All Forum Posts by: Mark Trebor

I started investing in a very similar fashion but all four of us were engineers and three of us had good credit and one had average credit.  With our first house all four us were on a conventional mortgage together.  If your two buddies and you are not interested in getting married and settled down this is a good deal.  If one of you wants to buy your own house anytime soon this might not be a good plan.  As having a rental property will make financing a primary residence more difficult.

Using a community bank typically requires 20% down, shorter amortization and an adjustable rate. If you can get the FHA deal that sounds like the way to go, might be tough with your income and debt but the worse thing they can say is no. I would also recommend that you start watching YouTube videos for basic house repairs. If your roll in this journey is simply to be the guy that coordinates with the contractor to do work one day your buddies with the big salaries will say what do we need him for we can make some phone calls too. Show your value with hard work if your boy's are putting up money and credit to make this deal happen. As I said in the beginning there were 4 of us but now 17 years later there are 3, (the bad credit and no work ethic guy got the boot).

Why would you want to spend all that time and money with an Expo attendance?  You have Bigger Pockets!!!  If you can't find what you're looking for here to give you the confidence and information to get and get your first deal done then I am confident you will not find it at an Expo either.  I wish I would have found Bigger pockets 10 years ago and I guarantee my W-2 job would not be part of my life.  But having 18 houses I've done well it might have been 81 houses if I had Bigger Pockets earlier!  Just do it!

Its best to build cash!  If you build cash the credit will follow.  Having a stock pile of cash shows investors you can put money where your mouth is.  Nobody is going to give you a penny if you have a $100 in your checking account but you have this "killer property that nobody knows about".  Cash = credit = real property.  Sure a few people get lucky and don't need cash or credit but that is not the norm.  I saved for 7 years before buying my first property now I have 18.  Look into finding like minded friends or family pool your money and see if you can reduce the time it takes to build up that investment nest egg.  Good luck!!!

Hi Chris,

Couple thoughts for you.

1) The drain smelling is most likely coming from the first foot of the drain between the sink and the trap.  I have a baby bottle cleaner that I use.  Take the drain plug out run the brush up and down for 30 seconds flush with soapy water problem most likely solved.

2) As for the bathroom floor/shower problem.  If she had moved out and not told you, you would have hopefully noticed this problem anyway and then would have fixed it regardless.  Use the tenant complaint to your advantage when they start complaining about the inconvenience of a bathroom that is under construction.  Try to work with them and have the work done when they might be out of town or something like that...

Good luck

I will second Kerry's comments, conventional is definitely the way to go.  Assuming you have access to a down payment and good credit...

I've been in a partnership with two other people for 17 years.  All money is split 1/3,1/3,1/3 task our split up between, maintenance, finance and tenant communication.  The three of us come together to work on large projects.  Its not perfect but it works.  The more equal you make things the less chance I feel you have for people to be bitter, even if they sign up knowing full well there is not an equal distribution of money, or work.

@Marshall Martinez

I use QB's for all three of my businesses.  But I skip all of the bells and whistles and just use the register.  So if you know how to balance your check book you should be able to get the hang of QB's quickly.  It has allot of nice report features, my accountant can easily work with the files and all in all its just a good and easy to use program.  I've used it for 17 years so maybe I forgot the early learning curve portion, but I don't recall it being bad.  It's also affordable, a couple hundred bucks and I buy a new version every 2-3 years.  Have not moved to the online version yet but I can see one day them forcing it upon you.

Hi John, Like most things in life starting early gives you a better chance at success.  I started when I was 23 but I would say my start was not traditional.  I hope to start writing a blog on bigger pockets about my journey, here is the portion of that journey which applies to your question and my personal experience.

I always liked working on houses growing up, but followed a traditional route after high school.  Went to college for 4 years got an engineering degree got a job and started collecting a W-2 check.  I quickly realized that working for the "man" was not going to give me an early or comfortable retirement.  After working for a year I had gotten to know a couple of other young engineers who shared a similar feeling towards their W-2 jobs.  We decided to start an investment club, something very simple, $100/month and we would start investing in stock with the hope of one day having enough money to buy our first house.  Jump ahead 5 years and we had saved enough for our first down payment.

So the jump up is I found three like minded people that I spent 5 years getting to know, we had enough cash saved to easily afford our first down payment and feel comfortable that we would have it rented.  Many people would argue I took too long and with some respect this is true, the group now looks back and says boy if only we had bought our first house in 2002 instead of 2007.  We didn't have the money, we didn't have the relationship, we didn't have the trust at that point.  We slow rolled it, but now we have around 4M in property and all the though we are not rich and have not replaced our W-2 job (yet).  We all agree its the best decision we ever made.

So find some like minded people, everybody should know which end of a hammer to hold, everybody should probably have good credit scores, and you should be able to trust everybody you are involved with.

Writing that got me more excited for my first blog entry!  Anyway good luck

I personally pay for mowing with all of my single family rentals.  Keeps the neighbors happy, we used to have the tenants mow but then the mowing never got done and we got phone calls.  I see you're from Iowa so I am guessing prices are comparable to Minnesota.  I pay about $30 a property and have the grass knocked down every 2 weeks.

Sounds like with a $7500 budget you have $1875 per unit.  That isn't much!  The goal of the $7500 is to increase the properties value so that when you get the appraisal done you can then pull that equity out.  The biggest bang for your buck is adding square feet, next would probably be increasing bedroom/bath count.  For your budget I would say both those items are out of the question.  Unless you have an open dining room that can be converted into a bedroom.  But then you get into what kind of tenants do you want living in your house.  All of the items listed by Joshua above are good advice, having a property appear well maintained will help with the appraisal, but worn carpet vs brand new carpet is not dollar for dollar improvement in property value.  I would say keep the cash as your $7500 investment would need to generate $15000 in increased property value just to break even.  $14000 - $4000(closing cost of new loan) - $2500 (banks only going to let you take 75% of the equity) = $7500 (break even).  Hope that helps.