All Forum Posts by: Skyler Smith

If they are older, then renting it out might be the best option. It would be silly to not rent it out at all just to avoid paying taxes. They'll still make money! Why not get property management to take care of the property, and keep it off their mind?

If they're younger and more spunky, why not sell the house and use the proceeds to make a down payment on a larger property? A $100,000 house could rent for $1,000/month, but what if you could sell it and buy a $300,000 house that would rent for $3,000/month? Cha ching!

If they're even younger, why not tap the equity with a HELOC or mortgage and use that money to make a down payment on a bigger property, and rent BOTH out? That equity is a gold mine!

Love em! I've had two buildings that had only studios. I live in a college town and there are a lot of grad students or young professionals that love to live in them. Sometimes I'll rent to a young couple just starting out. If it works for your market, I'd do it! If it's your first deal and you'd be doing the management yourself, there would probably be a learning curve - but that would be true if they were all 3br units too! Good luck, if the price is right it sounds like a great deal.

Watch for those words "I am emotionally invested at this point, so I am going for it." I admire your fortitude for losing the first auction. It's important to stick to your buying rules. Now, when it comes down to it, it might still be a good deal, but take the time to evaluate if this fits your goals, and if you can still make money on this if the price goes up. Being emotionally invested is a great way to blow up a deal and lose a lot of money. Even though you should be passionate about your investing, the properties have to make sense from a strictly pragmatic perspective. I'd much rather barely miss an ok deal than pay too much for a bad deal. If it's a home run, and you know it's a home run, go all in!

I'd take a step back and look at the big picture. If the auction ends low enough that it's in your target range, it's probably still a good buy, even if there are others bidding against you. The bidding process is sometimes clumsy and frustrating, but the difficulty helps drive other buyers away - there are at least some deals out there for REO properties!

There's no problem with being pre approved before you pull the trigger on a property, so at least it got you that far!

Loved it! 

I loved where he talked about real estate agents investing their commission to come up with a bigger down payment. He said that some agents ask for up to a 14% commission to get skin in the game. Does anyone have any experience with that? Investing a standard commission seems straightforward, but I wonder how you get sellers to go for the higher amount - my guess is you just add that money to the purchase price. Sounds like a brilliant strategy, I'd love to hear more!

are these indeed Utah tax deeds? I know that in my area the municipality doesn't sell them (at least that's what they told me), I'd be interested where else you can get them.

18% is good, and if you have a good amount of cash, that's a good way to preserve and build capital of you can wait. If you feel like you could get more deals like this they might be good to turn around and sell to another investor to build up your capital for some bigger deals

Are you trying to make it an A house? Do you have an otherwise "A" bathroom? If you want to stay B and keep it as a rental, I'd go with something cheap from home depot, those don't look bad and they have a great price. 

If you're wanting to upgrade the house anyway, I'd tile the shower or go cast iron (as long as it fits the neighborhood)

I don't want to buy a property that someone died in. (Not just from old age)

You could ask the agent to write up the contract. If the home owner already is going to give you a good deal, the agent might be able to make the whole thing work more smoothly. You could ask for special terms that are in your contract to be added to an addendum at the end of the contract the agent writes up. 

Another option would be to ask for a finder's fee from your buyer and have the agent write the contract for the end buyer

Hey - you have equity! One thing I would take a look at is taking out a line of credit on Condo 2 before you become over leveraged with an FHA loan. How much is the county tax assessed value? Many banks will let you take out a secured line of credit on a property that you have equity in, and sometimes they'll give you up to the assessed value without needing to order an appraisal.

Advantages to having the LOC:

1. Low closing costs

2. Interest is only charged on the draws (vs mortgage that charges interest on the whole amount from the beginning)

3. If you pay it off, you can make another draw later - you could buy and sell multiple properties with one line of credit, one set of closing costs, only one credit check, etc.

Local banks and portfolio lenders can be excellent resources! I would see what they have to offer - the conventional loan will be easy to come by if this doesn't pan out. There's obviously risk with tying up your other property as collateral, but it could be a great way to get your foot in the door. I don't think it would hurt to see.

If you have a lot of equity another cool option is getting a HELOC or some other vehicle with revolving credit, so you can use it over and over again without having to qualify each time. These days though, you'll be hard pressed to find someone who will give you a revolving credit line on a house that is not your primary residence!