All Forum Posts by: Keith Cullum

Quite an interesting topic. For the sub 2 experts, are there any unwritten "rules of thumb" that should be followed by new investors to this form of transaction? I am currently evaluating a deal with only the following information currently provided:

-Asking $25,500

-Approximate ARV 90k

-Approximate Mortgage including taxes/insurance: $470

-Currently occupied with tenant wanting to stay and is willing to accept increased rent(market rent in this area $900-$975/mo)

-Listing individual states this is a "no interest mortgage"?

-Property requires zero renovations

**Of course when I contact this individual I will ask disclosure questions; how much is the current rent, how much is left on the note, financials,etc....but how would you experts proceed on something like this?

Aaron I am looking to secure my first rental property, and was thinking what level of due diligence is considered proper and appropriate. When you first came across your property, I'm sure the numbers presented to you portrayed a profitable scenario, so you moved forward. From a financial documents perspective, what did you request from the buyer; such as rental verifications, deposits, P&L statements, etc. Of course anybody can write down numbers and show them, but what as an investor should we be requesting in order to be able to verify whats presented as financial fact?

Hi Matthew-I'm surprised nobody posted on this topic. I'm curious to know if you ended up pulling the trigger on this property, and if so what funding method you went with. I am in a similar situation myself deciding on best funding options with least amount out of pocket. Personally, I am leaning towards personal 401k loan with a combination use of interest only hard money.

Good analysis Joel,

I'm new to the arena, and trying to decide which direction of initial investing is best suited to me. Rentals sure seems pretty enticing given the right circumstances. Is there an average rule of thumb that applies to rentals(regardless of location) to hold as a basic criteria when considering properties? Such as expense to cash flow ratio, average occupancy rate, property management rates usually in the 10% range? Things like that are what I am meaning. Thanks.

Glad to have joined, and really looking forward to leveraging all of the great resources and expertise offered here. I have lived in the Houston area for 12 years, and the RE market here is dynamite! A very industrious and vibrant city, which I see crazy potential in. I would love to connect and network with investors in Houston to hear about some of your experiences, opinions and observations about the city, as it relates to RE investors. Actually, I'd like to pick your brain no matter where you are!