All Forum Posts by: Sam W.

Hey Thomas Cooper ,

Welcome to BP. I'm just up the road from you a bit.

In my mind, your area is a perfect location to buy and hold multi-family properties. Great valuation and good demand for rentals. Plus, given your existing businesses, you probably have a fair amount of interaction with RE investors and the trades in the area.

If I were starting out again I would follow the same pattern I did back then....find a locate RE agent I liked and who understands what my objectives are...then start looking at properties - perhaps lots of properties.

You clearly are a sharp fellow and you will catch on quickly. If you want to buy rental property you must become an expert on your market. What is the going rate for a 2BR, 1BA duplex in the typical Wooster area? You have to be able to look at a property and mentally calculate how much you will be able to get in rent.

I'm not an expert by any means, but I focus in a very narrow geographic area and have a pretty good feel for property values and rents. Makes choosing good cash-flowing investments much easier.

Good luck....lots of smart people on BP...shame on you if you don't ask questions. There is also SO MUCH information archived on previous discussion threads. Search for it.

Sam

Landon Dolezal,

I've always believed that you have to pick the right investment strategy based on what the RE environment is in a particular area.

As J Scott said, in many parts of the country good deals have become hard to find.

I posted this on another thread, but here is RealtyTrac's assessment of the lowest priced (list to market price comparison) forclosure markets:

Best foreclosure markets

City Median foreclosure price Discount
Cleveland $57,592 56%
Dayton, Ohio $50,679 57%
Charlotte, N.C. $111,260 43%
Columbus, Ohio $87,994 48%
Palm Bay, Fla. $87,018 39%
Winton-Salem, N.C. $72,356 49%
Daytona Beach, Fla. $88,012 33%
Canton, Ohio $57,339 48%
Greensboro, N.C. $85,333 40%
Pensacola, Fla $100,825 33%

http://money.cnn.com/2013/03/08/real_estate/foreclosure-sales/index.html

George S,

Based on your expense breakout, you're at about 43% (9601/22386) of your EGI...and that doesn't include management fees since you said you were going to self-manage. Pretty close to the 40% rule of thumb for quickly evaluating a self-managed rental property deal.

Quick math puts you at about $136/month in positive cash flow (as you showed ($1630/annually), for 11% CoC return.

I think you've run the numbers correctly...will just be up to you to determine 1) if there are any upfront capex that will raise your initial cash investment beyond $15K, 2) if your monthly expense assuptions are about right, 3) if 11% is an acceptable return for your initial investment and your time (since you are self-managing).

Sam

WRT foreclosures...here is RealtyTrac data:

Best foreclosure markets

City Median foreclosure price Discount
Cleveland $57,592 56%
Dayton, Ohio $50,679 57%
Charlotte, N.C. $111,260 43%
Columbus, Ohio $87,994 48%
Palm Bay, Fla. $87,018 39%
Winton-Salem, N.C. $72,356 49%
Daytona Beach, Fla. $88,012 33%
Canton, Ohio $57,339 48%
Greensboro, N.C. $85,333 40%
Pensacola, Fla $100,825 33%

http://money.cnn.com/2013/03/08/real_estate/foreclosure-sales/index.html

Sam

Craig Barker,

What are you calling them about? Clearly about buying their property, but are you a wholesaler?...is their property for sale or are you cold-calling them?...Are you looking to buy and hold or flip the property?...

A little more detail on the sellers and your intent will make it easier to understand what is "afoot"...and to help structure the questions you should ask.

Steven Hamilton II / Bill Walston,

Thanks for your patience and answers.

Sam

Thanks Deborah B. - I just might take the plunge.

Ok...I rented the property this morning. Posted it on Craigslist and Rentlinx (free version). Posting date was March 24th. For those who don't know, Rentlinx is a service which posts your vacancy on 18 different sites (Trulia, Zillow, Hotpads, etc).

I kept track of how many discrete email inquiries I received. My unscientific results:

Craigslist: 13
Zillow (from Rentlinx): 2
Trulia (from Rentlinx): 3
Hotpads (from Rentlinx): 2

I rented the property to someone who saw the ad on Craigslist.

As a note...my Craigslist ad also mentioned an open house we had on this property, so I'm not sure how many folks saw the ad on Craigslist, didn't email me but showed up to the open house. What I'm saying is that the Craigslist number might have been higher had we not had the open house.

The bottom line is that in my area Craigslist seems to generate more traffic (at lease for a duplex in the $675 price range). That said, I was surprised (and impressed) with how easy Rentlinx was to use and that I actually got replys. I will use both from now on (Rentlinx actually has a Craigslist helper as part of the site).

For what it is worth.

Sam

I use Excel workbooks with tabs for each property. In my opinion, it works fine for a couple units but it has gotten pretty clunky as I've added more. As Emily Dixon said, the biggest drawback is the lack of a smooth data entry feature as well as the need for multiple worksheets to have a manageable database for all the things we have to track.

I've been looking for a good alternative...seems Quickbooks might be worth a look. I use Quicken and TurboTax....is learning Quickbooks fairly easy if I have those other two Intuit products under my belt?

Bill Walston / Steven Hamilton II,

I know the old "do I have to issue Form 1099-MISC" question has been batted about on BP for over a year now. It seems quite clear (as you have repeatedly stated) that most landlords who are non-RE professionals do not have to issue 1099-MISCs when they pay more than $600 in a tax year for services. That said, I have a couple of quick questions:

- If you pay an unincorporated individual (private citizen, non-business entity) more than $600 do you have to issue a 1099-MISC?

- If you have a real estate LLC, does the LLC have to issue 1099s since rental RE is the trade or business the LLC is engaged in?

Thanks in advance for probably replowing this ground.

-Sam