All Forum Posts by: Joshua Hollandsworth

@Andrew Syrios That's what I'm thinking. However, I see in certain markets investors are buying sub 20k houses, rehabbing, and selling turn key to other investors for 50k-60k. I think there is still equity to be captured. I think if you stick to a specific niche, it might still work long term. If you make a rule to never purchase over 1200 square feet, you can better calculate CapEx, and It should be lower due to the size of the house. Definitely a good point though. Thanks for the input!

@Lee Lockhart Excellent points made! Thanks for the input. @James Woodrich I won't be chasing rent when they are on Section 8. People also told me I would hate running a rooming house in the hood, But my tenants are great, and cash flow is amazing. It's all about screening. Sure, I have to kick one out every now and then. It's all part of the job. I guess I look at it as a business, rather than an investment. I can't get a concealed carry because I'm only 20. But it's on my list! Most of these areas aren't nearly as dangerous as they are made out to be.. Thanks for the advice!

@Brian Pulaski All 3 friends of mine, that I know who personally do this for a living, have a 3rd party who takes care of everything. Viewing, showing, rehabbing, renting. I understand what you're saying. Jesse Wright. Look him up on YouTube. He breaks down this entire business model. Buying in bad areas has many pros in my opinion. Here are the top 5. Number 1) The home can not depreciate during a market crash, and if it does, who cares? Low income rentals will be THRIVING. And You are only buying for cash flow. 2) Deals are endless, because other investors are "cautious" 3) 15k. Come on. NO BANKS. NO CAPS. NO GUIDELINES TO FOLLOW. 4) During Turnover Periods, you may lose $150/Mo on taxes and insurance. On a 350k rental, you are going to be hurting during turnover periods. Also, during a crash, depreciation will really, really, really hurt. 5) 25%+ ROI's. That's just how I look at it. The main cons are easy. House will be hard to sell. Area is dangerous. etc. I guess everybody views neighborhoods differently. What I consider a bad area may be "undesirable" in your book. When I say bad, I am not referring to War zones. Just distressed, low-income areas.

He told me "These houses aren't always cheap because of their condition, but because of their location. Other investors wouldn't touch these properties, and that is why I make so much money doing it."

I see more and more investors buying 10k SFR's in low-income areas. They put 5k-7k into rehabbing the house, and renting it to Section 8 for a nice, consistent ROI. I personally know 3 people who do this. They actually never even step foot on the properties they are purchasing, and they are all doing very, very well. A friend of mine let me see the numbers on one of his deals. Here it is. $5000 purchase. $7500 getting the home Sec 8 ready. Gross rent is $800. Property taxes are $100/Mo. Insurance is $60/Mo. Water+Sewer is $80/Mo. Vacancy/Repairs/CapEx $200. Rental Registration $3/Mo. Lawn, trash, snow, are not paid for. Taxes include Trash removal. PM is $75/Mo. Expenses- $518/mo. Cash Flow- $282/Mo. No mortgage, really not losing anything during turnover periods, and I think that CapEx is more than conservative. 3br 1 bath. 1200 sqft. Also I would like to add that he does NOT rehab the houses himself. He has bought and rented 2 houses per month, for the past year. Curious on what your opinions are, and why you do or don't like this strategy.

@James Wise Thanks a lot, I was hoping you would comment. How do I get the certificate of occupancy? Do I need inspections, blue prints? What's the process?

@John Thedford Thanks John, I figured! I will do that.

I am trying to open a HUD-VASH home. I am trying to rent out a 3br SF by the bedroom. The City of Cleveland has specific regulations for these types of homes. I am in the correct zoning district, I have paid rental registration, I have been personally in touch with Zoning Board AND Building Department throughout the entire process. Here is the issue- The City Zoning Board tells me I need a Certificate of Occupancy. They told me to go to the Building Department Office. I have gone there, 3 times and spoke with multiple people. I want EVERYTHING to be 100% legal. The building department told me, in exact words, "You'll be fine. Certificate of Occupancy, and inspections and such are for commercial properties. You are good to rent out your rooms, it would be different if there were 5 or more bedrooms, I assure you, THIS IS ALL YOU NEED." I reached back out to the Zoning Planner and he told me that he didn't know why I was told this. So I went BACK to the Building Department, spoke with the same employee, and he told me that I am good to rent out my rooms, and I do not need this certificate. I have tried to contact the administrator 6 times, and of course, nothing. I have documented every conversation, email, and name, for my security. Please advise me on what to do, I don't want to build a business around "What-if." I want to buy multiple HUD-VASH homes this year, and the City is telling me 2 different things. The State of Ohio has informed me that I do not need anything from them. (licenses etc.) I do need inspections for HUD-VASH approval, but I am worried about the City fining me down the road for not having all of my legal permits. I AM TRYING TO GET PERMITS! I am trying to play by the rules. What should I do.

Do credit unions sell their mortgages? What are some of the main benefits for real estate investors when joining a credit union?

@Frank Sousa Where can I see these videos?