All Forum Posts by: Patrick Daniel

It really comes down to what your goal is for the home. If you have a duplex where one side covers the mortgage, then that would mean you are living for free, minus utilities. That will leave that amount more each month for you to save and lead to more investments. 

Be sure you are thinking of your exit strategy when you purchase the home. Do you want to but a flip that you can sell after a couple of years or do you want to hold the duplex for a while? Have you thought about a 4plex that you can rent out 3 units and live in one? You can get residential mortgages on up to 4 units.

Best of luck!

@Sara Taslitt Older properties can pose a problem if they were not maintained well, but they can also provide the charm that some newer properties won't. 

I would set financial parameters based on what you want your COC return, ROE, and monthly cash flow to be.

There are ways to control for CAPex in older properties, it is just more time-consuming. Find a good inspector that is trusted by professionals in your area and get a good pulse on the effective life of your big ticket items (Roof, HVAC, HW heater, etc.) and calculate out how much each will cost to replace, then do the math backwards for what you need to put aside for CAPex and maintenance. 

Also, for older homes, do not forget the likely extra expenses for electricity/gas due to them being leaky. 

It all comes down to knowing your numbers and what you want in your investment. 

Best of luck!

I would go with subway tile. Classic and timeless. Easy to clean if you use a good grout sealer, and lasts if it is installed right.

If you look at the MICRO of the real estate, deal by deal, then yes, if there is more than one offer, there is a winner and a loser. 

However, if I have learned anything from bigger pockets and life and general, the end goal is anything but MICRO. The goal is achieving success at the MACRO level. 

If I send out 1000 mailers and get 2 deals out of it, some would say that I failed 998 times, but I found 2 deals for $500. That is a huge win. If I can string that together month after month, I will be a failure 11,976 times a year, and a winner 24 times a year. I will take those numbers either way. 

In the Macro, no one has to fail for me to win and vise versa. 

@John Woodrich is spot on. The numbers baloon alot unless its sweat equity. 

Have you read J. Scott's books on flipping houses? It made me realize and think of things I have never thought of before. Probably saved me $20k in missed flip items.

I think it comes down to doing good business Vs. doing bad business. If that is a policy that is legal and the LL is willing to lose tenants because they want to enforce it, then that is their decision. However, I am of the opinion that I would give my tenants a heads up or the chance to fix the issue before hand. 

Bottom line, if it is in the lease (and the lease is appropriate/legal) than its fair game, but what you can do and what you should do are not always the same. 

Best of luck!

Hi Ryan,

Thats great that you found a potential deal! If it is indeed a great deal, then there are a few ways you can fund the rehab.

1. Hard Money (The flip I am currently working on, we used a Hard Money loan for the purchase of the home and the renovation)

2. Some contractors will allow you to finance your renovation projects through them.

3. Partnership. (If you can fund the purchase of the home, maybe you can find a partner to front the cost of the renovation and split the profits.

A few things to think about:

If it is truly a real fixer upper, then conventional funding may be hard to get. Also, it is great that you love the house, but make sure you are loving it for the right reason (That it is a good investment) and not that you can make it look awesome. My wife and I fell in love with our first flip and made very little off it because we were more interested the aesthetics than the finances. 

Best of luck and let us know how we can help!

P.s. What is ARV and estimated rehab?

Patrick

The PM company required the prospective tenants to view the apartment before we would process an application. They were allowed to have a trusted person view the place for them if they gave authorization in writing. As @Cat R. said, it can open up a lot of opportunities for unnecessary issues. 

Your locality will state which rules specifically you have to follow, but if someone applies but does not fit your criteria (So long as your criteria doesn't discriminate against protected groups), then you do not have to rent to them. If two people apply and both "qualify" but the second person has a better rental history and more income, then the second person is more qualified and you can rent to them as you want so long as you can defend your reasoning.

That is going to depend entirely on your locality. In my local area, real estate does not require a local business license. Call your local city/county and they will set you straight.

When I worked in PM (Washington State), lease read that rent was due on the first and considered late after the 5th. They would be charged $10 per day retroactive from the first. So if they went past the 5th, they had a $50 late fee. 

I would consult an attorney, as others have said and make sure you are covering your bases.