All Forum Posts by: Roger Vi

I agree with most here, just eat the $1000 cost. It is a cheap lesson to learn in the big picture.

Depending on how you look at $5500 over 30 years, it might as well be chump change. If all you had to do was change a light bulb to get it, then it's money in the bank. If you have to refinance your mortgage for it, it's chump change. I'm pretty sure I paid $5500 to close my last refi. I would self manage right now if you feel you have the time and expertise for it. Some numbers will never work unless you self manage, and this is especially true for your first few properties. Once you build economies of scale, then it can make more sense to hire a manager. Before I decide to do anything, I would recalculate my expenses on these properties. Are you accounting for all capex? Future vacancies? Property tax hikes? At the end of the day, the number will tell you if it's a liability or an income producing asset. If you need appreciation to make the numbers work, you're gambling. It it is producing income, next ask if it is worth your time and effort now? In 5/10/30 years?

I feel like there's a lot of assumptions and outdated statements being made on these replies... With that said, here's my 2 cents... SOLAR POWER IS IN STYLE! It might not guarantee you can raise your rent, but I can almost guarantee it won't lower it. A younger demographic would be attracted to housing with solar. Like many others have posted, you can already see this in Seattle. There is no reason for a young, green minded professional to avoid solar; it's got a great reputation so far. The only cons of solar we hear are from the people paying the cost for the panels. Tenants will never have to do that. 25 minutes north of Seattle is my home base, Everett. The majority of people here are Boeing, Navy, or hospital people; not very tech. East of Broadway in North Everett is what many investors and residents consider "the rough part of town." Yet, I drive by a 4plex everyday that has solar panels installed. I noticed them being installed about two years ago. Whether it is a good investment, I have no idea. The fact is there are people doing it in a part of my neighborhood where people (landlords specifically) are not known to splurge on amenities. Most homes in this neighborhood are 100+ years old. The majority of subsidized housing is in this neighborhood also. PUD has been actively marketing their solar panel incentives in this area the last 6-9 months. It has been on my to do list to find out exactly what I would qualify for. However, like most other landlords here, I do not put it very high on my list of priorities and I've never made the call. This post has me thinking though. As soon as the PUD office opens I am going to give them a call and report back with all the info they give me. I should have info on local rebates, federal tax credits, and net metering. I'm also sending out an open invitation to anyone on BP to find out what incentives your local power companies and to calculate an actual ROI (if any) for installing solar. Just please stop repeating yesterday's news on tomorrow's technology, the world is moving faster than ever and those who can't keep up will simply be left behind!

No problem @Cody May ! 

Money was created, so investors that invest money are made.

However, everyone naturally invests in one way or another. Remember, in many parts of the world, it is impossible to invest money. When a baby crys, it is investing his or her's time and effort with the hopes of getting care and attention in return. 

So I believe everyone "has it." It is a matter of who goes down the right paths to be able to connect that natural tendency to monetary returns.

Congrats on the first purchase!

For insurance, just shop around. Make sure you let everyone know you are shopping around too, it gives them an incentive to give you their best rate and service.

In your title you asked how to set rent? Look at other similar rentals in your neighborhood. Search on craigslist, zillow, rent.com, or jsut drive around calling for rent signs. 

You will get a million different answers on your cash flow margin. Most important, does this property meet your goals? Is cash flow what you're after? Is there potential appreciation? What is your exit plan? You do not want to just get the numbers right for one month, you want to have a clear picture of the entire life of this investment. 

There will always be more you need to learn. As long as you keep learning you will be ok. So just take it one step at a time and make sure you remember your goals.

Hey Cody! It is great to see someone trying to better themselves, thumbs up for that!

As for pointers, here is what I would change...

If the guys got 20+ property, he values his TIME more than anything. He won't want to waste his time on someone who he doesn't feel is committed. More importantly, he will only want to invest in you if you can bring him some sort of value. So your goals for this letter should be 1) Tell him what you want 2) Tell him why he wants to help you 3) Sound assertive. Sound confident.

Most importantly I would change the tone you are writing in. This isn't a friendly "long time no see" letter. THIS IS BUSINESS. I would avoid using phrases such as "I think" or "I just thought." Everything you say should have an obvious purpose.

Next I would check the grammatical errors. He may or may not care, but I can't picture this mentor ever reading a letter and saying, "This guys grammar is too good, I don't like him."

