All Forum Posts by: Nate Worcester

My test for if a neighborhood is too "bad": would I be comfortable sending my wife there at night?

If the answer is no, I don't even consider it.

I also prefer to invest in middle class working neighborhoods. In my area, this equates to houses where the ARV is around 100k and the rents are around $1,000/mo.

I don't have any out-of-state rentals but if I did, I would have to have a partner whom I trust to manage the project for me. I wouldn't want to coordinate with contractors, lenders, agents, and everyone else involved in a deal if I were thousands of miles away. Maybe that's just me.

I only have 1 rental property right now (second one is under contract) but here is how my system is set up:

1 operating account for each property where all of the bills are paid from and where I keep the maintenance money I have reserved for the property.
1 retained earnings account where all of the profit is transfered.
1 high interest savings account where I put my monthly contributions from my job and where i store my money between deals.

So far this system has worked for me but as I said, i only have 1 property. I don't escrow my taxes and insurance so I really should create another savings account where I transfer that money. Right now, I don't keep a separate account for vacancies because my monthly contributions can pay all the bills for my one rental. I will probably do this in the future as I get more.

Paying off the mortgage has a ROI of your mortgage interest rate. With rates so low, I'm positive that you can make a better return by buying another property instead. But it all depends on your strategy. I know people who plan to retire on 7-8 free and clear houses. Personally, I'm dreaming a little bigger but having a plan is miles ahead of no plan at all.

Welcome from a fellow Texan! Houston is a great market to be in (as i'm sure you already know). Best of luck with your future endeavors.

Honestly, what he is asking for is precisely what I would ask for if I were in his situation. And if I were in your situation, I probably wouldn't accept it outright, either.

If you don't want to pay the full 6k, then you need to negotiate. He is the one who wants out so he should be willing to make you an offer.

In your partnership agreement, did you have any provisions for when the partnership would end naturally? As in, after 5 years or when you sell the deal?

If he wants out early and you don't want to sell, then he should be the one making you an offer for his half of the deal. You said you are happy with your ROI so you could at the very least pay him half of the down payment. If there is any equity, this is where it could get tricky but again, he is the one who wants out so he should be willing to negotiate on this.

Welcome to BP! Congrats on taking the first steps!

Dallas is a great market to you are in luck!

I think that too many people have pets for you to completely disallow them.

We have a list of dog breeds which we do not allow for insurance purposes. We also have a weight limit for dogs. We charge a refundable pet deposit plus $20/mo pet rent which is nonrefundable.

Personally, I'm not very handy and I have a full-time job so hiring a GC makes the most sense for me and I would recommend it to anyone in a similar situation.