All Forum Posts by: Shane Wilson

Hi Alan,

Are you talking income tax? I'm not an accountant but your basis isn't changing because you decide to rent it out as far as I know.

Also, current rules are if you live in your property 2 out of the past 5 years and decide to sell the property the profits are tax free.

Property Tax? In my area is set every year by your tax assessors office based on what they appraise your home at.

Hi George,

There is no reason they can not pay the taxes and insurance. The lender will pay the taxes and insurance because that's the purpose of the escrow to pay the taxes for the property. The person is irrelevant as long as they are getting on time payments from you.

In most cases you will not have issues having the name different from the seller.However, to make life easy, I suggest simply doing this. 

Put the property into a land trust called (Insert The Seller's Name) Family Trust. This throws off no red flags as families use trust for estate planning regularly and your allowed to name the trust whatever you'd like.

I suggest that you are too new and ill equipped to leverage that much money in a market you know nothing about where you have no clear income. 

At best maybe find an experienced investor in the area that you can be a money partner with but vet them carefully and make sure they are the real deal. You could also consider purchasing a multi-unit property to live in but make a careful decision with a lot of thought and research. 

But the idea of buying multiple houses with no experience in that market, no contacts in that market, no team in that market, finding tenants for these houses, repairing any said houses, closing multiple deals, plus moving your stuff, looking for a job, a place for you to live, etc is not realistic in my opinion. Leverage is a double edge sword. Improperly used it will slice you apart.

Yes. To find deals you need to talk to Motivated Sellers. Having motivated sellers respond to marketing is great but if you can't afford it go knock on a Seller's door and find out if they are motivated from talking to them. Its a broader more hard working approach that requires more time on your part but if you talk to enough Sellers you will find some who are motivated. Always leave an offer regardless.

Door knocking preforeclosures also works well.

Find a legit wholesaler in your area. Go bird dog for them. No cash means knocking on the door of a seller when you see a for sale in the yard and leaving an offer before you leave.

@Steven J. Careful with credit cards. I highly advise against your strategy of putting out some marketing and hoping for the best that you can pay them back off. You can put some sweat equity in, knock on 30-50 seller doors, leave offers at each and probably get a deal without spending a dime on marketing.

If it was me I would being doing some deals to buy, fix, and sell to generate some lump sums of income to apply to your rentals and get them paid down one by one. If you get one paid off apply all of that income to paying off the next one. If you get one it starts going faster to getting the others paid down.

But that's how I would proceed based on my previous experience and where I'm at now. I do not recommend maxing out the credit line and do not completely trust what a bank tells you. They are your friend as long as it benefits them. If the bank's situation changes they will have no problem changing their verbal agreement with you.

I would branch out and find difference sources of money besides the bank. This will also protect you if they happen to change their mind on your credit line.

No Money = Door Knocking. 5 step process.

1) Drive.

2) Look for a sign that says house for sale in a yard.

3) Knock on door.

4) Talk to the seller. Most importantly listen to seller to construct best offer possible.

5) Leave 2 offers. One cash. Another terms.

Do this 30-40 times. You should find a deal.

One more suggestion would be to appeal your property taxes and see if you can get them lowered down.

If I was aiming for a seller finance deal that gives me long term cashflow I would probably offer anywhere from 5K to 10K upfront and about 40% - 50% of what you think it would rent for as the monthly until paid off no interest. So for a $1000 market rent I would want the monthly to be between $400 - $500. This percentage guideline will as a general rule allow you to cash flow on almost any rental property. Down payments of course are negotiable. A lot of repairs means less down payment. After awhile offer to discount the remaining note. So if you still owe 56K after the down payment and one year of payments offer 30K to settle out early. Most sellers will take the early settlement.

How you would approach depends on what criteria and monthly margins your comfortable with.

I suggest to stay away from 2 bedrooms. They are slowest to rent and sale plus the turnover rate is highest.

There's of course a lot of variables but that's a simplistic explanation of how I would proceed based on my market.

As long as you can pinpoint what its worth, what it cash flows, and how well the general neighborhood is doing then I wouldn't say anything against buying and holding. The lease option is simply a safe low risk route I wanted to throw out there for you since you were intending to be on the move again within a couple years. Any of the methods will work. It just depends on your goals and what your comfortable with.

I would only give one other piece of advice to tell whoever you rent the other units too if your in a multi-unit and living there as well that you are only a property manager and not the owner. You can then refer to the owner's policies and rules to hold your ground much easier if any issues come up.