All Forum Posts by: Josue Vargas

Only the early 7 Wonder Worlds?  Why not the full Gama of wonders throughout the world?  Hint: There is one in Puerto Rico @ Caribbean (and the Island of PR is part of the US, yes dollars and no passport required for US citizens), "El Yunke National Park" in Puerto Rico, the largest rain forest in North America!  Please don't get lost on the trails if you are not an experience person). 

"Let's anything interesting..."  Well, for me is to be financially free, with at least two-three personal houses, and be able to move freely without the "governing" vacation time or "PL" time from the big corporate job (even thought I'm part of the big corporate which I enjoy a LOT, I call this diversity, because I'm investing and like to invest on many things as possible, if that makes sense).  

While others might not enjoy their work, there are like 25% of people that actually enjoy they work... I'm not in that range... thought, I enjoy my profession, which is different of enjoying my actual work or what I'm assign to do by others.  

One thing I want to highlight... suppose I'm back to the collage time.. so WONDERFUL Experience! Me as a student, I just can't see me commuting 25-30 minutes from-to the house and University. 

Even if the investing price is comfortable, he needs to analyze how many students are willing to travel +25 min commute and how much vacancy he needs to expect in the 4-5yr degree of collage of his son/daughter.  Maybe he is in a zone that other-than college students are willing to rent a room.  Not sure, it looks odd to me that you should invest in a property so far from the Campus/University that will just attract mainly the working class looking for a room. 

@Andrew Schlessinger, love the idea.  My son is no near college age and I have plenty of time, but I'm planning to do that myself when hi is ready... 16 years from now :) ...

Thought, I'm considering to invest in a student rental close to a University in the near future.  Yes, there will be more repairs, but the beauty is that you can rent by doors inside the house!  Its like having a multifamily but smaller, one house 4 bedrooms, 4 individual leasing.  If one student leave, three stays, no empty house! And then the rent per bedroom combined is likely larger than renting the whole house as one lease!

My experience with college students is minimal, I've had maybe three student tenants from now and then on a one bedroom apartment on a span of 6 years.  I see a lot of benefits on these deals for houses of 3+ bedrooms.  Also, students don't mind staying longer if you treat them well (don't be too aggressive with lease rules and that sort of things, they are college students, treat you business as a business, do not get attached to the property). 

Hint: Make both the student and their parents sign the lease, it may save you some troubles down the road.  I love to learn more about this! 

Regards,

Josue Vargas, PE

Concur with @James Barnhart If the work is completed and you are satisfied, and is just that "strange thing sticking out of the floor" seems to be covered with a 10% holding payment, pay him the other 40% of the work, and them talk to him.  Like big contracts, for smaller the contract is ($1000 or more), I always have a 10% holding payment until a final inspection approved by me or designated inspector, in the contract (seems this is not your case). 

I also pay materials upfront upon showing material's invoice or quantity and fair market price for materials on-site, not the 50% up-front like a lot of contractors wants.  I understand they are working for their business, but so we are.  

They can find us wright?  They know we likely have a lien in the house, they know we own the house.  The question is, once that 50% up-front is paid, can we find them?

Agree to some degree that an inspector main job is to merely find all defects.  And this is just my opinion... I like to think that an inspector main job is to find defects AND highlight the ones that matters.  If a list consist of 400 line items, such as "dent on wall, scratch on wall, tile missing, door knob loose and missing a screw" and do not highlight the important ones, it will be difficult to see the overall condition of the house.  Tell them to take a lot of pictures or a video of the house if you can't see the house by yourself.  Keep in mind, even a new construction could have 150 miscellaneous line items pointed out by inspectors.  

Also keep in mind that most inspectors will not tell you if there is actually an issue with the foundations or windows or termites or these kind of items.  They will likely describe what they see and what they consider a concern, and most will recommend to call an expert in these matters.  

In my opinion, I do not like reports with a bunch of miscellaneous items that are obvious if it doesn't help me in the negotiation or determination to press forward or walk away. 

