All Forum Posts by: Sandra B.

Pick a target area in which you would like to invest and become a student of that market. Know the properties, know how long they sit on the market, understand how long before there are price reductions. Look at both the for sale and for rent searches on the mls engines and use those to compare rental to sales prices. Look at the price history of properties for sale. Was the property last sold in 1998 or 2007? Did someone list it for rent at a high rate then give up and is now trying to sell? This history can tell a story about the motivations of the seller. Walk in on open houses for properties for sale and for rent. Listen to the feedback from others and chat with the agents. These conversations with agents about your goals can uncover pocket listings, listings where they know the buyer is distressed and willing to make a deal, upcoming probates, etc. I like to walk or ride my bike on the streets in the neighborhoods. It gives you a better feel of the micro communities and most desirable blocks and streets versus driving. Know where community amenities such as parks, ymcas, public transportation, etc are located. Understand the school districts. This level of diligence will help you feel comfortable when it is time to move forward and help you identify properties with the least risk. Tenant screening will be important, but don't get ahead of yourself. One step at a time. Identify a community and a budget. Educate yourself on that neighborhood to identify the right deal. Have your financial and loan ducks in a row so you are prepared to move swiftly. During the escrow process, take that time to plan out your rehab timeline, budget, subs, etc. After that you can tackle the business of landlording, which is a whole separate animal in itself.

A little off topic, but there are a lot of smart people out there.  Any suggestions or advice are appreciated.  I recently discovered that my father, who has been struggling financially for several years, has destroyed the credit of my two younger siblings.  He is a self employed attorney.  At one point he decided to purchase individual health plans for himself, my younger brother, and younger sister, rather than bundling them into a policy for the family.  When the kids had health problems (my brother broke his arm, my sister had a severe allergic reaction), he failed to pay the ensuing medical bills.  They are now 18 and 21, respectively.  In getting my younger brother registered for college and applying for a low limit credit card to help him build credit, I learned that he has charge offs on his credit history.  After some investigation, my sister has the same issue. She will be graduating college in May and will need to get an apartment, a car, even prospective employers pull credit. Is there anything I can do help get these charge offs deleted from their histories?  How can a minor be held accountable for unpaid medical bills?  Thanks in advance for your insights.

Zoning zoning zoning. Even though the house next door was able to get a permit for a sober recovery center doesn't mean you will be able to get one. OC cities are pushing back on granting more permits for these. And in most instances, they can't be within a certain distance of one another. So... before you spend a penny, investigate the local laws.

I actually think the condition and price are pretty fair for the area. I own a business on Main Street, so am very familiar with the neighborhood. The one bathroom is not ideal, but not uncommon for the older homes in 19127. You definitely missed the window for the st joes and pcom students. It would most likely be a roommate or young couple situation. I think your best bet is to make the unit pet friendly. If my memory serves me correctly, it is really close to pretzel park, which is a dog park. Perhaps you could place flyers there. You might even consider bringing some flyers to local dog groomers and pet walkers in the area. I think this will bring you a higher caliber renter. Highlighting your proximity to transit is smart, but don't discount that a lot of manayunk residents also commute to kop or are in outside sales. Identifying one or two long term lots, or even streets nearby where street parking is less competitive (I actually think parking near the park is pretty decent because there are fewer homes) and mentioning those in your listing or having information available as people come for walk through could be helpful as well. Good luck.

I would look at all of your assets as a portfolio with a target asset allocation mix. Create a net worth statement. There's a pretty good tool for this on the Dough Roller website. Sounds like you have about 500-600k in equity in real estate. Look at what you have in stocks, bonds, 401ks, etc. Look at what you have in other assets (businesses, any valuable art, etc). And, of course, look at cash on hand with a target rainy day number in mind. Re-evaluate your asset mix at a set interval (perhaps twice a year) and invest excess cash to "rebalance" to your target mix. From the perspective of debt paydown versus leverage, I know a lot of people on this site will always say to leverage to the hilt. In theory, that is the best way to add velocity to income growth. It can become a house of cards at a certain point if/when there is a correction in both housing and equities markets. There is nothing wrong with paying down debt, if that is what you choose to do. You could also consider capital improvements to one or more of the properties that will increase income and value rather than adding more properties to the portfolio at this time.

Any concerns about liability? Specifically with children and obviously drinking. Might want to investigate that with insurance provider and also make sure all fences and gates surrounding it are to code with the proper gate locks. Hot tub might be more manageable from a risk perspective.

@Navin Naik Agree with Mike Dymski . If you have a healthy income outside of real estate, investing in a property in a market with healthy long term fundamentals at essentially a break even will, in the long term, contribute dramatically to your net worth. I'm not talking about a bet on appreciation. I'm talking about long term principal paydown at low or no cost to you along with providing additional tax advantages. Just ask yourself, if the market cools and you are forced to reduce rents to keep the unit occupied, are you comfortable carrying a more substantial loss every month? This is a possible outcome that you should consider. On the other hand, if real estate investment is your primary source of income, then you would want to focus on finding positive cash flow properties. It is really a question of your total financial position and long term goals.

Fear is an instinct that is natural and protective. You can read all the books in the world, analyze 1000 deals 1000 different ways, but if you have never done something before, then fear is natural and not to be ignored. Why don't you seek out a more seasoned partner? Bring someone with experience a deal that you have vetted and looks good. Offer them a slightly inequitable split (inequitable in their favor) and explain that you are well schooled but inexperienced and would like to work along side them to learn some practical details that can't be gleaned from books. You might have to do 90% of the work on this first deal for only 40% of the profits, but your risk will be mitigated by having an experienced partner and you will gain the knowledge and expertise required to feel confident pulling the trigger on the next one yourself.

For owner occ, they will want you to move to the property within 3 months of COE. The lender will probably also want a letter from your employer confirming a transfer or an executed offer letter from your new employer. It may be possible without this if you find a smoking deal with 3 units already occupied in leases that cover the PITI, but that will be dependent on the lender and how they analyze and count income.

Mostly the interest rate. If you can get a card that charges introductory 0% interest or have the means to pay off the monthly balance, credit card is fine. If not, paying 25% or more in interest compounding monthly plus late fees makes a credit card unappealing. Even with an "unsecured" line of credit, there is generally language in the documentation that requires a personal guarantee. You could look into a secured line, which might open options and offer better terms.