All Forum Posts by: Landon Bleau

I have yet to find a good website for accurate email addresses of absentee owners.  Of the websites I've used, Batchleads currently is my favorite at $0.15 per skip trace and, in my experience, the phone number is right ~70-80% of the time.  There also isn't a minimum spend like a lot of sites have, you can plug in just 1 address and for 15 cents usually get their phone number and mailing address.  

Sean, congrats on getting started! I would reach out to a VA lender and ask them to give you a rough estimate of what closing costs will be, I would say it'll be higher than $3,000. I've seen a few people post on here that VA loan is closer to 3-4% of purchase price in closing costs($5-7K), however, you can get into the property without a down payment so it's still very much worth it. Also, in my opinion, your vacancy (3%) capex (5%) and repairs (5%) seem a little light to me. I guess it depends on how new the house is, if it's a new build, I could see those numbers being feasible as there hopefully isn't much wrong with a new house. If it is older though, I would jack those up just a bit, closer to 5% for vacancy ($75) and 8% for capex ($120) and 8% repairs ($120), but it really depends on what you feel comfortable with. Even with those increases, you'd still be looking at cash flowing over $100/month with a CoC return over 20%, so still a good deal!

Bryant, it really comes down to what helps you sleep best at night.  If you're looking at properties in the $120k range, I personally would feel very safe with $10k in reserves per property.  If a tenant stops paying, you're able to hire a lawyer to help out, if the roof leaks, you can easily fix that, if the furnace goes out, you're able to replace that.  Some go much higher risk and only have 6 months of mortgage payments, or around $3k, some prefer to be extremely conservative and have years worth of payments saved up in cash.  It really depends on your risk level and what you feel comfortable with.  

Tracy, this is where you have contingencies built into your offer such as an inspection and financing.  In theory if the offer is accepted and you have an inspection contingency, you could walk in and inspect it yourself, decide you don't like it, and get your earnest money back and walk away.  You can also try to negotiate the price down or ask the seller to fix things just as you mentioned as well, all depends on if the numbers work or not.  

Grace, the cash flow is good but the CoC return is pretty low, you can more than likely get better returns than that in the stock market as long as it's invested decently, and wouldn't require any work from you managing. Since it's a neighbor, I'd try to get a little creative with it and see if they'll seller finance part of the home, requiring you to put down less money and increasing then CoC return. Sure the cash flow will be less by going this route, but you can invest the money you saved on the down payment on another property and get solid cash flow from 2 instead of 1.

I believe as long as you're sending a letter it'll be at least $0.55 for the stamp regardless of how many you buy, that's if you're doing the letters yourself.  I'm sure you know but you can also do postcards for $0.36 so you can send roughly 3 postcards for the same price as 2 letters, it all depends on what you prefer and what you're seeing as the better way to reach potential sellers.  

Tracy, assuming you plan on renting to students, I would say it would be a much better return to buy the house with more bedrooms.  Assuming there aren't any restrictions in your area on amount of unrelated people living in a house together, each room can typically be rented out providing much higher income vs the whole unit being rented.  In everything I've listened to and read dealing with college housing is getting as many bedrooms as you possibly can to get the highest rent possible.  

Blake, I'd assume they just want a guarantor of the loan and don't actually care if they have ownership or not.  They just want their money back with interest. I'd be curious to know if anyone thinks otherwise as I haven't actually been in this situation before though?

Zillow is showing it was sold less than a year ago for $50k less than it's listed right now, but if the numbers work, they work.  I doubt with it only being listed for 3 weeks at this point they'll take 50% discount on it, but there is absolutely 0 harm in submitting the offer! Worst they say is no and you're in the same situation you're in right now. I would double check the rents with the actual renters and make sure they're paying.  I have a hard time believing someone who purchased a property for $28k and has it rented out at $2,600/month would be "highly motivated" to sell unless there are some serious problems with tenants or the property itself.  

12% for management? I see you're only putting 5% down so I'm assuming owner occupied, why not self manage in the short term to increase that cash flow a bit?  Also, budgeting $0 for maintenance could lead to some problems, it's showing you're having positive cash flow but with regular maintenance my guess is it'll be much lower than that.