All Forum Posts by: Matthew Mucker

Tony,

Thank you for sharing hard numbers with the forum. That really helps us newbies put things into perspective. I have two questions:

1) How many times are you mailing the same owner on the same property?

2) How are you producing the letters? Handwritten? Laser printer with colored toner? Outsourcing?

Thanks again for sharing!

-Matthew

I'm in the process of drafting my first-ever lease.

I'm in TX, and am using the standard TREC lease form.

I was wondering what y'all charge for late fees.. or rather, I'm looking for guidance on what I should charge for late fees. Any input is appreciated.

The house that I am rehabbing for rental has a garbage disposal in it that's not working. When I turn on the switch, it hums loudly but nothing else.

Should I repair, replace, or simply remove the garbage disposal?

I recently purchased my first investment SFH. (Hooray!)

The house has lots of equity but will be marginal on cash flow. My plan is to rent the house for a year and then sell it. I want to capture that equity and reduce my tax liability, and that year will get me some good landlording experience.

Here in the Dallas area, our soils tend to expand and contract as moisture changes, so foundation problems are quite common. This house had some major foundation issues, which I had repaired last week.

The question I now face is: should I paint the interior of the home or not?

There's ample evidence of where the drywall had cracked and/or started pulling apart at the seams due to the foundation movement. (Now that the foundation has been fixed, these cracks have closed up, but it's still easy to see where they were.) In addition, the interior is a hideous shade of yellow that's so pale your eye can't really tell at first if you're looking at a yellow wall or a white wall. The walls really are kind of an eyesore right now.

In addition, nice paint might bump up the value of the house a little when I go to refi in six months.

On the other hand, I don't know how sensitive prospective tenants will be to these issues. The house is otherwise a very attractive house. If tenants aren't going to care about the wall color, it may be worth it for me to defer this cost. I also realize that tenants aren't known for taking care of property.

I know I'm going to want to paint the house before I try to sell it.

So... do I paint now, or wait until I'm ready to sell and paint later? I'll do the work myself (with some help from family) and plan on using a taupe color that should hide minor scuffs and smudges.

What I've heard lately is that they're not likely to take anything off the asking price just because it's a cash offer.

Whether it's cash or financing from the buyer's perspective, at the closing table it's all cash from the seller's perspective.

You can, of course, direct where your IRA will invest. And I believe an LLC or Corporation can be formed for the benefit of the IRA's investments, buy why bother? You already have no personal liability for your IRA's invesments.

There's lots of information on the Internet on this topic; do a Google search and you'll find plenty of answers to this question, many of which cite chapter and verse of the Internal Revenue Code.

I am interested in learning more about using wrap mortgages and subject to/seller financing in my investing.

Can anyone point me to a good resource on the topic?

Getting a property under contract, and then selling that contract to a third party, is known as 'wholesaling' in the investor's lexicon. The wholesaler charges a fee to the third party for bringing a neatly packaged deal to the table.

'Flipping' generally means buying a property in need of repairs, adding value to the property by doing repairs or other work, and then re-selling the property as quickly as possible for a profit from the added value.

The double close you mention can be part of a wholesaling transaction. If I get a property under contract in my name, then find someone else to sell it to, the double closing allows me to take ownership and then immediately sell the property. Many wholesalers write a contract in their name "and/or assigns" and just assign the contract to the third party, which eliminates the need for the double closing.

Your girlfriend's scenario sounds like a wholesaling deal. If you get the contract in her name "and/or assigns," she can assign the contract to a third party.

Whether or not this is illegal has been a matter of debate. Technically, in most states, this probably is illegal given a strict reading of the law. (Standard IANAL disclaimer.) In practice, however, I'm not aware of anyone who's been in trouble for wholesaling properties. I'll defer to the more experienced folks on this board to add their wisdom to the issue.

Your questions about why anyone would pay a middle man are valid questions. Your job as the middle man is to add value to the transaction. If your involvement means the investor doesn't need to spend time or money chasing down the deal, he could be willing to pay you for eliminating those inconveniences. Finding good wholesale deals takes time. Many investors would make more money investing their time in other pursuits; so they're willing to pay someone to do the legwork.

(Having said all that... I'm a newbie here, too. This is my understanding of the landscape as I've digested things.)

Let's ask Donald Trump. Or Warren Buffet.

My personal thoughts? Yes, it can be done. It's been said, "becoming wealthy is no great feat, if becoming wealthy is one's only goal."

Building a personal nest egg of $1B will probably require a great deal of personal sacrifice in other areas of your life.

But that's just my opinion. I've never been a billionaire, so what do I know.