All Forum Posts by: Ron Flatt

I do have a rule that no one is able to rent from one family in my little town.  I broke this rule 2 years ago.  I knew the family was in the drug trade, but this one individual seemed to really break the mold.  He was a hard worker and had started a new business.  Then MURPHY'S Law hit,  I do not think he was dealing but his property became more cluttered, had a lot more traffic than it should and was late 12 times in 18 months.  We eventually was able to get evicted.  

Set your rules for finding tenants, find the best tenants but remember the apple does not fall far from the tree.  

Just a thought:   

1st - you make your money going in, not going out.  (you collect it as you exit)  So First off Buy Right.

2nd- The only thing for sure is that circumstances will change, It appears that you have life by the horns and you have a great amount of cash to put in to real estate.  What I am saying is that you may pick up more than one in some years and some years you may have to hold on. 

3rd- If you are buying  great deals, with 70% loans you should not get in trouble.  Even without appreciation, the balances will be slowly inching downward, which raises your equity.  

If you keep your property properly maintained, keep some reserves for CapEx you should be fine. Since you are not needing the cash flow for living, I would bank it for the next purchase and for unforeseen expense.

I notice a lot of individuals on here use a 90-95% occupancy on their deal sheets.  I have over 90% occupancy, probably closer to the 95% but when I am purchasing, I use an 80% occupancy.  It builds cushion into my deal, (just a thought as you examine your next purchase.)

I believe you said you were a newbie.  If it were me in your shoes, I would:

I would stay active here on BP, go to some local meetups and watch who is doing deals, listen, and ask questions.

After you have found a few folks that you think you would be comfortable working with, see if they would be interested in a JV. (Caution do not jump into a partnership just because they talk a good game, check them out, see their projects etc.) They would provide the credit score and experience, you would be providing up front cash.

The key here is having a good exit strategy, going into the deal.  A house hack on a good duplex, triplex, fourplex.  As units are vacated you can refurbish.  You would be in one unit.  After a while, you could either buyout the partner, let them buy you out or sell it.  

I like to make sure that the money is "Honored".  Example you put up $100K, for downpayment and materials.  When settlement is finalized, of course the all note payoffs and selling expenses would be deducted then, your investment + an agreed upon interest rate, then profits would be split as prearranged.  

Just a thought, but it gets your foot in the door, and you have someone you can learn from and make money too.  

Again, Vet who you will be doing business with, line up responsibilities and HAVE AN EXIT STRATEGY.  

I would be interested in the mobile homes spaces.  If you could either private message me who you passed it off to.  Depending on location, I could be a buyer.  Thanks

Looks like the buyer, had an out and took it. I do not see a way to keep EMD.

I have made offers with a contingency that I would need to gain entrance and inspect the house.  After a walk through, I have decided to rescind offer or lower my offer.  

Look at this as a learning experience and move on. Release the EMD and continue showing. If the house is priced right it will sell.

My mobile home flips have usually been down and quick.  I paid cash for them and then rehabbed and owner financed them.  It is hard to find lenders for MHs.  

Interest rates were at a premium but was still a better deal for them than renting.  

Depending on your state.  

First I drive by the outside of properties.  (if it looks vacant, I may look in the windows), if someone is in the yard, I may stop and talk to them, to let them know it was going to auction.  If it is a renter, they may be surprised, I have been invited in because I let them know if I get the house, I like to keep tenants

Second  I go to the courthouse, looking for liens and judgements against property.  

Depends on your area,  and the month.  In my area, sometimes there is a bunch of people and no buyers and other times there was only two of us, and we both wanted the property.  

The key is find your number and do not get caught up in the auction hype.  Quit when you reach your number.  

I have found fewer buyers in the months of November and December.  

If the realtor showed the property, he is going to be entitled to his commission, IMO.  

If the realtor is being slow and there is another realtor involved, you can write an offer on just a plain paper or find an old contract and fill in the areas.  

My daughter had a realtor told her that she did not have time to make an offer on an REO, because she was offering such a low ball offer. Of course my daughter was upset and called Dad.

I called a local realtor, he submitted the offer and my daughter owns the home.  Yes we had to jump through some other hoops, but you can get around a slow agent.  

Next time find a different agent.  

If you find the owner on your appraisal site or where ever, you can also send directly to owner.  

When possible I will deal directly with owners and make my own offers.

I agree with @Chris Mason.  

If you run your numbers, stick with them.  Do not get in the bidding war.  

I wanted a MF in my home town, but they could not come to my numbers, it sold to someone else.

The key is, I would not have felt comfortable jumping in at a higher number.  Yes, after a complete rehab, it would work on a slim deal.  If something came up, it would be an "alligator" (a property that you have to feed every month).  

If a property does not give me a cash flow, or will give me cash flow at my predicted time I will pass.  

There is other deals, just check back a few weeks or months later.  

Owner is selling property.  they generally will downplay the amount to rehab.  I am not saying this is not a good deal, but you have no way of knowing until you walk the property and put a pencil to the real needs.   

I generally put everything I find down, and add 10%.  Something always is hidden that you did not find.  The 10% cushion seems to always vanish.  

Good luck