All Forum Posts by: Sam T.

I am interested in finding a wholesaler who is wholesaling houses south of Chicago.  I am looking to purchase another property. 

I currently have a 4 unit under contract that is setup as a 3 bedrooms per unit. I am getting the place for $65k and it needs around $30-$40k in repairs. Once done I should easily get $1200 per unit for a total monthly rent of $4800. The property sits on a corner and has no yard or no off street parking. The numbers are great but what are your opinions on the no yard and no off street parking. I have other properties in the area and they usually rent pretty quick. More then likely these units will have tenants with children and not having a yard might turn them off from renting at this place. There is a park directly across the street and the units are very large. Any feedback would be great.

I think the same way Edwin, the areas that I am renting in is paying me over 20% a year on average and I am happy keeping it all cash.

Edwin Williams I completely agree with your statement. I have been investing since 2002 and have seen what leverage does to people in a bad market. You are correct that things are good right now and probably good time for leverage. I do agree that some leverage is ok, but to there are some posts that I have read thats says to leverage as much as you can, and that is where I think people get in trouble in a bad market.

I still think leveraging could be an issue. Take the landlord who has leveraged every property worth 100k owing 75k on each property with 25% down. If another big correction happens and his properties are worth only 75k now he won't be able to sell them to recoup any of his money and possibly need to bring money to close if he needed to sell. Yes he can keep them and continue to rent them but what if at the start of another market correction 40% of his tenants lose their jobs and he has to evict them which would take on average 2-3 months. He couldn't afford to carry those properties without putting more of his funds in to pay the mortgages. On the other hand a person's costs who wasn't leveraged would be a lot lower and they could weather the storm. In a scenario like this the leveraged person would lose everything or would have a much higher chance. I think this far in this cycle would be the worst time to start leveraging. That is my opinion.

I agree with you in the fact that something is going to burst soon and for this reason I am finishing up my last rehab that I just purchased to rent out. My plan is to save up as much cash to be able to pickup some of these deals after the reset happens. The party is about to end and it probably won't look good as the government doesn't really have many options left to juice up the economy again. I owned property before and after the 2008 crash and was able to get some of my best deals a year after that mess. I also saw a lot of friends and colleagues who were over leveraged lose everything. So my advice to anyone is if you are over leveraged find a way to change that. Leverage is good when you have control of it but once you lose control you could possibly lose it all.

I have setup a bank account for each unit I own and have the tenants deposit the rent in their account. It works great because once the tenants deposit their rent the bank gives them a deposit receipt. I tell the tenants to hold onto that as that is their rent receipt if for some reason their was an issue about rent being deposited. Once deposited I go online and transfer the rent payment to my main account. I used to run around and collect all my rents and realized how much time I was spending, plus it wasn't really safe carrying that amount of money with me. Try and use a bank that has multiple locations. We are lucky as there is a branch less then a mile from most of our rentals.

It seems harder and harder to find great deals but they are still out there. I was able to get a 4 unit under contract that a gut rehab was done on about 7-8 years ago. Its a foreclosure but the building is in great overall condition. Purchase price is $55k and needs around $25k in repairs. Each unit is 2 bedrooms 1 bath but the units are so large that we can get 2 more bedrooms in each unit. I will easily get $1200 in rent per unit/month for a total of $4800 month. I jumped all over this when I saw it and offered full price to get it under contract even though there were no offers on it. Usually I don't give asking price but I haven't seen a deal like this in while.

I invest in a c-d neighborhood and have since I started. Its true that not everyone will be able to tolerate a lot of the extra issues that go on in these areas. From my experience I can tell you that I have done real well and as long as you put all your systems in place and build a good team then you will do better then the guy investing in the a-b areas on a cashflow basis.

Nothing really, I have been doing good on smaller multi units. 2-4 units. Love them as I can pick them up pretty cheap and the cashflow is good.