

My current commercial loans have a rate around 5.5% and they each have a original principal of less than $100k. Commercial loans just have a higher interest rate most of the time because they are riskier for banks compared to traditional mortgages. 

I personally wouldn't add another 5% down to save 0.12% interest. Most investment properties will be refinance and bundled a few times throughout their life (if you are a buy and hold investor). 

Ohh and our credit score was 800+.