All Forum Posts by: Fred Ramos

Hello @Account Closed. looks to me like you have a clear idea as to where you want to get to. The key now is to stick to your plan. Forget the "shiny" objects, they can come later. i always have to remind myself that I would rather have a house rather than a new car (both about the same amount in monthly payment but at least a house will pay me where a new car won't). 

I wish I would have known at 22 what I know now. heck, i was interested in real estate in my twenties but, didn't act on it until my forties (Go Figure!). Anyway, my suggestion to you since it appears that you don't have much time for yourself due to work obligations and a little light on cash is this. Why not concentrate on purchasing a three or four-plex as your first property? My reasoning for this is two fold. One is that this will allow you to either live rent free or very close to it. With the right property, you should even be able to cash flow a little. Two is that this will allow you to grow quicker. by this i mean that instead of spending the extra cash you will have to buy shiny objects, pay yourself the rent (as you would to anyone else (No discounts!)) and let it grow along with your regular savings.

Doing the above will significantly cut the time between the purchase of your first property and the second. No magic here, just a little bit of discipline.

And lastly, Have you ever listened to Dave Ramsey on the radio? One of his phrases is "Live like no one else today so you can live like no one else tomorrow". Think about the meaning the of this phrase and determine what's really important to you.

I Wish you nothing but success.

@Amy E....Under no circumstances do you ever keep the same key on a unit when a tenant moves out. You can have all the no-no's in the lease about not making extra keys but who's to know the different? Also, try to get different sets of keys for your units and cycle them. You wouldn't want the tenant from unit "A" to also have access to unit "D". 

I have been using the Kwikset secure key locks for years with only a couple of issues thus far. I look at the ease of re-keying (takes about 10 seconds to re-key one lock) and that has far outweighed the issues I've had which one was my fault and the other was that the lock would just spin and not lock/unlock. I think I paid something like $48 for a knob and deadbolt.

BTW...not re-keying once a tenant moves is only inviting issues...not to say that all tenants are bad but would you want a call from a current tenant stating that all their belongings are gone but no sign of forced entry?

@Mills Snell....if you follow your rental agreement to the letter from day one, you should have no issues. As Max above stated, It's a business. 

Keep emotions out of your decisions...one day late means one day late. treat him like any other tenant.

Good luck!

@Cameron Cocchi If you're looking for true multi-family (5+ units), I would suggest contacting a commercial broker. There are plenty of multi-family listings that don't make it on the MLS which are listed with commercial brokerage firms. One site that I visit on occasion is Cityfeet.com (Click on the arrow next to "for sale" and the rest of the menu appears).

Hope this helps.

If it's a timeshare, run away and don't look back. Have you wondered why someone would be willing to let something go for less than half its value? Timeshares for the most part have not worked. Many people got (and still are) caught up in the sales pitch and just end up with another bill to pay. Many are now desperate to unload these dream vacation homes to the unsuspecting.

remember the saying, If it sounds too good to be true, then it probably is? In this case, if it sounds too good to be true, do some more research!

In looking for your first deal (or any deal, for that matter) be patient. Don't jump at something for the sake of jumping. and when you do jump, make sure you know what it is you are jumping in to. You wouldn't start a carpentry business without ever having lifted a hammer would you? Have you heard of many (or even, any) timeshare investors?

Best of luck to you.

@Dan Ward  thanks for the reply.

I think we will just go ahead and have it all re-tiled. I did use Kilz Original oil based primer to finally get rid of the stench...luckily for me, it only took one coat to do the job :)

Thanks again!

@Kevin Sullivan  and @Travon Allender

Hindsight being 20/20. If I could start over again, I would buy a 2-4 family and live in one unit for a couple of years. The advantage to this is that the property will either cover most of your living expenses or potentially all of them (better chance with 4 family).

Either way, your financing will be based on owner occupant financing rather than investment financing where you're required to have a larger down payment (25-30%)and will pay a higher interest (usually 1-1.5% higher than owner occupant).

Going in this direction will allow you to grow quicker since you can save what you would normally have been in rent and thus get you to the next property faster (as long as you don't spend it...discipline is key).

Travon, It is possible to finance a second property while still paying for the first. usually, banks will give you a 75% credit on collected rents (make sure to have signed leases). By that, I mean that let's say you collect $1000 a month in rents, the banks will add $750 of that (or 75% of $1000) to your income for their debt to income calculation. this means that if 75% of the collected rents cover the Mortgage, taxes and insurance then the whole debt of the mortgage on the first property is a wash (kinda looks like you don't have a mortgage payment). This is how we are able to keep qualifying for more properties. Every time we purchase a property, our income goes up and thus negates the standing debt.

Best of luck to the both of you!

@Dan Ward  Thanks for offering your expertise!

we recently purchased a house where the previous owners were heavy smokers and the house wreaked of smoke. The walls which were originally white (could tell by where they took their pictures down) were yellow. We had all the walls scrubbed with ammonia and citrus but that only took some of the yellow of the walls, not the odor. Ended up spraying the whole house with oil based primer and that finally got rid of the smell. The house is just about ready except that now we've discovered that the nicotine stains in the shower grout will not come out. we've tried just plain grout cleaner (haha) and white vinager mixed with baking soda to no avail. Unfortunately, trying to just remove the grout will be quite the chore since whoever did the job really didn't leave much of a gap for the grout. i have contractors coming to look at just replacing the tiles around the showers but was wondering what you might think about painted tile? I've heard of it and found some info on youtube but really don't want to waste my time if it's not process that will look right or last. your opinion?

sorry for the long way around to my question.

@Josh Martin Welcome and best of luck.

My 2 cents: 

1. make sure you have excellent credit (740+).

2. make sure your debt to income ratio will allow the carry of another mortgage without being tapped out (shoot for 42% or preferably less, this will include the added mortgage debt).

3. Providing you have less than four (4) mortgages or less, you will need 20% of the purchase price to put down (Most major commercial banks (BOA, Chase Etc..) will do mortgages 1-4 at 20% down, 25%+ for mortgages 5-10(not typically done by major commercial banks but can be found with investor friendly banks, check your local hard money lenders to see who they deal with since most HM lenders will not lend to you unless you get pre-approved to move the debt to a conventional loan after a pre-determined amount of time)). Pull enough of the equity of your existing rental to purchase multiple properties with cash flow. Keep in mind that you, like most people will probably only qualify for one rental unit at a time (unless you do a 2-4 family property). Why? because each property should bring you income. with every property you buy, your income will increase thus again lowering your debt to income ratio. with that, buy a property and rent it out. get a month or two of rents and repeat.

Good Luck!

WOW!!!...I'm Impressed!! Nice...I will definitely be trying this!  Thanx.