All Forum Posts by: Don Daniels

Tell them you going to expect the eviction notice. Rent in full plus late fee on Friday will stop the filing. Rent is due on or before the 1st. On the 2nd eviction process begins

@LaRaye Alderman my thoughts on some of your questions:

Do I need to have a website on my business cards to look professional to lenders?

Do I need to have my business cards available to do business with lenders so that they will know I am serious?

Not sure the exact context but I work with hard money lenders and don't have any business cards

Does the contractor decide on the price of the and renovations?

You decide on the price based on your budget and the nature of the renovations you're looking to include. Remember there is a difference between renovations you would put in your personal home vs investment. If the work item doesn't raise rents or property value then don't spend the money.  You provide the scope of work to the contractor based on your inspection and based on the things you would like to have done. Look for three GCs that will itemize and split time and materials in the repair estimates so that you can easily compare across contractors.

Is the price for rehabbing the property included for the contractor or is that a separate price?

You'll be able to distinguish the contractor fees from the cost of materials if you follow my suggestion above. A general contractor will charge an hourly rate for his sub contractors and add a 10% or so fee on top of the total. As you gain experience can save this fee if you want to run your own project.

Where is the best place to seek out a contractor?

Join a REIA to get reputable contractors in your area

Do you tell the Real Estate Agent that you are a new investor and you are looking for x properties in y area or do I just tell them I am a real estate investor looking to invest in properties.

Be honest. Its ok to tell them you're looking for your first property - everyone has to start somewhere and if they don't like that move on to the next realtor. Also, when you're new you can ask all the questions you like :)

@Thomas Nance, I would file the eviction notice asap to stop the bleeding. I file an eviction notice the morning the rent is late. If/when the payment comes in I discontinue and accept the late fee. For me, this is a business and if folks aren't going to pay I need them out. As a landlord, I am extremely kind, responsive, etc.. but firm. That way I don't end up running a charity :)

@Paul Nguyen If you have the money you might consider going straight to rental real estate vs wholesaling first. Much of the risk is mitigated by an appraisal, inspection, and three contractor bids during due diligence. With that, you can feel fairly confident that you're not buying a property that has unknown faults. Wholesaling is not for the faint at heart!

Hi Michael, When purchasing an occupied property the new buyer assumes the existing lease. You'll want to get a hold of that before buying to see what the terms / conditions are of the current occupancy. Except for odd circumstances you're obliged to the current rent until the lease is up. Keep in mind that you'll owe the security deposit back as well - may want to get that from the seller as a part of the purchase. You'll want to raise the rent annually to match current market rates.

@John Don't do it. They don't even make enough money to cover the rent! This is guaranteed to be a headache in a few months or less.

@Derek Massad, All things being equal, I would favor two single family properties over a duplex where I'm able to pick them up for the same amount down. Given the choice, I'd prefer not to live next to my tenant. Also, it sounds as though duplexes are somewhat limited in your area as well reducing your options. You might run some numbers to determine where you stand to net the most income (i.e. gross rents higher for the SFR vs the duplex, cost of insurance, property tax, HOA)

Derek, It would be helpful to know how much you are able to save and how much single families cost vs duplexes in your area

Hi Donald, Your net worth is the sum of all assets and liabilities. That should include all properties (rental and primary alike), motor vehicles, cash, mutual funds, 401k, etc..

Hi Bryan, My first property was a 3/2/2 Single Family for $120k. ARV is $177k. I underestimated the rehab and put in an extra $10k for a total $40k out of my pocket. It was hard-money deal. All in all captured $10k equity and net cash flow is $750/mo. If you're doing conventional financing you'll need 20% of the ARV in cash + 6months of mortgage payments in savings to make the bank happy. If you're adding value and using hard/private money you can get away with less out of pocket due to the equity capture.