All Forum Posts by: David P.

@Peter Fokas did you have a written agreement?  Did the scope of work change as @Alan Russell has indicated above?  No matter what the work is to be completed I always have a written estimate to start job; amendments for additional work - and statements "Not to exceed $".  

If you didn't have a written agreement, it would be best to document everything in writing now while it is still fresh in your mind.  Take photo's and video of the area, what was completed and what was not completed etc. 

You may end up with a lien against your property, so ensure you check prior to sale, re-fi, etc as you don't want to have this surprise at an inopportune time.  Additionally, you may have to go to small claims court, so having this documentation completed and ready to share with the court will be valuable.  

Send the contractor a dated certified letter explaining (with signed return receipt) the situation and why they will not be completing the job as discussed.  Ensure to indicate "No further payment will be made" as well.  You may want to have legal advice on this as well and even have them send the letter - it will show strength and that you are not messing around.  By all means, keep the letter professional, short and to the point.

Good luck, and please remember to VOTE on reply's you think have helped. This validates respondents posting and lets readers know that this information was valued.

Hope you have an excellent future!

- Dave

Welcome to BP @Martín La Rosa - Congratulations on beginning your investment career.  Although you are 26, you should always care about cash flow, but it is also important to build capital as well.  Living in a property is not cash flowing, and you should not necessarily consider you home as an investment - you are moving from rent to mortgage and additional cost associated to owning a property.  

If you are truly purchasing for investment the numbers will work for you and there are some great Spreadsheets available on BP to help you analyze the property.  

Here is one I have modified for my own usage: http://beta.biggerpockets.com/files/user/MrMadMoney/file/property-cashflow-analyzer-v12

If I were to analyze this property, consider all the cost associated with this property.  I have traveled to Europe and South America, and know cost/taxes vary from region to region significantly.  Although I am not familiar with Argentina except for my limited travel there, property cost such as these can reduce the cash flow significantly.  Additionally, will you be managing the property if you decide to rent to someone else or live in it yourself.

I think you need to weigh the amount you spend on rent to what you would "Cash Flow" from buying the property.  Once you have determined the cost benefit you can make the decision weather to live in the property or not.  

Good luck, and please remember to VOTE on reply's you think have helped. This validates respondents posting and lets readers know that this information was valued.

Hope you have an excellent future!

- Dave

Great Job, and congratulations for reaching this milestone! 

Hi @James B. , @Michael Noto is right on track with his advice.  I do very similar things here in the Denver metro area.  As the market heats up I normally require 3X rent, and I use MySmartMove.com to do the credit and background check.  This is a great way to have an independent analysis of these reports as well as your gut check.  I take a paper application and screen employer, previous landlord and MOST importantly is the 2nd previous landlord.  This is usually where you find the truth about the tenant.  

One additional question I like to ask both the tenant and landlords is how much of the deposit was returned to the tenant?  If below 50% it is very questionable if they will return your place in good shape.

Good luck, and please remember to VOTE on reply's you think have helped.  This validates respondents positing and lets readers know that this information was valued.

Hope you have an excellent future!

- Dave

Yes, @Will Hampson you can add an eviction clause, but be careful of the wording as cleanliness is debatable - everyone has different expectations acceptable tolerance.  You must also provide a written warnings and after X violations and outline the steps taken to evict such as 10, 20 or even 30 day notice of lease termination.  It will be critical to document everything that happens otherwise it will be your word against theirs.  This is exactly why you want to ensure you have a legal review of the document.  

Search the internet and compile all of the best things into one lease and then have a lawyer review; it will save you time from them having to write one up from scratch.  You may not have to worry too much if you screen your tenants well.  

Deliver the application to their current resident, look to see what type of vehicle they drive, how well the vehicle is maintained and even if there is trash on the floor of the vehicle will give indication of how they will treat your house/room.  Additionally, once you have decided that the person is the right one to move in to your property, meet them for coffee or even lunch and watch how they behave; it may be worth the $15-$20 to getting to know them prior to allowing them to live in your house.

Think creatively and do your due diligence and you should prevail.  

- Dave

Hi @Nate Larson I will PM you about this deal.

Hi @Will Hampson it is great you are renting out rooms, but yes you should have a good lease. Leases are what you want; and even if you are owner occupied, the lease should outline the expectations expected by you the owner.  Renting to strangers opens you up to other things, friends/visitors, cleanliness, pets, smoking, drinking etc.  

I would suggest you search for leases on the internet and even have a Real Estate lawyer review it so that you don't violate any laws, and that it holds up when/if you have to evict the tenant.  I would also highly suggest that you use MySmartMove.com - you can get to it by clicking on "Resources" in the tool bar above and selecting "Tenant Screening."  Let the potential tenant pay for the credit and criminal background check for $30 if they are serious.  This provides an independent scale of 1 to 5 - 1 you should not rent and 5 is a great risk.  Have a good application and follow-up on all information contained within the application, this process will help you understand the new tenant that will live with you.

Please note, this information is not financial nor legal advice and you should talk to a professionals in these fields.

Good luck, and please remember to VOTE on reply's if you think they have helped.

Hope you have an excellent future!

- Dave

Hi @Joe Hernandez  it's important to be set-up correctly so to limit your liability. When you go for a loan, the property will most likely be in both of your names whereas you may want to consider putting it into an LLC. This structure is better advised by a real estate attorney, but no matter how much you trust your partner, it could become an issue as you start rehabbing the property and any leans on placed on the property. At a minimum, you should have a partnership agreement in place to outline financial and duty responsibility.

Now to your specific question is it better to be approved and qualified? Yes that is good, but cash gets the deal completed quickly which is often the key to getting deals.  Some times qualified only means that you and/or your loan will meet the criteria set-forth and does not take into account time for appraisal, inspection, counters etc to be completed and then... underwriting and closing.  Cash deals can often be completed quickly and when trying to find a deal to make money this is what most sellers prefer. 

Additionally, when doing conventional loans, lenders may not be able to lend on properties with out a kitchen or that needs extensive work.  This can often kill a deal and some experience sellers may not even go down the path with you if you are trying to get conventional financing. 

You may want to talk to a few hard money lenders to try and get money lined up.  They will ensure you can do the deal or they may not even invest in such a rehab due to the high risk associated with this venture.  Being new to the Real Estate game, it is great to have another set of eyes looking at your deal.  It's will be hard to justify the high cost of the money, but the benefits may outweigh the negatives.

Please note, this information is not financial nor legal advice and you should talk to a professional in these fields.

Good luck, and please ensure to VOTE on reply's if you think they have helped.

Hope you have an excellent future!

- Dave

Hi Ted, sometimes I come across these type of deals, but they are far and few between.  I am in the North Denver area, and am more a buy and hold investor, however looking for fix and flips as well.  I would like to network with you and pass deals back and forth.  I am hoping this type of networking will help lead to more leads for me as well.

Please PM me if you are interested in networking and to see if there can be some synergy here.

- Dave

Hi @Joel Petersen and welcome to BiggerPockets!  Although I am not an agent or even living in the Phoenix area I would like to network with you.  I am an out of state investor in the Phoenix market and always looking to network with like minded individuals.  Also, I am working with others that live and invest in Phoenix and by building our networks you never know when our paths will cross.  

I will PM you with my personal contact information, 

- Dave