All Forum Posts by: Natalie Schanne

Patti Robertson - When you get a 5 year commercial loan with a 20 year amortization, how do you save your cash flowing assets that can make the monthly mortgage payment if the market falls 30%, like from 2005-2009? When you need a new loan to pay off the 5 year balloon, your properties will appraise for 70% of the original price and the banks, having experienced defaults and losses, probably aren't feeling generous about 75% LTVs on that. What's your backup strategy when that happens? Are you forced to sell at or near a loss, even though you can pay the monthly debt but not the balloon?

Brad Pietrzak Daria B. - If you want to rent individual rooms, create a rental agreement for that room with joint and several liability for common area damage. Mine is 4 pages. I rent rooms and try to get 1 year leases. I charge +50/mo more for 6 mo or +$100/mo more for month to month. I offer basic furnishings. To move in, I require upfront first month's rent 799/mo + $100 utilities + 799 security deposit. Anyone who can't come up with $1700 isn't a tenant I want. The tenants usually show the house and interview the next tenant/roommate. I get $3000/mo by dividing it instead of $2000 for the whole house. This way is slightly more work because each tenant moves out every 6-18 months, instead of a family staying for 5+ years. Overall there's always monthly cash flow covering the mortgage.

William Dickey - If you want to be a real estate investor with a license, you have various fees any brokerage will charge you. 1. Errors and omissions (E&O) 2. Any office / technology fees In exchange you'll get X% commission. Decide how much business you think you'll do and how many resources you need. At Remax you might pay $1000/mo but keep 97% of any commission check. At Keller Williams you pay roughly $60-80/mo and keep roughly 64% until you reach a cap. At a mom and pop 'Puget Sound Realty,' you might pay less than $500-1000/year to hang your license with them and keep 50-70%. The more you buy/sell, the higher % you keep, depending on your contract with your broker. You're probably best off at a small local firm where you can pay minimal fees, get access to MLS and basic supervision, and aren't required to pay $600/year to local/state/national association of realtors (NAR). If you go with a bigger firm, they will require you to join NAR. Bigger firms can also limit your ability to offer Property Management services for other investors. This may be a useful stream of revenue for you. (You're always able to do things on your own properties as an owner-licensee.)

William Dickey - You have two choices

Jared Cruz - you're doing all the right things with your police report, etc. 1. Email photos and police report. Request the repairs promptly in writing for your family's safety. (Email and letter). Ask for a timeline for repairs. If it's not a security threat to you, say this happened and you don't care if it's replaced now, but this is documented so you will fight any damages coming out of your sec dep. Your landlord probably doesn't want to replace it before he has to. 2. Do not lapse on your rent. Anyone telling you not to pay is telling you to violate your lease and to get evicted / lose your security deposit. 3. Try to get a direct number where you can get yes/no authorization to make repairs and withhold it from the next rent check with receipt. Some landlords are ok with that.

Rose M. - you can do it!!! As a broker you know lots of people who have made money on their real estate. Take some to lunch and ask for advice. If you're personally renting, the best way to build wealth is to house hack. Buy a duplex and rent half. Buy a larger single family and rent out rooms to nice people you choose and you screen. They pay your mortgage. You're investing. Win.

@Francis Rusnak - I see the benefit to outsourcing phone answering or basic qualification questions. (Do you own this house alone? Do you have a mortgage?)

WHY would you outsource the on site meeting with the homeowner and evaluation of the house? Unless he's a superstar (unproven), you'll just be burning your qualified leads with someone who can't answer all the questions or give that I'll buy your house now for cash commitment. 

There's a reason why they send a low paid guy around to knock on doors to ask if you want to schedule an appointment to meet with a roof / hvac guy. Then they send a good looking trained Salesperson to get you to sign the $10-15k contract that night (and usually give a deposit). Then you never see him again - the guy who made you all the verbal promises about their 30 year warranty. Then they have other low paid roofers / Hvac guys come do the installation a few days later.

