All Forum Posts by: Michael Wentzel

Back in 2004 we bought our first house on a no doc loan and borrowed the $5000 down payment. That was stupid, but we learned a lot and didn't end up upside-down on our mortgage.

Many years later I have had private investors put up the cash for purchase and renovations. I usually pay them 10% APR in the form of monthly payments. Once the house is renovated and rented, I go to local banks and try to get a commercial loan. They usually give 75% of the new appraised value. So a few times I've been able to pay of the private investor in full, make a bit of cash and end up with a cash-flowing rental. A few times I missed my numbers and left some money in the deal. But it has worked and allowed me to build my portfolio quickly.

Mike

@Kyle Kreider

My Realtor was often more willing to put in low offers if it was a bank and not an owner occupant selling. You don't want to offend them and have them run off, but if it has been sitting and has major issues, you can start low. 

If you are going to occupy the come, I would try to get a conventional or commercial mortgage. Hard money is expensive, even in the short-term. If you do get a deal and do the repairs yourself, you might have enough equity to refinance and get some cash out in a year or two. If not, you'll already be in a good long-term mortgage if it is conventional.

Mike

Hello everyone,

We have a portfolio of properties in Colorado, but recently made our first rental property purchase in the Midwest. It is a 4-plex in Akron and one of the units is vacant. I need some to do flooring and interior paint with a few other minor repairs. Are there any recommendations out there?

I actually already received a bid from a handyman that my new property management company sent out. I wasn't really excited about it. It was $2600 primarily for paint and flooring of a small unit. Nothing was itemized on the bid. Using the guys I know out in Colorado I think the bid would be $1000 less. So I'm not sure if costs are higher in Ohio (shouldn't be) or if this is literally the price of starting in a new market and building a team from the ground up.

Mike

@Account Closed

Hey Rudi. I have a number of properties in Colorado. I'm actually in the process of looking for another portfolio lender in Colorado. Can you PM me the small bank you are using for Colorado loans?

I also just purchased our first rental in the Ohio market. We have built a bit of experience in Colorado, but we are slowly wading into the great midwest. Which market have you chosen in Ohio?

Mike

@Account Closed

Hello Christopher. I love Pueblo and have an number of rental properties there. Send me a private message if you would like to be connected with a good Realtor with a lot of experience investing in the Pueblo market. Do you have your capital/ loan lined up for a purchase? I don't want to give you the contract unless you're serious about purchasing.

Mike

@Ryan Arth

I'm looking for B class and C class. Probably rentals since I don't have a team in place for rehabs yet.

Mike

@Luka Milicevic

If we could get @Brandon Turner to give us the quote and the source I would have a great line for my business plan. If it is true that 50% of landlords only have one property, that would say to me there is a lot of room in the market to purchase these properties and put them into a system.

Mike

@Brandon Turner

Do you have the actual statistic or source you quoted on a podcast in relation to this question?

Mike

@Jeff Gates

Do you know where that statistic comes from? It is helpful, but not exactly what I am looking for.

@Mike R.

@Samantha Klein

Many of you are managing properties on your own. It is obviously possible to self-manage properties well, but many do not. One the flip side it is possible for property managers to manage properties well, but some do not. Maybe the more important point is to create systems to make Real Estate Investing into a business and not a hobby. 

In the past couple weeks these are a few of the examples of what I have run into...

1) An experienced investor attending a REIA meeting and then going to make a repair on a unit at 9:00 pm instead of hanging out with everyone else at the restaurant afterwards...

2) Another experienced investor attending the REIA selling off properties because she is self-managing and can't flip the vacant units fast enough...

3) Another experience investor with 8 units selling out because of the constant headaches and two units being vacant for months because he doesn't have the time to fix them up and advertise them...

This is the kind of Real Estate Investing I do not want to be part of. There is nothing passive about it.

Mike

@Dave Visaya

I'm not crazy. That's a good start. Hopefully we can track down the quote and/ or statistic behind it.

I've been looking into a new market and even in the first couple of weeks I've come across a bunch of investors burning themselves out trying to manage their own properties. I would hate Real Estate Investing too if I was getting calls on nights and weekends and dealing with disgruntled tenants every week. Even in the local REIA I came across a couple investors with years of experience still bogged down with fixing up and flipping units.

I originally used a property manger because I was overseas. Now I always use property managers so I can scale the business and let them deal with 95% of the issue. Plus, if you find a good one, they are good at what they do. They know rental rates, they know how to advertise and they know how to screen and manage tenants. Best 10% of gross income I have ever spent.

Stressed out landlords are more likely to sell at a discount. So I guess that is good for me.

Anyhow, I need that quote/ statistic. 

Mike