All Forum Posts by: Randy White

Id highly recommend listening to the BP Podcasts.  They are awesome to listen to and lots of great info.  I typically try and analyze multiple deals every week not only to try and find a good one but to learn what a good deal looks like prior to making any moves.  I've read the BP books also, @Brandon Turner did an awesome job really breaking down topics that us newbies can relate to.  My biggest tip would be to set up your finances first, pre approval from a bank and have your funds available....I missed an awesome deal a few months ago because I wasn't completely ready.  I'm still kicking myself too.  Beings as you are from Washington, I'd recommend looking into the Washington Landlords Association.  Its cheap to become a member and has a ton of premade forms for all types of contracts. Good luck with starting your investing and if I can help you let me know!

Randy

Thanks and good luck to you! If I can help you out at all let me know! 

https://www.biggerpockets.com/calculators/shared/414714/2731f9c4-21af-4625-9291-4700009d9899

Acquiring the first property went pretty well actually. I did do a ton of looking around and wasn't rushing into it too much. I had a little bit of money burning a hole in my pocket, but didn't want to get into a bad deal. I was only looking at foreclosures and short sales on the MLS as I am not a realtor and don't have access to the good stuff. I just about to meet my realtor and the house I had eventually bought was lowered 20k that morning. It really didn't need much work at all. The bones were good, little lawn work, paint throughout, and I replaced a scalloped finish on a beam with stained wood and wrapped it. That alone made a huge difference and was cheap. I got a loan for 10% down for 30 yrs. Then spent about $4000 on make-up, fixing the water heater, light fixtures, kitchen cabinet hardware, closet doors, and a few other small line items. I attached a link to my report so you can see how the numbers worked out. The rehab took longer than I expected. We closed on the house during hunting season so that's just bad timing and I'm not going to miss hunting season haha! It did rent very quickly. I used craigslist.com and ahrn.com for advertising. Overall it went pretty smooth. I have awesome cash flow, very low maintenance as it is a very simple house, and I don't use the cash flow to augment my income. It is simply just boiling in its own bank account and stacking up. Soon i'll be doing double payments on the note to try and pay it off quickly, then i'll start going on vacation for free!

Hmmm, with a high or unfavorable debt to income ratio, its going to be tough to work past that.  What is you next project you are working towards? flip, buy&hold? you may consider private money as another option or seek out a partner with cash. 

have you done the property analysis with the calculators? I highly recommend it, makes it easy to see where all your money is going.  Just based off the little info here, cash flow is better than no cash flow.  If a fan breaks on your California place, where is the money going to come from to replace it?  If it breaks in the Arizona property, you'll have cash reserves to pay for it.  Just my two cents!  good luck

Randy

Hello Joseph,

You may be able to look into a Home equity line of credit (HELOC). That gives you the opportunity to have a significant amount of "cash" available for a purchase but not pay on it immediately. Just like a credit card really. You don't pay on the availability of the funds, just what you use when you use it! Try a smaller bank too, not a big box bank...they suck! Good luck!

Randy

Congrats on figuring out what your plan is! I went through the same situation and ended up at the same spot as you.  Buy and hold SF for the time....next move for me is going to be a MF.  I bought a foreclosure as my first investment house and put a few thousand into it.  Its been rented for just over a year now and im going through switching out tenants right now actually.  Ive found that if you can automate as much as possible as soon as possible it makes the process soooooo much easier.  My wife and I were discussing options for rent collection.  We thought about doing the post office box and mailed checks.  It seemed like the simplest way to go about it.  Then I was told about Erentpayment.com.  Super awesome and I know there are a bunch of other internet related websites that collect rent.  Automating payments with direct withdraw and deposit was amazing.  I highly recommend it!  Good luck with launching your investments!

Randy

Hey Jason!

Yes tax season is awesome with investment properties.  Talking with my CPA, there are pros and cons to the tax write offs.  Pros, for buy and hold investing I am able to write off the property value 1/27.5 of the value.  so immediately its a nice little chunk of change and you get to benefit from the cash flow on top of that...seems weird to me but I don't write the rules.  A Con to the writing off of properties is when you go to sell the place.  From what I've learned, you would be paying capital gains not only on the profit margins but also on the depreciated value.  As it was explained to me, buy at 100k, sell at 150k. I'd pay capital gains on the 50k.  If I depreciate the house on taxes, over X amount of years, I may be paying capital gains on the depreciated gap from 100k.  But, im a buy and hold guy so I'm writing it off! then 1031 it to another place in the future!  Where are you investing or planning to invest? 

Randy

for rental collection I use and highly recommend ErentPayment.com.  Its all direct deposit and it can also manage late fees, deposits, even returns if necessary.  They only charge $3 per transaction.  As far as advertising, I am a craigslist guy.  never had any trouble with that! 

Randy