All Forum Posts by: Michael Garrett

Hey everyone.  So here's the scenario.  I am a straight up H.E.N.R.Y.  An unapologetic HENRY but a HENRY nonetheless.  I love my job for the following reasons - Great 401K match, I write my own schedule, Allows me time with the family whenever I Need it, Great benefits, well above average pay, rewarding, fun, and all the things.  I tried diving into syndications (which I still may do in the long run) but realized the timing wasn't right and i want to spend time with young kids and don't mind my job.  So I'm in no rush.  My question to the group is...

I have 100K available to me via a HELOC with a Prime minus one interest rate (currently 7.5%) and a 20 year AM. If you were in my shoes, what would you do to create a minimum of 5000/month in 9 years or less. I am currently dabbling in private money lending. Current deal is 15% for 6 months. It's a start. Parameters are that I want it to be 80% or so passive. I don't want to talk to tenants, or brokers, or bankers, or sellers, etc. For now, I am more than willing to sacrifice returns for peace of mind, time with kids and hobbies. I've done all the other things and realized it just ain't for me right now. Look forward to hearing the answers!!

MG

Thanks for sharing!  This isn't an easy topic and it's good for your mind and soul to be vulnerable. I can tell you what worked for me as I had the same situation with my wife until later 2021.  She came up in a very risk averse household... (which surprises me to this day because her dad is an entrepreneur and so is her sister).  But I digress.. we talked about investing in real estate a lot.  In fact, when we first got engaged we purchased the condo I was renting and were well on our way to financial freedom.  Then I got burned by a few tenants... I wasn't involved with BP... we had a few kids and I suddenly was afraid to do much else.  We sold it all and now have our dream home.  Wouldn't change a thing.  Regardless, we would be in better shape had we kept our condo. 

After discussing at length many times what my plan was she was still very apprehensive. Finally I put it all out there in a three page hand written letter about my goals personally, for our marriage, and for our children. Summed up with using real estate as that vehicle. Within two months of that letter we had an LLC formed, borrowed 50K from my 401(k), and were making offers on MF apartments. By July we were under contract on a place and closed in September. We are far from our financial freedom goals but well on our way.

I hope this helps and best of luck!! 
 

The plot thickens. Got a call from the neighbor. Apparently no one has heard from the tenant in two weeks. He has someone living there who has been paying the tenant (my guy in the lease) to pay me. Obviously that hasn’t happened. He’s calling me because he has money to pay rent. What now?  Do I screen and go month to month while I figure it out. Does he owe all the back rent?  If he pays right away do I cut the one month loss, screen and inspect the unit? So fun!!  Haha

Thank you!  That’s a great idea. For those of you following now we did just post the 3 day notice on the door today. Unfortunately we did hear people inside so it just seems like he doesn’t want to pay rent. I’ve lawyered up and Tuesday starts the real deaL process if he doesn’t pay up. Although even if he does I think I’ll follow through with the process. landlords rights in Mansfield at least. Found a great attorney who seems very adept and has online walkthroughs. Been good so far. Flat fee too which I thought was great. Just gotta hope the apartment is a complete wreck once we actually get our hands on it… 

Thanks!  Mansfield Ohio is the city. We knocked today and looked around. No sign. I’ll do the neighbors. But they are on the same list of you ask me. Can’t wait to let their leases run the course so we can renovate and turn the asset around. 

Afternoon BP friends. I’ve got a fun situation. I inherited some seemingly bad eggs for tenants. I have a guy that did not pay rent in September due to (what he says) a lost Money order in the mail.  I have a trusted source that saw said check so we know it existed. Regardless I gave him the benefit of the doubt and said please pay both months in October. Now the good part. I text the first few days with no reply. Even told him we could work together on a solution (cash for keys in my mind). All I got was a “k” by text in response. Long story short I have sent two or three texts a day. Called every day and haven’t heard anything. Sent an eviction letter via certified mail.

At what point am I able to enter the apartment to see if he is even still there or the condition it’s in?  If he’s not there at what point can I trash all his stuff and renovate to get a solid tenant in there?  

Ok. Here we go. I don’t have much time so I hope I get a lot of answers. About a month ago one of my friends (former neighbor) told me they were moving. I always regretted selling my house next to their house wishing I kept as an investment. 

I digress, I jokingly asked if he would sell it to me and he told me his wife’s dad owned it so I would have to talk to him. We chatted a little more and I repeated to him about the offer and kind of forgot about it. Fast forward to today… I get a text from an unknown number; hey! I don’t want to be a long distance landlord. Let’s talk if you’re still interested in buying!!  

This is prime location in heart of great little village in south Florida. Primo short term rental area. I guess I need to know a few things. Should I start with letting him name a price? Should I have some options ready to offer? Do I need a contract for him to sign if we come to an agreement right there on the spot? EMD…? I feel like this is an opportunity that won't come along very often if ever. Zillow puts the house at 470 and my old house is now estimated at 680!! darn it… lol.

What do you think I should offer?  seller financing would be a dream deal come true. Would a 325 offer with 10% down and 6% interest at a 20 year am rate be good?  Or would that be rude. Maybe add a balloon payment at 3 years to pay it off?  I guess my main question is should I let him make an offer first or should I just be like yo… this is my offer. 

Any guidance would be greatly appreciated. Thanks in advance. The call is scheduled for tomorrow 9/15 at 3:00 pm

Morning BP’rs:

Despite the host of lessons learned with this first investment property (for another post) I wanted to ask the community about focusing efforts on Section 8 housing. Inherited tenants in a triplex and they are not the most responsible. Looking to turn triplex into 2, 2 bedroom duplex. My question is: what is the best way to find out demand for HUD housing? I looked at local website and saw no available listings as if I was a tenant looking. Is it as simple as a call to the local HUD office asking about waitlists and needs?

Second question: Using the FMR website; how much of that number is given to the landlord by the tenant? Or is any of it? Fair market rents for my zip code are good at 2 bedrooms and are about $900. Purchase price of 106,000; renovation costs not estimated yet, but cash flow could be very nice and once it's stabilized should be a nice cash out refi possibly. Not to mention being able to help a deserving family. Think I can do some real good.

Thanks in advance,

MG

Just heard something like this on one of the podcasts.  They went roundtable with a few experts about discounts on rent.  I liked David Green's answer the best which was offer a credit.  If that is indeed what you think you should do offer some sort of a "credit" as opposed to a discount.  This way there is NEVER any question what the rent is.  It always stays the same.  Semantics, I know, but it could matter in the future.  Also, Rob Abisolo mentioned perhaps buying them dinner or some sort of good will gesture.  Lastly, they all agreed, always go back to the lease.  Go with whatever it says on the lease.  This is a good time to adjust the lease for the next year if there is nothing specific.  

Best of luck! I just purchased my first three doors and can't wait to see what find landlording experiences await:)

@Kayla V.  I know this is an old post but did you find someone  you like and trust?  Looking for an Columbus/Ohio lawyer as well.  @Remington Lyman We are currently working with Marc in your office.  Thanks in advance.