All Forum Posts by: David P.

I like duplexes because if one side goes vacant the other side often pays the mortgage.  This is one of my 2nd deals and well worth the investment, and now is my cash flow cow!  No I didn't buy the property right (nor lived it as owner occupied), but have owned it over 7 years now, and finally with the increase in demand, the rents are pushed up to market levels and the neighborhood is turning around and the appreciation has gone up about $50K within the last year or so.

I acquired the property with 20% down which was difficult to do.  Additionally, I have self-managed the property and did most of the repairs and maintenance myself.  All in all, a great way to start and get comfortable with being a landlord! 

Check out the property analyzer form on BP, or you can download the one I use.  

REI Property Analyzer - Version 2-1

Fill it out for each of the properties and see if the numbers work.  If you need help, please PM me.

I purchase personal residence when I was 25, and first rental when I was 40.  

Financing is scary when it's your first time, but start calling around to different lenders - look at BankRate.com for rates and companies that service your area.  Living in Tucson, and purchasing there you may want to try a local or regional bank as this will help you in the future when buying additional properties.

My point is you will not know if you qualify if you don't start asking - take action!

Ve'Ron, I am not seeing the entire picture here... what is the cost of obtaining these rentals? Can you pick a property out individually or whole package? Yearly expenses are great to know, but you need to also know the debt service. Does the 1%+ rule (guideline) apply, do you have management included; who takes are of the lawn - is that included? How is the overall maintenance of the properties?

The reason I am asking all these questions is to have a better understanding of the deal. I'm willing to bet that if these properties are in lower income areas, capital expenses were very low if not zero for years, and this in turn will catch up with you.

While talking to the owner ask him/her if they would be willing to do owner carry, or you could try a lease option both of which could be accomplished with no or little money down. Do your homework and ensure the numbers work, and if they do, then you will find a way to make the deal work!

Best of luck!

@Nicole A. I don't know the laws in Baltimore about providing water but here they don't require it.  On my duplex, I pay for the water and got very concerned when the water bill exceeded $200 per month on 3 bedroom 1.5 bath each side, so I took the approach to change all the toilets to low-flow toilets (which also helps to reduce toilet overflow problems) and ensure I had all leaks fixed.  

Once that happened, I then included a paragraph in my new lease that the tenants will receive a $100 water credit and if the bill exceeds $200 the the tenants will be responsible for half of the overage.  I do not provide any refund of this credit what so ever as this is part of rent.  

Then I noticed the water bill has been reduced to around $150 per month which encouraged each side to conserve water.  I am totally amazed that this technique worked and now I make more money per month on the property and it has paid for the toilets!

Additionally, I pay for the trash service (our city does not provide trash service).  The reason I do this is previously the trash pilled up outside and the property started to look run-down.  By providing this as part of the rent, it helps keep the place looking much nicer.  Other neighbor owners do not provide trash service and their properties look like dumps!  I do not provide the trash cans as these often get damaged or become missing, so the tenants can either provide them or use trash bags - so far it has worked just fine.

I hope this help and good luck!

PM or email with your list as I am always looking for new opportunities!

Hi @Thai Foo  I am not in the loan business, but I think that was under the original program.  But I think I remember reading that it changed with the revised HARP (V2) - either way worth checking into for sure! 

Maybe one of the loan gurus can help define the terms for us.

Hi @Brian Larson you are probably eligible for a HARP loan which by re-financing may get you into a better position; additionally by raising the rents you maybe able to get to a positive cash flow on the property.  Not sure what is entailed with the HARP loans, but heard they are favorable.

Since the current tenants have been there for 4 years, it is time to look at the overall profitability of the property in detail prior to dumping it.  Prices in the Phoenix area are on the rise and maybe it will take a longer period of time to recoup your money, but would look into doing a HARP - your lender can do this, but so can most lenders - time to shop around!

Option #2 is a good alternative, but you really need to get into a better position overall on the property no matter what path you take.

Good luck,

@George Skelton you are going to find that many people will recommend talking to a CPA or Lawyer about this, and it is not because we don't want to help, but more that each scenario is different based upon strategy, local and state laws, just to name a few.

I experience the same road blocks and trying to figure it all out and what it comes down to is there is no set blueprint to doing REI; once you embrace this logic the sooner you can more on to becoming wealthy. Spend the money and get yourself a good CPA that also invest in real estate - preferably one in your local market. They will help guide you and point you to a good real estate lawyer who can set it up properly - don't try and DIY it like I did because I used my personal name that would void the asset protection you are seeking.

I know that this didn't help you much, but as @Paul Timmins indicated a CPA is your best start at getting to where you want to go.  Best of luck and hope you have a successful future!

@Michaela G. You may have to form the association to be able to accomplish this as then everyone would need to pitch in for the cost and the electricity, etc.  This is going to be an undertaking, but it would be best to talk to the city planner and see if they can provide suggestions. 

Often times you may get the approval and if the gated community improves the neighborhood then a grant maybe provided to help with this effort.

Additionally, it sounds as if there is opportunity knocking and if you PM me with the information, we  can discuss more off-line.

Best of luck!