All Forum Posts by: Loretta A. Steele

Jeff, your first sentence states that you are "having a hard time saying yes on." There is a part of you that knows that this is a very risky undertaking. Possibly financing a loan, uncertain pricing a year from now and tenants with credit problems is asking a lot for you to invest in.

The house that your tenants picked out, would you have purchased this short sale if they were not involved? Or was it only because they liked the house?

What is your tenant's FICO Score? Can they really clean their credit in a year? What if they change their minds about the house or the arrangement? What if housing prices drop in a year? What are the true repairs and maintenance costs on this short sale house? Are you willing to tie up your money financing this house?

The big question is, why are you willing to consider this plan? What about it makes it possibly? Just from what you have stated, this is not a good investment.

Welcome to BP, this is a great place for information, education and networking. As a follow southern Californian, best wishes.

So sorry to hear about your problems with that tenant. K. Marie and Joel have make some very good comments and suggestions.

Your property now has a mold issue and you need to enter the unit and address this problem. Mold is a health issue and counts as an emergency, therefore as the owner you have the right to correct the problem.

Just commenting on your issue, I am not an attorney and can not give you legal advice.

Joe is on target about buyers agents in the commercial side of real estate. There is a lot of research involved in representing a buyer for an apartment transaction. That is not to say that agents do not work as buyers agents. This usually happens when there is an existing relationship that has been cultivated between the investor and the agent. Commercial real estate involves continual relationship building much more than residential.

BiggerPockets is a great environment for learning, researching and building relationships. Will, I don't know if your are new to BP or not. Your questions might get more responses with an updated profile. A full name, type of investor, clearer location than just a state and public vs. private profile would help. That's just my suggestion.

There's many brokers in the LA area. I don't have a recommendation, my focus is parts of Riverside County. As Joe has suggested check loopnet, costar, etc. or contact a few brokerages. You might have to go it alone at first, but as you build your portfolio also begin to build relationships with a brokerage. A good agent is worth their commission.

A new job, that explains it.

A good tenant is worth keeping, I would agree with Jerry and Kyle to change the due date.

However, could their be another side to this story?

Prior to tenancy, she knew her employer used direct deposit and she could not guarantee payment on the first of each month. Was she upfront with you regarding the direct deposit issue before signing the rental agreement? Why did she wait until two months into the tenancy to bring this up?

Something to think about the next time a tenant wants to change the contracted due date.

2005 Chev Uplander van, paid free and clear, I love not having a car payment. And it only has 30,000 miles on it.

You and Ophelia are both right about the little green houses in Monopoly used to acquire the red hotels.

Also go to the "BiggerPockets Blogs", there is an interview between Joshua and Michael Zuber, a California investor. Michael talks about the importance of green houses.

The Gross Rent Multiplier or GRM seems to show up in "pro form", sales materials. And it is widely used, therefore people will still state its value. If you are considering a property for investment, the GRM alone is not giving much information, if any at all, in my opinon. That being said, what is a GRM of zero?

Let's say a newly built property is valued at $1,000,000, with no tenants for an entire year.

GRM = property value / annual gross scheduled income

Using our example above:
GRM = 1,000,000 / 0 = 0

Newly built and no tenants for a year. Would this be a great investment, if this were the only information you are given?

Let's look at this in another way. The GRM is a mathematical formula, property value divided annual gross scheduled income.

Division by zero is a mathematical operation that is not allowed, you will get a "division by zero" error on most calculators. You can understand why if you think about how division and multiplication are related.

12 divided by 6 is 2 because
6 times 2 is 12

12 divided by 0 is x would mean that
0 times x = 12

But no value would work for x because 0 times any number is 0. So division by zero doesn't work.

So mathematically, a GRM = 0 does not make sense.

While I was writing this post, Financexaminer give an excellent answer in relation to a MLS.

One hour and 12 minutes, you know the material.

You passed, no problem, now go pass that state exam.