All Forum Posts by: Luke Lanier

Hi Karen, welcome to BP!  Sounds like you've already got some great experience.  I live in LR and I'd love to meet up with you and your husband and swap stories sometime.  And it's ok if ya'll match lol! ;)

I've never heard of that before...learn something new everyday!  So just curious @Mark Rogers, do you know how tax filing would be handled?  Would each individual "series" file it's own return? 

Congrats on the 4th flip!  Obviously you are doing something right or you wouldn't have made it past flip #1.

I had a similar experience.  I bought a flip with $30k potential profit and was too eager...I hired a contractor on a friend's referral but without doing my due diligence.  Turns out he was a dishonest guy, he wasn't licensed with the state, and he had a not-too-friendly history with the city's chief building inspector.  The inspector finds the guy on my flip and came in with guns loaded...I watched him drain the profit from my flip.  All because I was too lax with checking up on some very important details on the front end.  My mistake, my loss.  I resigned myself to losing my money on that one, and when I managed to eke out a $2,600 profit at the end I considered my self lucky.  I got paid $2,600 to learn some very important lessons.  

Someone once told me "experience is expensive", and now I know what they meant.  I'd look at it like this: you got paid $5,000 to learn how to make even better investment decisions in the future.

I'm not familiar with Arizona probate law but I can tell you that in Arkansas if the estate has a value of less than $100k the distributees are able to file an "Affidavit for Collection of Small Estate" and basically "skip" some of the rigors of the normal probate process.  For estates in excess of $100k they are required to go thru the full probate "Decedent Estate Administration" process.  I review both types of filings and see if there is any real property in the estate. 

I can also tell you I was able to glean some helpful information on the probate process/law simply by calling the County Clerk's office and a local probate attorney and asking very specific questions about the process.  Didn't cost me a dime but the information they provided was invaluable as far as helping me know where and how to focus my lead gathering efforts.  Hope that helps. :) 

If you sold the house you could use the $200k of equity to buy $1M worth of rental property (assuming you're financing with 20% down).  Instead of having one rental you could have many.  Or you could go into muti-family.  I'd think hard about that.  You could grow your wealth much faster by scaling up.

I think that when anyone is in a position where they need to ask for something in this business (whether it's someone else's knowledge, paperwork, or any other resource) they should be willing to give something in return.  This applies to newbies, experienced investors, anyone and everyone!

Everyone has heard the saying "there's no such thing as a free lunch" and it's true; I realize that someone had to pay for that contract, someone had to pay for that knowledge, someone had to pay with their blood, sweat and tears to gain the experience that I've attempted to draw from. I've asked for plenty through the years, but in return I've partnered and given both my time and my money to help those that I've asked.

I try to help others because I was helped in the past, and it's pretty easy to quickly identify those who want to use you and those who want to offer some benefit to you in return...you can cull the herd pretty quick.

Now that sounds more like a deal. And if you can renegotiate that negative cash flow, even if only by turning it into a break-even position, I'd say you got a home run.  $5000 down and a free and clear property in 3 years (and with a tenant already in place) is hard to beat.

I would definitely try to negotiate terms that would keep me cash flow positive.  But also consider this: are you buying the property at a discount relative to its current value?  If he's selling it to you at 50% of as-is value, then even I might consider taking that deal in spite of the negative cash flow.  In 3 years time you could refinance and get your initial investment back out of the property.  But if you're buying at 100% of as-is value, then that's not a deal to me.

One of the benefits of buying on owner-financing terms is the ability to space your purchase out over time.  A 3 year term seems awfully short; it's so short that it's almost like you're paying cash.  Now there's nothing wrong with paying cash, but I like to make sure I'm getting a really good discount when I pay cash so that I have the ability to refinance and pull the cash back out.

Hi Larry! Welcome to BP and congrats on making the decision to take action and pursue financial freedom! I'd encourage you to explore the forums and blogs here on BP, they contain a wealth of useful information. 

I'd be hesitant to purchase any property that I knew would have negative cash flow. Even if on paper it seems like a manageable cash loss over the 3 years, in reality things never work out exactly like you plan on paper. There are always surprises (like emergency repairs) even when your property is cash flow positive, but they hurt way more when you're losing money every month.  It sounds like the terms your co-worker is offering are a good deal for him, but maybe not a good deal for you.  

Best of luck to you! See you around the site!

When I mail "D4$" properties I just send what I call a "generic" yellow letter, basically telling the owner:

"Hi, I'm a local real estate investor looking for properties in your area, if you've ever considered selling we should talk right away...I buy in "as is" condition so you don't have to make any repairs...call me if you're interested in turning your property into cash."

I don't mention the fact that "I drove by and noticed the place looks pretty rundown so I figure you might be a really motivated seller!"  I've found that if they are really motivated my generic yellow letter will usually get them to call.  It might take several mailings though, so my advice is to be consistent and keep mailing regularly.