Lastly, keep it short and simple, but make your point. Only repeat if you feel it is that important. Do not add details that have nothing to do with those three goals. 

Instead of "I recall you telling me you owned 21 properties throughout Wabash at the time. At the time I had no thoughts at all about getting into Real Estate Investing. Here lately I have been thinking HIGHLY about getting into Real Estate Investing in the Kokomo area."

Try " I have become obsessed with learning about investing in real estate and remember you telling me you owned 21 properties."

Also, don't forget to add multiple ways to contact you (phone, email, address, facebook, skype, twitter, instagram, snapchat, myspace, whatever!). 

I hope this helps Cody! Last thing I would say is don't expect a reply. I've gotten a very low response rate on contacting other landlords outside of the wonderful bigger pockets community (where I'm still batting 1.000!). If he doesn't reply, don't think it is your letter. It is very possible that he doesn't have the time to even reply to your letter. Don't let it bring you down, just move on to the next actionable step that can advance your RE knowledge!

I am from Washington State, not DC, but I don't think there are any differences preventing you from doing what I would do...

I would get some money for holding the place for them for 15 days, if they cancel and didn't have a non-refundable "HOLD" deposit, you just lost 15 days that could have been rented to someone else. The security deposit is a reasonable amount. If they move in on the 16th, it becomes their security deposit. If they don't you just keep it. Draft some sort of agreement or printout a template online that states these specific terms.

The rest of the money (1st month's rent) I would absolutely collect BEFORE the move in date, the sooner the better. I think it is reasonable to ask for it 72 hours before they get the key, but I've also had tenants ask to exchange first month's rent for the key on move in date. This will work out either way as long as you have a HOLD deposit equal to market rent (preferably more!).

I have been on a lender on Lending Club for about 2 years now. When I signed up, I looked into every company similar to this (mainly prosper vs LC).

Prosper had some rule that prevented me from investing in my state. I don't remember the exact rule, but it was state-specific and made my decision a lot easier; I knew I wanted to put X amount into one of these p2p lending sites.

There are several strategies you can go with when investing in these. There are lots of articles on the internet, I would browse "p2p lending strategies."

In the beginning, I chose to try to buy the high interest high risk loans ( C-F credit grade, 15%-28%+ ). I planned to sell them on their note trading platform if they didn't perform (folio i think?). I soon learned that it is almost impossible to sell a non performing note for any sort of value on this platform; you would rather just keep it ( these are all $25 notes).

After about 1 year of this strategy, I went to the other side of the spectrum and bought a bunch of notes in the A-B grade with 6-11% interest rate. This was about one year ago. 

Here are my numbers at a glance for the 2 year mark...

TOTAL NOTES: 251

ISSUED & CURRENT: 175 (all $25 loans, A-G grade 6-28%)

FULLY PAID (PAID OFF EARLY): 37 (my experience is this randomly happens, all grades will pay off loans unexpectedly. not a bad thing, just an observation)

IN GRACE PERIOD (LATE ON CURRENT PAYMENT): 3 (ALL D GRADES, received payments equal to about half of original loan currently)

LATE 16-30 DAYS: 0

LATE 31-120 DAYS: 7 (D,E,F,G grade, 6/7 have paid about half, 1/7 is 2 months into loan(C grade))

DEFAULT (IM PROBABLY ABOUT TO LOSE) : 1 (D grade)

CHARGED OFF (I LOSE) : 28 (received between $2.50-9.50 out of my $25 before they charged off. These are all C,D and E grades. Surprisingly I've never had F,G charge offs, but I dont have as many either).

Lending club says my adjusted annual return is currently at 6.5%. When I first started with all the high risk loans, this was constantly 12-18%. I am not sure how accurate this is and i have never looked at the formula.

So there is absolutely money to be made in lending club and different strategies to do it. I went into this hoping to find the optimal investment strategy for p2p lending. My conclusion is although it is possible, the returns aren't big enough for me to focus on more than I do with my stocks and bonds. 

I'm sure if you spend a little time you could find a way to consistently pull 10-15% from these sites. It'll continue to be something I look at once a year. To me, the value is from trying the new technology and being ready for the next big thing. There are stories that the money was a lot easier when they first started doing this.

I would focus my energy on something else. People all over this forum are talking about how many thousands and millions they've made investing and you are worried about $25 late fee. I understand you are doing this for principle and not for $25. Just realize there's a lot of shady people in this world and there always will be. You can spend your life fighting with them or you can move along and find quality people to do business with.