Josh Barnett - if your goal is to choose an order to where you want to ask to live: There are great investment deals to be had in any market. Big shot RE investors will choose target markets based on local job growth, job stability and ease of constructing supply. (The more land there is to build equivalent housing, the lower house prices will stay.) You can also get (census.gov) data on median income, population growth, unemployment rates, and building permits. Check on crime rates and schools. Look on Zillow (map) to ballpark assess home values and prices starting with each base as your nexus. You'll see that in each area you can buy different amounts of housing for your money. Check craigslist and/or local base boards for housing rental prices in that area. (What could it rent for vs what did it cost to buy? If you paid $600k but can only rent for $3000, that's usually a pretty bad deal. If you paid $100k and can rent it later for 1500-2000, that's a good deal.) For quality of life, you probably want to limit your investigation to within a 20 minute commute of your workplace.

Josh Barnett - You're thinking too far ahead. As soon as you get your definite orders to X area, reach out to 2-5 real estate agents (different companies) in your new home area. Schedule a 15 min call. Tell us you're moving to the area and you'd like to start receiving property information on houses in your price range. Ask for advice on neighborhoods, schools and commuting. Ask about recent appreciation - where are the most desired areas? Where are sellers often getting multiple offers? If you're considering house hacking, ask them to also send you 2-4 unit multifamily listings (duplex+) or large 3+ br 2+ ba homes if you'd rent out spare rooms. ACT uninformed on the first call (regardless of if you just got off a call with a different agent) and ask lots of questions. Learn. Also call USAA or other mortgage lender to get preapproved for a mortgage before you call the agent, so you know your budget. See how helpful the person is and how they interact with you while you're remote. I met some agents who would do video tours for overseas buyers who were ready to make offers. You could buy the house before you arrive (depending on your risk tolerance). Then watch your emails and identify properties you like. You'll get a sense of price and value in different neighborhoods. 200k buys you a 1 br 1 ba condo here but a 3 br 2 ba house here. Engage with the agents intermittently without wasting our time unnecessarily if you have questions about a property or the transaction process. Try to engage with investors and investor friendly agents in your target area. Ask where they invest. The best deals are usually the ugly houses that need 30-60 days of renovation work before you'd want to move in. After you find some properties you may want, pick the most helpful agent to tour you through several properties and send in the purchase offer. With financing, you'll close 30-45 days later and get keys. Do not buy a property without checking market comps. Do not buy a property that hasn't been inspected by someone you trust. In my area, investors seeking high returns tend not to buy in the A class areas with great schools. (Homeowners pay too much for homes here... so they can have high appreciation returns but not 'cash flow'). Savvy Investors never require appreciation (home price increasing) to make their investment work. The best deals (high ROI) are usually on the periphery of the excellent / high price areas. Good luck. Let us know how it goes.

Ryan B. - Peter Mckernan has given some great advice. Is there a satisfactory interim fix? Assuming you've fixed the leak and dried it out... spray the walls with your choice of chemical like chlorox. Can you clean the kitchen wall and put the dishwasher in place and leave as is until June? (Google mold remediation.) Otherwise, Tell the tenant you're ready to fully repair the issue asap and ask when you can schedule it. Try to outline expectations - you think it'll be x days and the dishwasher will have a makeshift hookup or whatever. Or you have to plastic x area due to the dust and they can't access it. Ask - Are they going out of town any weekend? If the tenant indicates they can't live there anymore due to mold, then it's probably best to work out a mutual time for them to be released from the lease. People can have respiratory problems from exposure to mold. (It is POSSIBLE that they should have seen something and notified you sooner as per your lease. I charged some tenants for an under kitchen sink leak (wet where the garbage bags are kept so they opened regularly and should have known) that wasn't reported for months that damaged the supporting cabinets and cracked the granite countertop. I require tenants to notify me asap for any leaks/water damage.) I also had a pretty bad (couple hour) leak from a master bedroom shower (the twist handle exploded off the wall leaving an open pipe and we had to turn off the main water line.) First plumber said we had to replace all the drywall, etc. on the ceiling under the shower at a total cost of over $1000. It dried out. I didn't replace anything except the shower handle and piping for about $300 with a DIFFERENT guy. But that wasn't a persistent water problem resulting in colorful growth.