All Forum Posts by: Marc Izquierdo

Hey Dave,

I’m actually an agent and investor in Bristol Borough. I’ve been investing there since 2017. Multifamily properties are definitely hard to come by that make sense as a deal. When they do pop up, you have to be quick. However, that is what I’ve specialized so I’d be happy to help however I can. As an agent I work in the surrounding Bristol area (i.e. Bensalem, Croydon, Levittown, Langhorne, etc.). If you’re up for it, we can meet up one day and chat!

Hey David,

I’m actually an agent and investor over in Bristol, PA. I’ve been investing myself since 2017 and I’ve helped multiple new investors in PA and in NJ buy their first deal. I have a lot of experience in property management and the construction side of things too. I’d be happy to meet up one day and talk about what you’re looking for if you’d like. It looks like we’re about 30 min away.

Hi all,

Recently one of our tenants called and said that the sewer was clogged. Long story short, we had our plumber go in and it turns out there were “female products” in there. The clog was in the main sewer line after all of the drain lines from both units combined so I’m unable to definitively say which tenant is responsible. The upstairs tenants are older and his wife is rarely ever home. I doubt it was them. The downstairs tenants are a group of younger guys so I could see them having a girlfriend over or something like that. I suspect it was the downstairs tenants but I can’t be certain. I’ve asked them about it and no one knows anything. Does anyone have any advice on how to handle something like this? I’m feeling like I have to just eat this cost but of course I think about what if it happens again and again? 

Any help would be appreciated! Thanks in advance.

Yea it would be a judgement against that tenant which is all handled through your local court. We did this to tenants that moved out and left about $1.5k in damages above their security deposit. Typically you'll file for a judgement, they'll serve papers to the tenant, a court date will be set, and you'll be awarded the judgement if you win. In our case, the tenant didn't show up so we automatically won. Once you have the judgement, that definitely doesn't mean you'll be paid. Since our tenant moved out, it was hard to find their new address. They actually moved from PA into NJ so we had to transfer the judgement. It just added a whole new layer of challenges. However, once you have the judgement, there are a variety of things that you can do with it. For example, we garnished his wages and were paid a certain amount every month until the judgement was paid. Fortunately, my partner is really good at "tracking people down" and navigating the legal side of things. However, if you want to avoid the headache, you can sell your judgement to a judgement collector. Say the judgement is $1k, they might buy it from you for $200 and try to collect on it. If they do, it's a payday for them, if not, they're out the $200. You can see the risk. Hopefully that helps. Good luck!

Hey Willie,

I remember being in your spot just about 6 years ago. I was also 26 years old and was ready to throw my life into real estate. My advice to you is to first shut down that LLC and stop paying the fees. You don't need an LLC to get started and it's just more money that you're spending and not saving for a property. Additionally, I recommend buying your first couple of properties in your personal name. Doing it this way, you'll be able to get a nice clean conventional loan. Loan underwriters will love you, especially with a full time job. You'll get very favorable terms this way. I bought my first three duplexes and a flip I just finished in my personal name (no LLC needed). Just make sure that you put good liability coverage on your properties (I usually look for at least $1M per property). Additionally, get some umbrella insurance to add more liability coverage. It's maybe $50 bucks per month for an additional $1M. With that structure, there should be no need for an LLC.

Next, go get an unsecured personal line of credit for as much money as you can get while you have your full time job. This will turn out to be invaluable in the future to use for rehab costs or whatever else you need it for (from a business perspective, not consumer spending!)

While you're doing that, save, save, save! While you're saving, learn, learn, learn! Books and podcasts should get you the knowledge you need to start. Real estate is a slow and boring process. So as you're saving and learning, you're probably going to feel impatient but it's what needs to be done at this stage. Best of luck to you!

The electrical work sounds right. I just had a panel, meter, and service cable upgraded from 100A to 200A for about the same price that your handyman charged you (mine was done by an electrician). I think the door installations sound about right also. I recently had 6 interior doors replaced (only the doors not the frames) and two exterior metal doors (similar to what you had done) for a total of $3200.

For the tile, it sounds like he's doing the tub surrounds only, not the flooring? I honestly don't think $5,500 is terrible for the two bathrooms. I'd maybe like to see it around $4,700-$5,000 since you bought the tile. There is a lot of back and forth for the contractor (waiting for stuff to dry, having to leave, come back, etc) which adds cost. However, I've done all of my tiling myself so I really can't say for sure that it's a decent price based on my experience. Tiling shower surrounds is pretty common so I would think someone would be able to chime in with those numbers. 

I highly recommend reading the BiggerPockets books "The book on rental property investing", "The book on managing rental property", and "The book on flipping houses". I consider these to be my foundations. After that, save up some cash and then talk to a real estate agent in your area to describe what you want to do and when you want to purchase your first property. I wouldn't necessarily reach out to an agent until you're about 3 months from being ready to buy.

After you've done all of that, hopefully your agent will start sending you properties to look at. Most of them won't be worth buying. However, you should prove that to yourself by doing a full analysis on each property. As you do your analysis using the principles you learned in the books that I mentioned, you'll start to build a spreadsheet that will help you analyze deals quicker in the future. You'll also start to get familiar with what makes a good deal. At that point, you don't have to do a deep analysis on every property anymore, you'll be able to quickly identify possible deals.  

Hey Dave,

For the loan payment, you can simply input the loan amount ($7M), the interest rate (4.25%), and the term (30 years) into a mortgage payment calculator and you'll get $35,468 per month. Multiply this by 12 to calculate your mortgage payment on an annual basis and you'll get the $425,616 number that is on the spreadsheet.

The levered net cashflow is the NOI - Mortgage Payment. Keep in mind that all of these numbers are on an annual basis. This is called "levered cash flow" because the mortgage is considered to be leverage.

Hopefully I answered your question.

If you're just starting out, I highly recommend a live in flip, especially if you're handy or even want to learn some construction skills for the future. This is how my girlfriend and I started. After the renovation was done, we pulled a significant HELOC on it and used those funds as the foundation for future deals. If you're living in it, there isn't a huge rush to finish so you can take your time and start to experiment with construction. I think it's an awesome way to build equity and get a lot of on the job experience.

Yup, this would be a private loan, not hard money. The two main documents that you'll want to have are a promissory note and a mortgage document. You should definitely talk to a RE attorney to get more information on these.