@Aaron Garcia

There is no rule! 

No disrespect at all.  A wholesaler should know the value of the property in the market "as is", and how much an investor is willing to pay  for the property "as is". There is no magic formula like 70, 75, 80, or 85% of the ARV. And what is the ARV really means for you and the buyer?

If you ask me, I want a 75%-80% of the ARV plus CASH FLOW!. But it's up to you.  Buy and hold usually have more flexibility to pay more because they are not looking for premium materials, costs involve on the ARV for selling, holding costs, etc., Buy and hold usually will likely get you some advantage over the flipper for selling price, not necessarily true for cash buyers.  That depends greatly on your market and competition for your deals. 

Now, must of the wholesaler estimates are usually on the pessimistic side of things.  Oftentimes the comps are for more bedrooms or living area that the advertising house area...  That's a sign to walk away, at least for me, why spend time with these guys that do not know what they are doing (or do know what are they doing for their advantage)?  I wish there were some rules as to comps and cost estimating for Wholesalers. 

PS: I do not know you, and this was taken from my experiences so far.  

@Nick Wusz @Austin Youmans

Engineer here too from Texas! Howdy! We are not alone! I'm new to BP as well but with some experience in REI. If you are in doubt and do not know much about REI, I would recommend, however, wait and have some capital to invest (20% down, holding cost, Lender points/interest, rehab, etc.), and be very familiar with your houses/properties in your local area first. Some other riskier individuals that maybe better off their current job will say, jump ahead and be creative in your first-second deal. They are very motivated and probably will figure it out...

You don't need to read tons of books with fancy wordings or great "quotes from famous people". Just read one or two, then STOP! Better spend that time and go to open houses, evaluate the properties, analyzed the numbers, and you will see most MLS will not work. But, they are a blast! You will know what they are asking on "value market" and then compare. You will also meet a lot of agent, and maybe one of them is an investor as well and can help you greatly.

I often do "Drive 4 dollars" after picking up my son from daycare, because he is usually asleep and I just don't want to wake him up.  

Get some spreadsheets for calculating flips or buy and hold.  If you are not familiar, I would recommend considering the Pro here in BP, they have all the tools needed.  

@Jim Ziccarelli

Have you checked your insurance policy to see how much deductible you will pay "out-of-pocket" before any reimbursement made by the insurance company (assuming they will cover the work expense)?  Also, because this is not related to "major force", such as hail storm, hurricanes, and the like, your insurance policy may be increased because of this claim.  Many contractors are very familiar with insurance policies and what not.  It will make no harm to call one licensed contractor to give you a quote and then learn from them.  Call more than one, compare quotes, thought if its going through insurance, from my experience, they will likely say "no negotiation because insurance is involve".  I always try to keep the best value for money I can.  

@James McCard

My initial plan is to wait and get some debt paid off by 2019 then save for down payment, rehab cost, lending fees/points, etc.  I understand this strategy for some investors is not the priority, and they want to get the no money down - or low -  and go from there.  That's why I'm asking and seeking some advice from people that have done it and maybe they can explain how they have actually done it using equity on their properties or other accounts.  

While I have three properties, none of them were actually acquired thinking on REI or rental properties, it just happened that way for some life's circumstances.

Bottom line, yes I could buy a property in the next 4-5 years all-cash and have a very good cash-flow, but then I will have to wait again to get some capital for investing and continue on.  Not to mention the seasoning period to get the rental income count toward the future loans.  Still, an option, but considering not to pay the next property all-cash.  

@Barry H. 

Thanks for the advice.  How this money could be of any advantage to me without taking it form the account.  In other words, conventional loans or even Private Lenders take any of that money in consideration for equity?  My company matches 8% and I'm of course maxing out and splitting it on traditional and Roth.  Quitting my job is definitely not an option, except when the time is right (actually investing in the company shares... its an Employee Owned Company in the Defense-Engineering industry).

I thought that 401K (at least a % of my contributions to the plan) could be used as a line of credit somehow?