All Forum Posts by: Jeff G.

Due to low inventory and trying to stir up more opportunities I recently put a few posts on Craigslist for my target market indicating I buy houses for cash.

I have gotten several responses and asked them a few questions via email prior to a phone call.

SO for those experienced in doing this, what is your approach to vetting people prior to making a trip to their property? I live 45 minutes from my investment community so I don't want to waste time on people who are not serious.

I assume you ask questions like why are you selling, what are you looking to get for property, and what deferred maintenance is there....

Thank you in advanced as always for your input.

The way I see it none of the questions are really relevant.  If they are friends, they are friends PERIOD.

I would do whatever is within reason to help my friends out, even if it costs me a months rent while I find a new renter.

Assuming they haven't damaged the property give them the security deposit back and move on to the next renter... preferably someone you are not close with...

You are missing a lot of information that I hope you have included in your analysis.

BUT if your numbers are correct and cash flow is $53/month, you will never make money at that.

My advise would be to keep looking.  

My minimum is $200/door cash flow so this would be a no for me.

@Steve Vaughan I have a lender that is actually very enthusiastic to be partnering with me on the commercial side.  They would like to extend a line of credit from day 1 so I can make cash purchases and immediately convert them to commercial loans at closing.

I thought I was making the correct decision some times I just need a sanity check from you experienced investors.

Thank you to all of you for your input.

To all you that have several or more properties.

I have two properties under private mortgages I am looking to refinance. My attorney strongly recommends continuing to keep both properties and all additional properties in the name of my LLC.

I can get great rates on the conventional mortgage side but will not be able to keep the properties in my LLC name. Rates and terms for commercial side are 5-5.5% with 25 year amortization and 5 year notes. My properties are, and most additional properties will be $50K and under for the foreseeable future. So I am juggling in my mind the benefit/risk analysis of keeping everything in my name vs the LLC. With such low loan values the interest rates are not THAT big of a concern but they are a factor. Another upside is that on the commercial side is I can have an unlimited number of mortgages. With a rapid growth projection of 1-2 more properties before the end of 2016 and 4-5 next year this could be an important factor.

So I guess I am asking you seasoned investors with large portfolios what you are doing and your reason behind it.

Thank you in advanced as always BP!

My first property was a duplex which had existing tenants.  Both those tenants are still in that property 2 years later with zero problems. I really liked the idea of having tenants in place initially as it was the peace of mind knowing that finding tenants is one thing I didn't need to tackle right off the bat.  Tenant screening can be overwhelming and stressful.  BUT the previous property owner had a great reputation in town as being no only a good landlord but an exceptional property manager for other investors.  So I knew there was a high likely hood that the tenants would be just fine.  

It's one of those things that is going to be so situational based that you will not get an answer on here that will be specific to your situation when the time comes.  Just look at every house based on the numbers, if a property presents itself that has tenants ask the existing owner how he screens them.  Despite the best screening everyone will end up with poor tenants sooner than later.  If you have to ride out an existing lease with crappy tenants to get an amazing house, that is a small price to pay.

As a newer investor who went through all the thoughts you are going through my advise is this.  Don't worry about every minute detail, you cannot be paralyzed by the fear of the unknown or all the possibilities of every situation that may happen.  Save your money, start looking at properties now so you have a feel for what you like and don't like.  Build a relationship with a realtor and tell them your time line for investing and what your plans are for the next 3-5 years.  Analyze properties based on current rents in your area that you see for sale.  This will give you experience to know how properties cash flow at different price ranges in your market and be confident when you are ready to make a move that your numbers are solid.  Read books and listen to pod casts every day!  Absorb everything you can from this sight, you will not find a better one out there with more people willing to help you out.  Then when you have the funds to put down on a house and you find one that the numbers are solid on JUMP in with both feet and join the ride.  Its can be scary and overwhelming and intimidating but it is amazing and you will figure stuff out as you go through experience and by relying on the vast knowledge base of the people on BP.

Good luck!

@Jerry Padilla may be a good guy to talk to.

I have never used him because I keep all my houses in my LLC name but @Jerry Padilla can loan down to that amount. I have talked to him on several occasions as I was figuring out my financing strategy

I personally found a local bank in my are that will write commercial loans at any value.  They also give me a line of credit so I can make cash offers and convert to a traditional commercial loan after closing.  

I don't look at a property that wont make at least $400/month.  So yes it takes me a bit longer to find properties in my area. BUT I also only buy properties currently that are move in ready.