All Forum Posts by: Joseph R. Smith

Just another opinion. There is too much out there about being debt free. Too many people dont understand that there is destructive debt-debt on assets that depreciate in value such as car payments and typical overspending of plastic; And constructive debt-debt which enables one to borrow at one rate and use those funds to acquire assets that appreciate in value and return a much higher rate-such as real estate. One beauty of real estate is the leverage of debt. As for student loans-they are at such a low interest rate of what-6% or so. So I consider going into debt for math or science based degrees also a wise investment. (Per se, 12 years after graduation now, I still have not paid of my over $100,000 in business school loans. They are in good standing and dont push credit score below 700. Because why would I? I am only paying $7000 per year in interest on those while I am using the same $100,000 to acquire more property returning many times that cost of interest.) I know of no one extremely wealthy who does not understand and utilize the concept that low interest debt such as student loans or mortgages to acquire assets with positive returns can be a very good thing. Being debt free is over comfortable and scared middle class nonsense stuff. People who do not understand this within an hour of conversation such as whats in this few minute comment are usually people to strongly avoid. Understand and go into constructive debt on both. Just another opinion.  

I did a quick search for real estate investor groups in your area. Non promotional. : https://www.meetup.com/find/?s...

Class D neighborhood experience here. 1) The #1 thing is that the property is very secured as early as possible. Bars on windows, top security system to every entry point, high fences all around, and most importantly working relations with a neighbor or someone so that it is watched, and is never completely vacant. 2) I find it a bit difficult to understand how the property is not cash flowing very well if rented. The whole reason why some investors choose Class C or D neighborhoods is because the ROI is generally much higher in return for all the expected headaches and more constant management issues. Im a little confused on how or why the rental price is being adjusted. I would just set it at market rent or 5% below market rent in the area. 3) I think many of us would need to know the exact area to better advise. I prefer Class C areas, but am not at all afraid to get into class D IF the particular area is reasonably speculated to drastically improve and drastically appreciate over the next 2-5 years. This happens a lot in some such areas, and in others they are an entirely different animal. The largest factor is population growth or decline. I wouldn't let the unfortunate mistakes force me to sell the property and give up very easy. It sounds like some lessons learned that we all make along the way, especially in first years.

Yes. :) 

Currently in Watertown/Carthage area. Investing in Syracuse and Schenectady areas next. Also looking to connect.  

He must be talking 30% of net operating income. Of positive cash flow. This is what I was getting at earlier about what 10% of total rents collected for property management fees can do. To a valuation.  :/ 

@Erika Geoffrey I've bought mostly on market REOs and a few on market HUD foreclosures and VA foreclosures. The process the listing broker and atty who did closing paperwork didn't really stand out at all from otherwise. At real low price points (under $50K or under $30K) most are cash only deals where they need so much rehab inspections are frowned upon in practice. But the better ones are out floating all around out there on market at slightly higher price points. Ive gotten conventional local bank financing on such without noticing much difference.

Wow, 50 tenant inquiries and no one fitting the basic criteria. 

I dont get hung up on credit scores, but I often preface my comments as "Property type C and D landlord here". 550 isnt that low depending on the property type. 

But in this case, I would consider their answer to the low credit score another "red flag to my questionnaire". Just sounds like a lot of potential drama or Possible lack of responsibility on their end.  :) 

Whats commonly done and appears to often work well is: I would have part ownership (Equity share) of the property. Simple example:your $ / friend's responsibility for all management and rehab aspects etc. All proceeds split say 50/50.  The other thing to consider is I would want some decision making power-not sure the legal terminology. Any real estate lawyer draw these up for around $1000 well worth it.  Of course when flipping (unless doing a 1031 exchange)-you'll both have to deal with the capital gains tax, which can be quite large when getting into higher tax brackets.

Upstate NY investor here. I go wherever the best deal is-likely scattered across many small towns all over the State. I haven't really ran into any tenancy/vacancy issues.