All Forum Posts by: Robert Leonard

Let's see, the seller's title company is offering a break on fees that will probably amount to a few hundred dollars.  Versus, the lender, who is no doubt bringing the lion's share of the funds to the table that allow your client to buy the property?  Without regard to the legality of the matter - it seems like a no-brainer, to me, whose preference matters in this scenario. 

How many deals will your client do with this seller?  Are the seller and title company major players in your market or something?  How many deals will your client do with this bank - would they like to do more?  Based on what I know at this point, the expression, "stepping over dollars, to pick up pennies" comes to mind.

Here's my desktop analysis: $55k gross rent, if you pay water, sewer, that drives rule of thumb expenses to ~60%, or $33000. That leaves $22k estimated NOI. If you give up one unit to create a laundry facility, that instantly costs you $6876/yr (1 yr lost rent) before you add the cost of plumbing&electrical expenses that will require. I don't know what the income will be from the laundry facility, but it comes with a whole set of costs (water/electricity), maintenance, security requirements that will all be yours. I'll bet there's somewhere people are washing their clothes now. And all of this before we even think about any deferred maintenance? I'm not seeing anything compelling about this property to pursue it at this point.

Coincidentally, @Jason Duet, I was in Watson today looking at a property.  I'll let you know if I make a deal on it and it becomes available as a wholesale or maybe a listing referral.  First time I've ever been there.  Funny how these things happen!

Welcome to BP @Jason Duet!  My home is in Lafayette, but I'm doing some business/deals here in the Baton Rouge market.  Look forward to getting to know and working with you!

Welcome to BP @Gerald Jarreau!  Keeping your condo as a rental isn't a bad idea, but I'll give you a few things to think about that may help you make a well-informed decision.

1. Have you lived in the condo for more than 2 years?  If so, any gains you make from the sale are TAX FREE!  There aren't many other ways to make money that you can do whatever you want with now or in the future that are tax free.

2. Does your HOA allow rentals? 2 points to consider - do they allow them and is their a limit? Sometimes not more than a certain percentage are allowed to be rented. You can find that out in the by laws of the association. Be aware that the association can change the rules "in the middle of the game," so to speak, by changing whether or not they allow how many or any rentals.

3. The education required to become licensed will help you learn about the legal aspects of buying and selling real estate. That is all good to know. I call my license my "key to the city" - because I have access to any listed property in the MLS with the only limitation being the requirement to schedule property visits through the centralized showing service. If there's any way you can swing a live course, I always prefer those. You will hear that the real estate business is a relationship business and I can give countless examples of how that's proven true in my experience. You can start establishing some relationships if you can take that and any CE courses as live classes. You can work around your job as an agent, but it takes a lot of time and effort to be good at being a realtor.

You can learn about investing from reading good books and listening to good podcasts on the subject. I recommend you look up "The RING"/Baton Rouge REIA to start making some connections and learning as you go along side the regular group of active investors you'll find there.

Offer a nice place at a fair price. Look at your competition of similar properties make sure your price is right. Take good pictures with all the lights on and drapes/shades open so everything is well lit. Post your advertising where internet savvy renters shop for housing (usually craigslist and Postlets.com). Screen like a professional. Require at least 3X rent in verifiable monthly income as minimum eligibility requirement to apply. Check employment, rental and criminal histories. Don't buy any secret income stories, like "I really make $XXXX but I only show $XXX because of _______!" If they have secret income, it's either made up or not collectible. Take the time to find a well qualified person. If you get in a rush to fill your vacancy, you will probably take more risk on your tenant. Stay disciplined in your screening criteria and if your price is right, you'll find a good one!

Welcome to BP @Chad Hrapmann!

1st off, if it were a conventional loan, you would be putting down 20%, but with a loan program, FHA, HUD, etc. backed loan, you can buy with 5-10% down payment. Those programs require you to live in the property for a year as your primary residence. You can use it for your purpose as long as you live there a year before you move out and use the property as a rental.

1. Use the loan programs in accordance with their rules first.  Get advice from your legal and tax counsel on the best entity (if you need one) to hold title to the property in.  It's not hard at all to transfer title to a property, ask your legal counsel how due on sale clauses work.

2.  See your tax adviser.  Income and assets of each individual drive tax related decisions.

3.  I think you are referring to LA's homestead exemption?  If so, it only applies to the first $75k of value of your primary residence and there's no loophole to use it on a rental property or more than one property.

Not my area of expertise @Clint Galliano but this podcast will help if you haven't listened to it yet:  https://www.biggerpockets.com/renewsblog/2014/06/1...

Hi Jennifer Martinez , I'm looking at this on my iPhone and I can't see or open the attachment. I'm up so far past my bedtime I'm here trolling on BP after I had to have my cup of coffee that I made just before my normal 5PM cutoff for drinking coffee. My first concern is that you are underestimating your transaction costs. That typically adds up to about 10% of ARV for both entry & exit costs combined. That's right at 30k for your 285k property. Just under 3k sq ft isn't enormous, but that's a lot of house and money goes fast on bigger houses. It's easy to overspend on any house, the bigger the house, the faster that will happen. Hope there's plenty of contingency funds in your repair estimate? What's the condition of the pool? Hopefully it's currently operational and you know everything's working? That can be a wild X factor.

I recommend those of you in/ or interested-in the Shreveport/Bossier market connect with @Michael Faulk who organizes a meetup group in that area.  They meet on a monthly basis, the last I heard. Best of luck getting started!