All Forum Posts by: Peter Giardini

At the risk of the being the sole contrarian I will have to disagree.

With our economy still in troubled times to purchase anything that would only "break-even" or go negative is a very risky position to be in. And, while "equity" is great... unless it can be tapped and used for further investing it seems to me that it is worthless. Am... I am a return on equity investor.

If the monthly cashflow goes seriously negative do you have the reserves to cover the outflow from your person life? And, if things do go south (tenant turnover, damage, maintenance) how willing will you be to fund things when the cashflow is definitely negative.

The question I would be asking first and foremost is this...

Why is the seller willing to sell at this price and carry the loan... I would a large sum of money that the only who will make out in this deal is the seller!

Your call and best of luck!

Pete

Kevin,

Welcome to BP... you already know what a great place this is...

Best of luck in Vegas.

Pete

Following the EPA guidelines are the best approach in most areas. Regrettably Maryland is not one of those areas.

Almost every rental renovation is now being certified as lead free which requires pre and post renovation testing.

One bit of knowledge that has emerged through all of the lead testing (with the special spectrograph) is that lead paint will most likely show up on the walls of the kitchens and baths, all of the trim, some doors, stair stringer (the part exposed inside the house) stair spindals and banisters.

Also, lead paint has been outlawed for many years and I am told it use in paint was stopped at least as late as 1961. So... unless you own properties that were prior to 1961 the chances of a property have extensive lead paint dimishes with each past 1961.

Pete

Greg...

Welcome aboard... and be sure the seek guidance and advice from Bigger Pockets.

Great stuff and it's free.

Pete

Rich,

WOW... what's not to like about that deal?

I just got back from touring the oil patch in North Dakota, via the Bigger Pockets conference, and investory, absorbtion rates, and price points all support every builders dream.

Entire developments are getting sold out in 6 months or less and raw land (farm land in ND) selling in excess of $25K an acre. Crazy times for sure.

But as Bruce Norris suggested... it is all about timing.

Great meeting you and your lovely wife Janet at the conference and I look forward to many more discussions in the near future.

pete

Sorry to hear of your problems... Aren't tenants fun?

Everything starts with your lease and your move-in process as suggested the above posts.

While you may not be able to escape the expense of this situation make sure your lease and move-in processes protect from this situation in the future.

Best of luck!

Pete

Jeff,

Based on the way your question is asked and how many responses were focused on the residential aspects of borrowing... I would go the same route as Bill Gulley suggested... learn to do this business (buy and hold... and the financing associated with it) using commerical lending sources. Commerical lenders will do "blanket" loans rolling several properties into one note. Great stuff.

Also, I would strongly urge you to consider an acquistion strategic that includes purchasing with hard or private money and then refinance out with permenant commercial loans. Just be sure to keep your all in costs below the percentage that the ultimate lender will be willing to lend.

Once you have the relationship(s) established with commerical banks your life will become very predictable.

Best of luck!

Pete

Ed,

Congratulations on building your business to the point where this step is required.

The biggest issue you will experience with someone taking on these tasks will be ensuring that they know what their job is, what processes and procedures you want them to follow (you do have processes and procedures... right?), their level of responsibility and authority and the biggest one is can they be trusted (have they been trained) to deal with your tenants in a way that you and your interests are always represented in the most positive light.

There is a book out titled The E-Myth Revisited by Michael Gerber that addresses the issue of expanding a business from just the original founder and doing it successfully. You are at that point in your businesss I hope you will get this book and read it. Great stuff.

Best of luck!

Pete

Michael,

Welcome to Bigger Pockets... if it can't get answered here it probably isn't an issue worth dealing with!

I noticed that while everyone was warning you about high taxes and how they eat through you cash-flow no mentioned for you to be equally careful of condos or anything that has a HOA attached to it.

HOA fees can kill cash-flow with brutal results.

Bottom line... make sure your purchase price will support the cash-flow you need given the high operational costs you are sure to experience.

Best of luck!

Pete

I have a pretty simple philosophy that has guided me extremely well over the years.

If vendors supporting my business are not 100% on my agenda.... then they must be on their's and in very short order they will not be working me.

In this example... if an agent presented this suggestion to me I would ended the relationship on the spot. This agent is not looking out for Lynn's best interest only theirs.

Agents like this do not deserve our business!

Pete