All Forum Posts by: Lucas Thomas

Quote from @Samantha Springs:

BP! I have had the back unit of the duplex I just purchased to house hack listed for almost a month. I have had some showings but no applications until today. The applicant has no verifiable income (he is an artist and woodworker), but has basically zero debt and an excellent credit score (almost 800). He has lived at his current place for over 5 years and I have asked for his bank statements and will check his references. He says he is getting a regular job in Q2 of this year, but who knows. 

He told me of his situation during the tour and he is willing to pay several months of rent in advance. The home will be for him and his pre-teen child. Thoughts? Run for the hills? Wait for another applicant? 

Hello!

Did you do a full Application?

How much is the rent versus old rent ?

Why are they moving?

Did you do a background and credit check? Where did you get the credit score from?

What's the laws for month-to-month tenancy in your state? What's the laws on accepting Advanced Rent? (These can be really tricky)

Did you call the former landlord and actually get a hold of them? Are they real and not a fake person?

Where is the money coming from? Ask for bank statements, etc.. Everyone has a verifiable income! You just have to get it from them.

Do they have a co-signer that you can go after if they don't pay up?

I ask all these questions as it's important to know if you have a FULL Application that you can make real decisions off of.

If you are stumped by any of my questions, you need go back and look at your application and get those answers.

Thank you!

L. Thomas

Quote from @Lorien Rollins:

Quote from @Lucas Thomas:

Quote from @Lorien Rollins:

I am looking for new ways to market my SFH rental in Denver NC. I'd like to stay away from bandit signage. Does anyone have any helpful hints? I have it listed on 5 websites (free) with tracking numbers (that sometimes ring through to my phone). Fence was installed in December. TYIA!

Well, Bandit signs work great! If you feel like the neighborhood is too sketch for them, put an extra car in the driveway so people think its occupied. Or have a radio with a talk show on in the kitchen. Put up blinds or curtains in every window.

Otherwise, it's the usual suspects:

Craigslist, Facebook Marketplace, pay for Zillow listings ($35 but it works), Apartments.com, etc.

The only other way to get it even further out there is to have it listed with a real estate agent which is what I normally do.

L. Thomas

 The neighborhood is great and I've decided to place bandit signs next week - hopefully they'll help! The home is currently occupied, I'm attempting to backfill and have little vacancy once they move out. Those are great ideas and suggestions for a vacant home though!! Do people still use craigslist? I didn't realize! I'll post more on FB too, I joined a few new groups. Thank you!!

 Yes!

It has a lot of users still. 

And I meant Facebook Marketplace, they have a classifieds like section now that you can list rentals, sell mobile homes, etc. 

Quote from @Vince Le:

Why do I see some independent mortgage loan officers submit borrower's application directly to lender without going thru their employer/broker's loan processing?

Will the MLO get the full compensation for themself by doing so, and is it illegal?

Hello!

This is an answer I have with my very limited knowledge of the subject, but hopefully it helps.

Florida has a lot of issues with processors as they are required to go through a rigorous process. So some MLOs will process their loans, themselves, as they can't find a processor to do it for them. Some MLOs like to process their own loans, but they aren't compensated for it and it's actually cheaper to the borrower if they do.

The lack of processors is a Florida-only thing from my limited experience.

Hope this helps.

L. Thomas

Quote from @Nadia Brown:

As a first-time property buyer, I'm taking a big leap into real estate investing and could really use your collective wisdom. I've got my eye on a property in Jacksonville, Florida, and I'm trying to gauge if it's a smart investment.

The deal:

• Asking Price: $102,000
• Type: 3-bedroom, 2-bathroom home
• Unique Aspect: Currently rented out in separate units
• Rental Income: $1,600 per month
• Net Profit Post-Expenses: Approx. $1,200 per month

I'm at that crucial point where everything seems a bit overwhelming. Assessing this deal has become unexpectedly challenging, yet I'm eager to dive into real estate. I'm hoping to gather insights from those who've walked this path before.

Does this deal seem reasonable for a first-time investor like me? Perhaps there are aspects I haven't considered yet?

