All Forum Posts by: Brent Rogers

This is my second time with notes investing and might be my last. The builder is unable to pay the note due despite leading me to believe everything was fine right up until the date the note was due. The note is secured but the collateral (land) is only worth a fraction of the amount due me. From everything I can tell this guy has a good track record with other investors but seems to have gotten too aggressive and over leveraged while the market has softened. He does operate from an LLC and the note is from the LLC so I am worried what my options will be. I know some property is currently owned by his LLC but I do not know what liens he has on them.

What are my options?  Is it better to try and work with him and give him some time or should I get a real estate lawyer and go after him as quickly as possible?  

Any experience with this is greatly appreciated.

I acquired a small property in a class A neighborhood that has experienced skyrocketing appreciation (at least for the south).  I usually buy for cash flow but bought this one with some thought toward appreciation.  It's one of those that has ok numbers as a rental and ok numbers as a flip today.  My thinking is to rent it 2 - 4 years and then possibly sell.  It's a small home (1500 SF) with 3 BR 2.5BA.  It would need very little work to put in place as a rental - paint, replace BR carpet, possibly replace some appliances/toliets and possibly paint kitchen cabinets.  If I were to flip I would probably need to update baths and do a little more in the kitchen.

If my plan is to only keep the house that long should I go ahead and update to flip level or do the minimum and do further updates just before selling?  I think the answer is do enough to get a good rent rate now and hold off on full updating but wanted to hear from others.

I am most undecided about the bedroom flooring.  It's three small bedrooms with carpet that I need to tear out.  The rest of the house is hardwoods everywhere except the bathrooms which are tiled.  Should I put in economical carpet or go ahead and put flooring in as if I were flipping now?  Maybe that is carpet but I'm not sure.  I could do hardwoods but it seems like it would be hard to make them match existing hardwoods unless I refinished the whole house.  That's expensive and I hate to do that for a rental as they are in decent shape.

This is only my third property and first one I consider a "tweener" as far as flip/rental.

Thoughts?

I joined yesterday but it wants me to buy each form for $99.  How to I get them for free as advertised.

I have an opportunity to buy a house that has been torn back to the studs.  New electrical and plumbing have suppossedly been completed as well as additional framing and new beams for the previous owner's planned layout.  It is in a red hot area where prices have gone through the roof and anything priced reasonably has multi offers above list on day one.   

The story I am getting is the owner/agent moved out of state and the contractor he had hired was hospitalized or became ill during the renovation.

I walked through the place and the work completed looked ok to me but I am not a builder and just a small time RE investor.  If I were able to get it at a price worthy of the risk what steps would you recommend to ensure I am not buying something that needs a lot of the work ripped out and repeated or any other big concern I could be inheriting? 

Make the offer contingent on some type of inspection beyond the normal stuff?  Structural inspection?

I have a couple of these at a large SEC school and have been more than pleased.  I disagree with the person who says location is overrated.  Walking to class, bars, restaurants etc. is huge.  Students seem to prefer the older houses that have location and character over the "purpose built" stuff that is more like a luxury dorm.

One of mine cash flows 13k / year and the other 8k.  The first is a 5 BR / 3 BA but only1600 SF.  The second is a 4/3 at 2300 SF.  The biggest bonus that I did not anticipate is the market has gone through the roof in the past two years.  Property values are way up to the point I have contemplated selling the second one because the return is not as great based on the current equity in the home.  That's a nice problem to have though.

The down side in this town is it has become a sellers market and there are no more deals to be had.  I wish I had started a couple years earlier and had 5 - 10 of these.

The key to me is having a good property management company that specializes in college rentals.  Your expenses will still be higher than a family renting but so is your rent.  The five BR I have rents for $600 / BR and they do 12 month leases.  There is a turnover week the last week in July where the place is cleaned if new tenants are moving in.

Lastly I live a long way from these rentals and only go in them once a year.  Again a good property management company is key here.  Mine only charges 7% and they can do this because their properties are in such a concentrated area.  I made initial improvements after purchase and the major items since then are usually HVAC issues or appliances going out.

Like many people I got into this when my kids went to school there buying a place for them and friends.  However after seeing the returns this provides in comparison to the stock market I hope to shift more here and less in the market.  I am also trying to buy locally but cannot find the returns in comparison to the college market.  It's really the same problem as prices have risen much faster than rents.

Heck no.  I started at 58.  I do not think I will amass some real estate empire like some on here but I think it will be very worthwhile for 10 - 12 years.

However I am finding it much harder to find deals than when I started.  That may not be the case where you are starting.

Does anyone know of a good calculator to analyze holding and renting a property versus selling?  I found one on allpropertymanagement.com that appears to be legit.  However it always returns a verdict towards holding and renting no matter what I input for sales price.  I do this for a five year horizon.  I guess it assumes:

1. you can get later what you can get now or better (it has input for this)

2. if your current returns are high ROI it will always beat a reasonable input for return profits from sale

I've done a couple of light rehabs but nothing substantial. I have found a FSBO opportunity and would love any feedback I can get before pursuing further. It's a 3/1, 1500 SF single family in a large university town. I think I can get the home for 85k and rent for $1350 - $1650 month depending on rehab level. I could get higher end of that range if I am able to convert to a 3/2. I have not seen inside yet to know if adding a 2nd bath is even a possibility.

What is a ballpark figure for a total gut job (including new roof) of a 1500 SF two story home?  60k?  I am confident in estimating roofs, kitchen, existing bath but not sure what it costs to literally take a house back to the studs if I have to go that far.

Given the location the lot is probaly worth more than the purchase price but there are strict laws that prohibit demolishing and rebuilding from the ground up.

Thanks.  The house had been on the market a while and the seller just put in new carpet and floating floor wood like surface everywhere.  I wish they had not put carpet in but I think I will leave it alone thru the first tenant changeover and then put something more long lasting in place.

I need to decide if I should replace kitchen cabinets entirely, replace dos/drawers, etc.  Maybe I will post a picture to see what others think.

Just bought our second rental house.  Like the first it is a college student rental so it turns over every one or two years but should stay 100% rented given the location.  The first house was fairly turn-key but this one needs some work.

The house has a fairly small kitchen and 3 baths.  All of this needs some degree of upgrading but I cannot replace everything.  I need to stick to a firm rehab budget of 13k for kitchen and baths.

I guess my question is where do I get the most bang for the buck?  Baths or kitchens?  Counters or cabinets?  Appliances?  Flooring?

My initial thought is college kids want a clean and working bathroom and appliances that work.  They are not as wowed by a fancy kitchen.

Thanks for any advice offered.