All Forum Posts by: Peter Sanchez

Congrats!  That's a lot of money to make on your first flip, but if you did most of the work yourself, then you deserve every penny!  

The before didn't look like much, but the after looks great.  The barn doors were a nice touch--very trendy.

@Mo Sheikh, the first one is always the hardest, but luckily the second one went a lot better for you.  Now you've got one in the win column, so just keep going and learing and profiting! 

I see a LOT of people asking questions about LLCs, Titles, Insurance etc that don't want to seek out a lawyer.  Here's a few resources to get you closer to the answer so that you can figure it out yourselves, or get close enough to the answer to ask a very specific question, which will cost less to answer than a very vague one.

Option 1:  Gilberts Law Summaries (contracts, real estate etc.).  These are study guides that are used by 1st and 2nd  year law students.  They are written for people who know a little bit about the law, but aren't lawyers (although law students believe they know everything).  These are light on case law, but heavy on rules.  They are only about $30 each.  The only drawback is that they are not state-specific.  Sometimes it will tell you what the answer is, but sometimes it will say "in most states the rule is X, but some states, the rule is Y."  Then you can figure out which rule your state follows.  You can find these on Amazon, or if you live near a law school, the student book store has lots of these.

Option 2:  "Horn Books" .  Also arranged by subject, these are green, hardcover books that actual lawyers use.  They are like the Gilberts, but longer and with more case law that you can cite or use a jumping off point for legal research. Also available online.

Option 3: Bar Review Prep Books.  Bar-Bri, the bar review company gives review books for people who sign up for the bar review prep courses.  They have outlines by subject (Torts, Contracts etc.) and practice questions.  Unlike the above 2 options, they are state-specific, so you can get the NY version or the Texas version and get answers that apply to you specifically.  You can find them used on eBay, but the drawback is that they are a set and they usually go for $500+ used on eBay (you can't buy them directly).

I wish I could put into words what a terrible idea it is to rent to family.  My mom decided to rent to my idiot cousin because he has 3 kids and felt sorry for him.  I don't think there has been a month that he hasn't paid rent late.  If it were up to me, I would've evicted him a loooong time ago. 

If want to get the feeling of what it's like to rent to family, without actually doing it.  Then for the next year, just go to the refridgerator on the first of every month, open it, put your head inside, and just slam it repeatedly.  

Do you win buy winning?  Or by not losing?  

Or, what can a scientist and tennis teach you about real estate? 

Many of you run a credit check when you rent to a tenant.  And you use one of three credit agencies, Equifax, TransUnion or TRW.  A brilliant man named Sy Ramo was the "R" in TRW. If you google him, you will see that before he started TRW, he was head of the team at GE that created their electron microscope.  And before that, he worked in aerospace and is considered the father of the intercontinental ballistic missile.  In other words, he was a bright guy.

Sy wrote books on things that interested him, like science, management and...TENNIS!  He looked at Tennis like a scientist  and discovered that club tennis (amateur) is different from professional tennis.  In Pro Tennis, 80% of the time you have to do something right to score a point.  In amateur tennis, 80% of the time you "score" when the other person makes a mistake (hits the net on a serve, hits the ball out of bounds etc.).  Therefore, if you are are trying to win at club tennis, you shouldn't try to ace that serve or hit that killer backhand.  Your strategy should just be to get it over the net and keep getting it over the net so that your opponent has more chances to make a mistake.  

A mistake I made when buying the house I currently live in (which I gutted and renovated), is that I used a pro-strategy when I should've used the amateur strategy. Instead of trying to do everything right by renovating a fixer-upper, it would've been a lot easier to buy something that was already done and just not make any mistakes (do preventative maintenance, keep the house painted neutral colors etc.) and just wait a few years for the market to do its work. 

As I contemplate selling now, I realize that I made it harder than I needed it to be.  There is more money in fixer uppers for a pro, but it's a lot of work for an amateur and I could've gotten a pretty decent return by doing it the easier way. (or as my wrestling coach used to say "you don't get extra points for doing it the hard way")

So I think on my next piece of real estate that I buy for living in, I will play amateur tennis. Living in a house that you are fixing up is different from fixing up a flip that you aren't living in, and there is a lot to be said for having hobbies that don't include trips to Home Depot. 

Not sure if a R/E license will be much help.  If you are really committed to this, have you thought about working for a property management company for a few months?  I read a book by Norm Brodsky (Street Smarts) and he said when he quit practicing law to become an entrepreneur he worked several jobs on the ground floor (including a car wash!) to decide if he wanted to go into that business.  (he eventually started a document storage business and sold it for $100million+ ). 

You might also go to some CLE classes on Real Estate.  If you are going to own a multifamily property, you will need a good attorney sooner or later when a problem comes up with a tenant. 

@cedric there are two kinds of augers (most people call them plumbing snakes).

One looks like a pistol with a jug on the end (the wire is inside the jug). That one is used for unclogging the pipes, but it's not great for a toilet b/c it will scratch the porcelain.

The second kind looks like a broomhandle with the coil coming out of one end, and a crank handle on the other end. This is the one you want. The part that goes in the toilet has a rubber coating on it so that you don't chip the porcelain when you are working it.

Good luck

You get a lower interest rate with a 15 year loan, but the payments are higher (because of the shorter time frame) so you have crunch the numbers and see if you can afford the 15.

You can also do a hybrid approach. If you take a 30 and find you have extra money that you don't need to make repairs or buy other properties, you can pay down the 30 year quicker. One additional payment a year on the 30 year mtge (reducing the principal) will reduce the payoff time to 15 years. If you end up needing the money, you don't have to make the additional payment.

There isn't one "right" answer. It depends on your level of risk tolerance. I like to have money on hand for emergencies and if my checking account goes below $20k it starts to bother me. Warren Buffett says he doesn't like to have less than $20 billion in cash on hand.

Also, if you did the 15 year with higher payments, and something did go wrong with the property, would you have another source of funds that you could tap into?

"To the other point you brought up, Romex is NOT the reason your breaker is tripping. More likely your breaker is overloaded. AC units draw a bunch of current, especially when they start up. If you really mean the "main" breaker is tripping, then you really do have a problem. You may need a panel upgrade and that will cost at least $2,000. "

Yes, this was my thought too. Are you sure the price quoted was for running wire and not a "heavy up" to upgrade your panel?

As mentioned, Romex outside won't cause the breaker to trip. It's not up to code because outside stuff is supposed to be in that round metal tubing (forgot what it's called) so that it doesn't get exposed to the elements or eaten by mice.

If the breaker is tripping, the HVAC is on a line with other things (either because the installed didn't know what they were doing, or because the panel box had no room for it).

Unless the homeowner installed it himself, s/he may not have know that it was done incorrectly. It's definitely something the inspector should have spotted though. good luck