All Forum Posts by: Randy E.

Shiloh, you've been very successful at REI and you're obviously very passionate about it. However, I would caution against taking this thread at face value: "Do not invest in RE if you have less than 20K"

The scenario you laid out is one possible scenario out of many possible scenarios.  Like most of us, you tend to base your personal common sense through the filter of your own life.  Others have different life experiences, different life skills, and different requirements for their own lives.  Not to mention, every market in America may not be like the markets in which you invest.

Yes, it is a great idea to have substantial reserves.  No, it is not a drop-dead requirement for every single investor in every single investment and/or life scenario.  Why stop at $20K?  Wouldn't it be better to have $30K in reserve?  or $100K?  Having less in reserves raises the risk, but it does not necessarily restrict anyone from entering the game.  Everyone has their own level of risk tolerance.  You may not wish to take the risk with less than $20K.  I may be willing to take the risk with $5K.  Someone may want to have $40K?

Good luck to you in your endeavors.

I agree with this totally!  I've handled every eviction myself and have never had a problem with the magistrates.  My leases follow the law to the letter of the law and beyond.  There are enough legal ways to protect my interests that I don't bother trying to get around the law.

 One of the early errors in this eviction was the unfair (according to NC law) late fees.  I often hear landlords saying how they charge extremely high late fees, and running recurrent late fees, and so on.  I tell every landlord who asks that I charge 5% and not a penny more.  That's the law in NC and that's what I stick to.  It's not worth it to try to make another $25-$100 when it can lead to this sort of problem.  Even if the delay was only one month.  I've never seen that issue cause this much grief, but now that I have, it is definitely a cautionary tale for everyone else.

After hearing about the second mistake in the lease, the OP should immediately review her lease and correct it.  Better yet, have a lawyer (not the Moe, Larry, and Curly trio who are handling this current case) review the lease and make it court-proof.

Antoinette, I'm sorry you are going through this, but IMO, you brought a lot of this on yourself.  It doesn't matter whether the illegal late fee was an honest mistake or an attempt to gouge, it was wrong.  Just like when the court tells the tenant it doesn't matter if they lost their job or their car broke down, unpaid rent is unpaid rent.  The legal knife cuts both ways and is equally sharp.

BTW, what county is this in?

 I'll be blunt, too.  It sounds like you are trying to deny a protected class.  Everyone here has been giving good advice, but you keep saying you have this special sauce decoder that lets you know when a tenant is not suitable for you. 

The bottom line is this is your property and you can rent it however you choose.  However, if you break housing laws, be prepared to one day answer for it.  Telling a judge that you denied someone with adequate credit, adequate income, and adequate everything else because you "did not like their kids" or that you didn't like "the way they look" is going to result in a fine.  Probably a hefty one.

@Tomiko Graves , I have a S8 in Greensboro.  I just had my 1-yr inspection and the house was approved with no problem.  When I put it into service with S8 a year ago, that inspection also went smoothly.  I have S8 in Durham as well, and while those inspections were okay, there were not as landlord friendly as Greensboro turned out to be.

As with anywhere, you have to be diligent in vetting your applicants. When I put my G'boro SFR on GoSection8, I received dozens of calls/emails, showed the house to approximately 25 applicants (usually in settings where I scheduled multiple showings in a 1-hour block) and took in about 15 applications. All in about 2 weeks. That's a lot, but it allows you to not accept just any tenant.

I ended up with a great tenant.  1 year in and no complaints with her.  Her kids have drawn on the walls a little and damaged the cheap blinds, but that doesn't bother me, and there has been no other damage.  Heck, my kids did the same thing when they were little.  I usually have to change blinds ($5 each) with most turnovers, and I can get a handyman to wash or paint the walls at turnover.  However, the tenant says she plans to be there for years and years, so I probably won't have to worry about that for a long time.  Meanwhile, I'll be collecting sweet and steady rent the entire time.

message me if you need anything else.

 James, who says the property is valued at $52K?  Are you looking at tax records?  On-line sites like Zillow?  The bank will not count either of those as a true valuation. 

Here is a brief look at the process.

James owns the house free and clear with no mortgage.

James approaches bank for loan on equity.

Bank checks James' credit score to make sure he is a good risk.

Bank insists on official appraisal to find out what the property is actually worth.

James has to pay for the appraisal BEFORE he knows if he will get the loan. This can be $300-$800 depending on where you live.

If everything so far checks out to the banks approval, the bank will loan you somewhere between 60% and 80% of the appraised value.  If you bought the house for $25K and the official appraised value is $48K, assume you will get a loan for 70% of $48K.  That is $33K.

One of the bumps you're likely to run into is that the house appraises for only $30K.  Appraisers base their estimate on what other houses have sold for in the neighborhood.  If three other similar houses have sold recently for $30K, there is no reason for the appraiser to value the house at $50K.

Another bump you're likely to discover, is that many lenders will not process mortgages for properties valued at less than $100K.  Some exist, but they may not be the easiest to find.

Also, the bank will insist you have insurance on the property before they loan on it.  They may require a higher quality insurance than you currently have, which will cost you more money.  Also, insurance companies will insist you have a tenant in the property before they provide their most reasonably-priced coverage.  

 Thanks Brian. 

Life has been crazy busy lately (single parent, helping son with college apps, etc, etc, etc) and I haven't been around BP much lately.  I feel like I need much more help from the experts here than I provide to others.

Good luck with your ventures!

I'm late to the party, but I would rather replace than repair old windows. 

I used to hire a handyman to do new window replacement jobs, but now I prefer to call in a specialized window-replacement company.  The skill level of handymen varies wildly, and in the end, I've found that I pay about the same price total for parts+labor.  So I might as well go with the company, because their workers do window replacements all day every day and I know they'll do it professionally and quick.  

I'm talking about windows for houses built in the 1920s-1960s, where I plan on replacing the entire window. 

If it's an older style window and it needs a pane replaced, I do that myself.  It's one of the few things I can do myself. :)

In NC there are two steps.  First, you evict.  Then you return to small claims court to sue for the money. 

As far as I know, NC does not garnish wages to repay money owned to a landlord.  As far as I know, once you win the judgement for money, it sits on the tenant's file and the state doesn't really do much to take the money from the tenant and pay you.  As far as I know, when the debtor has money owed to her from the state, sometimes that money might be redirected to those who have won small claims cases against her.

Personally, I would view the small claims victory more as a punishment against the debtor because it will show up on their background checks and whatnot.  I wouldn't bet on receiving any of that money any time soon.  Your best chance, in my eyes, is if the tenant tries to buy a house five years from now and the lending institution insists she clear up that judgement.  If she's a lifelong tenant, good luck.

I am not an attorney and this is only my opinion.  YMMV

@Austin Largusa, If I found a price that fit my budget, there is not one square inch in Durham that I would not buy.  I'm probably not the best person to ask this question to, because I see nothing but profit in all areas of Durham. 

I know many investors in other areas create neighborhood lists to avoid and pursue, but I'm not sure that holds in the Triangle right now.  It's a crazy good time and investing is all over the map.  Any neighborhood that investors were avoiding three years ago is probably an "it" neighborhood now.  

 NC is a large state with a wide variety of cities, towns, burgs, metro areas, and economic situations.  You have to narrow the question a bit to get a useful answer.

What area are you interested in? Are you looking to spend $40K or $4M? Are you looking for land or SFH or MF? Are you looking to B&H, wholesale, or seller finance? Would you prefer a property that requires a full-on rehab, or are you looking for something to clean, carpet, and paint only?