Any advice, tips, or personal experiences you could share would be immensely appreciated. Your guidance could be the beacon I need to navigate these uncharted waters :) 

Thank you in advance for your time and insights!

Hello!

I specialize in the Buy N Hold sector of real estate a real estate agent, mortgage broker, and financial planner.

And it sounds like a good deal based on the 1% rule, that for every 10k in purchase price, you get 1% or 1 dollar in rent in return. For example, 102k times 1% is $1020. So as long as you get 1020 in rent a month, you have won.

The biggest thing is to do due diligence like with anything. Make sure the bones are good such as electrical, plumbing, roof, HVAC, foundation, etc.

I don't like the sound of the separate units thing. I'd verify what rent is in case the "individual rentals" thing doesn't work out.

Start looking for your Contractor Stable and property managers as backups and sources of information.

If you do all that, you should be good!

L. Thomas

Quote from @Sean Dye:

I have almost completed my RE class and I am about to take my classroom exam. When is a good time to look for a broker to work with. Also what brokers are very competent to teach aspiring agents and what should I look for in a broker when I begin my search?

I know the RE world is tough to make money right now and I am here for it, I care more about learning everything I can then making as much money as I can. I know when I become an expert the money will follow, I am actually fully prepared to make no money my first year (though I will work my *** off to get my first deals). What can I expect my first year with a broker? My second year?

Hello!

I've been a real estate agent for a decade. I specialize with working with Landlords.

You need to start looking immediately as each broker has their own unique commission split system. And if that is important, it takes a while to root through them all.

The biggest thing for me was commission split when I started as most brokers aren't going to teach you much of anything and are really only a resource for advice before you make dumb mistakes. So I worked with a 100% commission broker who only charges a flat fee. This might not be available in your state so that's why you have to start your search now.

Once you figure out the payment schemes, next you have to see what kind of resources they have to help you. 80% of real estate agents fail or only make like 40k a year so you have to avoid those people and only focus on finding a niche. Try to find the one with the most resources such as people who are in the niche you want.

The Niche is the most important decision you can make as an agent. Because each niche has different methods and techniques to build your client base. For example, I only work with Landlords/Investors and social media is a useless outlet for connecting with those people. I instead, teach seminars and classes on real estate investing which is how I get 99% of my clients. However that strategy is worthless for getting retail clients as they don't care about real estate investing and only care about buying and selling.

Another example is if you want to do property management as most brokers won't touch property management with a 10-foot pole. So you have to review if they have the niches you want to grow in. As I required my broker to have a property management division which eliminated like 75% of the broker houses for me.

So figure out your niche and potential niches and find the broker with the best resources and support for those

L. Thomas

Quote from @Lorien Rollins:

I am looking for new ways to market my SFH rental in Denver NC. I'd like to stay away from bandit signage. Does anyone have any helpful hints? I have it listed on 5 websites (free) with tracking numbers (that sometimes ring through to my phone). Fence was installed in December. TYIA!

Well, Bandit signs work great! If you feel like the neighborhood is too sketch for them, put an extra car in the driveway so people think its occupied. Or have a radio with a talk show on in the kitchen. Put up blinds or curtains in every window.

Otherwise, it's the usual suspects:

Craigslist, Facebook Marketplace, pay for Zillow listings ($35 but it works), Apartments.com, etc.

The only other way to get it even further out there is to have it listed with a real estate agent which is what I normally do.

L. Thomas

Quote from @Jessica DiPonziano:

Hey all, I am about to put my house up for as a rental but I am still living in it, however I would like to get pictures & a listing up to hopefully start finding renters or at least see if there's interest.

Can anyone recommend a website that I could potentially stage furniture with existing furniture but be able to add like a light on a night stand and remove person items?

The ones I found realtors use just put a whole new room in and I don't want to do that as I don't have that exact furniture or know where you could even buy the matching furniture.

I want to try and line up renters before moving out so I have minimal lag time.

Hello!

Just put in the listing that the property is staged using a software program and is unfurnished on live-in or the furniture is different than pictured.

