All Forum Posts by: Robert Leonard

TRUCE! @Jordan Cardwell

I'm not attacking you personally, but yes I am attacking your specific statement. My point is that words matter. The fact that you are an accountant, gives credibility to your statements, no matter what your level of experience in REI. I've made my point so I won't rehash it. I've made enough contributions here on BP that I think it's very clear I'm here to help other investors, no matter their level of experience.

Have I made mistakes, learned things the hard way and am I still doing that?  Yes. You never know it all.  The type of things that go wrong or I miss are small things that amount to a bump or a bruise and there are always the unknowables.  They are to be expected, and that's why I budget for waste and contingencies.  If some unforeseen major expense makes a deal unprofitable, my risk is spread across a portfolio of properties and at the end of the day, all of my eggs aren't in one basket.  If I didn't know what I was doing, I could easily break a leg or lose an arm.  That's the difference.

I'm here to help others learn and grow, so they spend less time learning things the hard way or taking what I see as unnecessary risk.  I'll be glad to help you too.  Sure there are some things that are most effectively learned by experience.  For the impressionable novice investor reading these posts, it's important that you understand how to manage/minimize your risks.

NOTE: ALL properties are in a flood zone.  Learn more here:  

https://www.floodsmart.gov/floodsmart/pages/about/...

@Shayla FletcherI check all properties at 

http://maps.lsuagcenter.com/floodmaps/ If the flood hazard areas show in blue, (or sometimes grey on old black/white maps) that is the effective map that is used to determine flood insurance rates and whether or not flood insurance is required by lenders.  If the area is in pink, it is a preliminary map that will  require flood insurance upon adoption, if it doesn't require it now.  I have one property that will not be in a flood hazard area when the new map becomes effective ~SEP 2016.  Whatever the case, these policies are a fully earned premium and you don't get a refund if you cancel the policy for any reason.

The rates for flood insurance are based on an elevation certificate for properties that require flood insurance.  A licensed surveyor is who you hire to provide the elevation certificate and around here they cost about $350 on average.  Once you have that, you can get quotes for coverage.  You may want to check to see if your local floodplain manager, each parish has one, keeps copies of elevation certificates.  If one was already performed on this property, you don't need to go and pay for a new one, you just need a copy of the one that's already available if you can get your hands on it?  If your current seller mortgaged the property, they probably had to provide an elevation certificate to their insurer.  That insurer may have a copy that you can use to determine the rates and save the cost of a new certificate.

Everything @Lynn McGeeinsaid is right.  I own a property where the structure is 1.3 feet above the base flood elevation, but the lender still requires flood insurance because part of the property is in a flood hazard area.  The policy was very low cost, just over $300/year, but I got nearly doubled by the $250 surcharge that just came out of the blue last December.  Flood insurance was supposed to go up on everyone last year, but congress kicked the can down the road and "fixed" it by giving owner occupants a $25 surcharge and businesses and non-O/O a $250 surcharge.  The change that was going to effect everyone was limited to a 15 or 25% annual increase to "gradually" increase the cost, but there was no such limited increase in this "fix" as you can see by my example.

I originally would never buy in flood hazard areas. Then I learned more about it and decided it was a manageable risk. But with the way FEMA and congress are monkeying around and changing the rules today, I think there is so much uncertainty about what they will do (and what it will cost), I am back to excluding properties in flood hazard areas from consideration for purchase.

When you say "the best way to get started is to go buy a property and figure it out" you offer no suggestion of ANY analysis until maybe after the purchase?  I'm looking to make this point clear to the novice investor who reads these posts and forms ideas of how to get started in this business.  It touches a nerve when I hear "jump in and and learn from your mistakes" or your own statement.  Those flippant statements are irresponsible.

Am I suggesting that you paralyze yourself with analysis? I'm saying there is a method to the madness and there are fundamental strategies to minimize the risk and they happen BEFORE you buy.  Analysis is necessary in making sound investment decisions and it is best applied before buying. 

How do you know when you are ready to start?  You'll know you are ready, when you know a good deal when you see one.

Well @Jordan Cardwell I have to say that if you read that "the best way to get started is to go buy a property and figure it out" I recommend you look up the recommended reading list. There are two kinds of risk. Careless risk and calculated risk. The better you get at calculating risk, the better investor you become. You never eliminate it, you just get better at identifying it and minimizing it with experience.  One of the most important strategies to minimize risk is to "make your money, when you buy."  The key to that is WHEN you buy, not after you buy.

When you put serious money on the line as a real estate investor, the most important thing to know is, do I have a good deal on my hands. A good deal always includes a margin for error/safety/profit, IMO.  A deal can go awry after you buy, but the best thing you can do to prevent that is in your decision to buy.

I have to say @Basit Siddiqi, "every[thing] is so damn expensive here!" is so damn funny, LOL!  Your accounting background will serve you well as an investor.  It's so important to understand the tax consequences of investment decisions.

1. Yes, but it's not the same as it used to be.  And there are a few ways to accomplish "no money down investing," that are too complex to put in a quick answer here.  Stick around and keep reading/listening, you'll get it.

2. I like diversification too, but you are thinking kind of like mutual fund type of diversification with a bunch of others having a shared interest in what you invest in. That can be very complicated and difficult to make work over the long term in REI. IMO, you want clear and simple roles of partners, like, PML, owner/investor, property manager, contractor, etc. When those lines cross, things get very complex and blurry but I prefer simplicity and clarity. So I like to have partners that take a specific role and don't share roles in deals.

3. First requirement to be eligible to apply is 3X rent in verifiable monthly income (anything else is not collectible) to be eligible to apply.   Beyond that, my one page application and I don't use credit scores but I do check for criminal and eviction records, which are dis-qualifiers.

Hello @Stuart Craig and welcome to BP!  If I don't get to meet you tomorrow night, I'm sure we'll meet soon.  See you around Lake Charles and around BP.

Hi @Jane Istre, I would like to hear more about what you are looking for and what you are trying to accomplish?  Feel free to call, message or email me any details.  Thanks.

Welcome to BP @Chris Lofstrom!  Hope to see you around BP and maybe around the Lafayette area.

Welcome to BP @Russell Bertrand!  Glad you found the site.  It's a great place to learn and network.

Feel free to reach out anytime you need help getting past any hurdles you come across.  I'm always glad to help when I can.  Hope to see you around BP and around Lafayette!

Glad to hear you organized something for CENLA! Where will it be?

@Sandra K Shirah, @Mark S.

Welcome to BP @Joe Marchetta! Glad you found the site and I look forward to your contributions to the group!  See you around.