All Forum Posts by: Ron Flatt

I would be careful  on partial rehabs.  One of my best deals was from a new investor, who started something he could not finish and the lender gave him 30 days to pay up.  

He wanted a partner, but he had a poor work ethic and drinking problem and I refused.  

2 weeks later he decided to sell to me, which was a little rough raising cash, but I did not need him.  The other problem I found after I closed it, was some of his fixes were wrong and had to be tore and redone.  

Keep looking for the right property, you will find it.  Do not rush it.  You may find someone who has started something they cannot finish, you can pick yourself up a bargain.

Most folks on here have given great advice.  I have one other suggestion.  Keep one card that you pay you use still, and make sure you pay off anything you charge on it plus the min. payment.  

The rest of the cards cut up, but do not call and cancel.  Since you are not in physical possession of the card you will not use it.  The balance is dropping, but if you call and cancel the card it will put a ding on the your credit.  

My information is a combination of Dave Ramsey and Dave Wingate.  Dave Ramsey has a great thought ideas about consumer debt.  I personally am doing the same, but I do believe that not all debt is bad.  Debt that is used to invest in an asset, especially if it is debt that is being reduced by someone else's cash (rentals) is great.  I highly recommend reading "Your broke because you want to be" by Larry Wingate (available on audio also) and almost anything by Dave Ramsey, (he also has a radio show).  

Good luck, stick with your plan and work the plan.  

If i can shed a little light here.  My mother kept foster children for a number of years.  I also was a teacher at a school where we had several foster families.  

Not meaning to be disparaging, but the kids did seem more destructive that than others.  Not all, but a higher than usual percentage.  If I had a better qualified tenant, I would definitely pick an equally qualified tenant offer a foster family.  

just my opinion

Looks like you have a great handle on things, but also are adverse to risk, (which is a good thing.)  Personally, I would probably try package the two older homes and get a 75% loan, with that you would have cash available if a bargain comes up.  5 properties should give you the same net each month, but you have 5 properties also being paid off.  

You have received lots of advice, and I can see the advantage of each of them.  My brother-in-law will only buy for cash.  I do buy for cash at Auctions and Tax Sales, but when I can I do refinance to pull my cash back out, unless I am owner financing them.  

In the end you know your risk tolerance, Do not over leverage, stick to numbers that work for you.  I figure a 20% vacancy rate and for the last 10 years I have never had a year less than 95% occupancy.  Use numbers that work for you and your buying philosophy.  The more doors I have, the less a vacancy hurts.  When I only had one rental and it went vacant, I was scrambling to make the mortgage from the family account.  Now if one is vacant, the others have all the mortgages paid.  

I admire Dave Ramsey and his view on debt.  I just disagree that all debt is bad.  A car, a credit card that is not paid off monthly etc.  Debt on income producing assets are different in my opinion.  I want more doors that will cushion a vacancy and my tenants are paying for each door for me.

Welcome to BP.  I am an hour south of DFW.  Cannot help much on the referral side, but if you decide to ease a little farther south. Give me a shout.  

Again Welcome to BP

I gave them a 3 month notice when I purchased property, (they were on a month to month.  At end of 3 months they signed a 1 year lease and have renewed each year.  I give them 2 months notice of what rent will be going up to.  That gives them time sign the new lease if they agree or to find a new property to rent.  

I had one who was not going to sign.  I started taking applications for the rental in July.  

Welcome to the site.  Look at some properties, run the numbers, ask questions on here,  decide where you want to start.  Lots of folks on here that will give you advice.  Feel free to hit any of us up with questions.  If you have a group close by, it is great.  

First off, remember this is a business.  I do not know the rules in New Jersey, but in Texas, at the end of the lease, I would increase the rent at least 10% and let tenant know we would be going up each year, until it became more in line with the market.  I may not take it all, and if there is some thing that they can do, that I pay someone else to do, I may let them do that to supplement their income to pay the rent.  

Example:  I have a tenant that I inherited.  His rent was $250 a month for garage apartment.  I increased it to $300 at beginning of year and then to $335 and now he is @ $370.  However, I was paying for a yard service on 3 properties, he had a lawn mower and I sold him a weed eater.  The market for that property is currently around $425, so it will go up in January to $400.  That will be probably it, unless property rents skyrocket.  

@Ryan Anderson.  The property was in my name, loan was on me.  After the bank loan was secured,  I filed a second for him, to protect his interest.  

He received quarterly reports, showing payments made, repairs charged and management fees.   

The main reason we sold, he was going to upgrade autos and I had planned on using him again on another property. Unfortunately, he passed away shortly after our JV had ended. I was glad that we had finished it up, because his children are still bickering over his belongings. I address my demise in JV but had not considered the other property. I know I need to make that part of the next JV.

Yes, we split everything, after all expenses.  We deducted the loan, his investment and his interest, my management fees and all repairs that had been done.  Rents had been accruing slowly over the period of time.  

When we put it on the market, I told him that I would buy it at a certain price which would have gave him a good return, but we were able to sell it for more.  

Hope that answered your questions.  Feel free to continue to question.

still negotiating but it will be between 18.5 and 21K purchase, repair cost for rental 15K to flip 20K. ARV $60K. Rental $650