As long as you disclose that, people will understand, and shouldn't be an issue.

L. Thomas

Quote from @Derek Bell:

I have a dilemma. I have a 14 acre property. I bought it a few years ago. Two buildings came along with the sale. The buildings take up about 3 acres, leaving me about 11 acres. I am building 2 additional buildings on the spare land. Currently have a note on everything with a killer 2.8% rate. Loan will balloon in about 3 years. If I get a construction loan to build my two buildings the old note will have to be paid off leaving me with a higher rate. I have a few scenarios I see:

1) just chalk it up to the cost of doing business

2) there are three parcels. Both current buildings are parceled off with the third parcel being the remaining land. Sell just the buildings and keep the land. I have added so much to the annual NOI that I could probably sell the buildings at a good price so that I get the land for almost nothing.

Any further thoughts or suggestions would be appreciated. 

 Cost of doing business.

Well a 3 year note is a 3 year note.

If you get better terms such as a longer note as you have to refi in the next 2 anyway. The interest is kind of meaningless on such a short note. And the land isn't "useful" without the building and the value will go up dramatically with the building.

The interest rate is moot with what detail you have given.

L.Thomas

Hello!

I've bought houses that are 120 years old to houses that are 1 year old. The older ones, just need more due diligence, but still make perfect sense.

As some people were complaining about old houses, it sounds like they didn't do proper due diligence because if you don't check the plumbing with a scope, then its your own fault for not verifying the plumbing with a scope. HAHA

Basically here is what you do for any house older than 20-30 years. 

The building materials are usually very similar in the decades they were built and try to learn the mishaps of those materials as some materials can literally be fine for 75 years and just one day, collapse. (Here's looking at you Orangeburg Pipe...)

1900-1940 = Knob and tube wiring, Plaster, cast iron/ clay pipes, etc. 

Do your due diligence, but most of this stuff doesn't last and is updated way before your buying it today. 

1940-1970s - Orangeburg Pipe, Fuses, Aluminum Wiring, Galvanized pipes, etc. - These are the years you have to worry about the most as many of these materials are coming to the end-of-their life as your purchasing today. 

1980s - 2000s - PVC pipe, copper plumbing/wiring, slabs, etc. - these are more standard material today, and are more plentiful and are sometimes easier to replace as construction got better. - I'm not actually a fan of the newer builds as everything isn't built to last and a burst pipe, strong weather, meth-head who sells copper, etc. can do catastrophic damage more easily. Some of my older homes are brick and cinderblock, and their built to last! 

This isn't even close to a comprehensive list, but the point is that you need to learn the pitfalls of each building based on the year it was built and do the due diligence so you don't buy a lemon. 

But here is your deal-killers: 

1. Foundations - these are your #1 deal killer. There is no cheap way to fix a bad foundation. I've never fixed one as I've never let myself buy one with a bad foundation. ha-ha

2. Overall Condition - Is the property have so much little work that it just won't work? Does it need gutted due to fire or water damage? etc.?

3. Roof - these aren't as important as you might think when buying as usually insurance pays for them during weather events. But if the insurance won't insure without a new roof, deal-killer. 

4. HVAC - does it have the proper HVAC systems for the area? HVAC is really expensive nowadays and it doesn't make sense to buy something that is going to have HVAC issues right off the bat. 

5. Plumbing - does the plumbing require major renovations? 

6. Wiring - Does the house need rewired? 

That is all I can think of right now. 

Hopefully this helps. 

L. Thomas

Quote from @Lucy Bennet:

@Lucas Thomas Thanks! That makes tons of sense and just the info I was looking for! I'm self employed as a house flipper and don't have a normal set salary to work with so I'll give this some thought based on what I'll think projected income will be. Thanks again.

 In general,  capital gains tax is almost always lower than income tax unless it's a short-term capital gains.  But even then, if you make any amount of money,  capital gains will still probably be lower. Plus your commission will push your annual income up so you be using up portions of your lower tax brackets. 

Id most likely take no commission unless you make "Negative Money" with your writeoffs. 

Hopefully this helps you think and verify with your CPA when he gets back in town.