All Forum Posts by: Shane Johnson

@Mark S.

Does this mean you got the property?

Anyway, it is easy math my friend.

First question to ask yourself. Who's paying the interest? If its cash flowing, it sure as hell is not you. Its your tenant. So in my opinion, you shouldn't focus on it. The only part that matters is the cash flow.

Whats more important to you. 5% of your capital in your pocket, or cash flowing an extra $16 a month? $192 a year more cash flow.

$56,750 x 20% = $11,350
$56,750 x 15%= $8512.50

$2837.50 more in down payment. Almost 15 years to get that capital back out, at $192 a year. Wouldn't you rather have that capital for emergencies, vacancies, improvements, or acquisitions?

If you can get financing at 15% and its only $16 more a month, to me, it is an easy decision.

Best of luck!

I offered 82,400 5% down, on my home (hud auction) last year. 2 offers came in at 101k, one maybe both was cash. Both backed out for personal reasons. You just never know!

So from what I gather here... a few properties in the Mohave area will be available soon for fire sale prices! :D

Negotiate everything.

Example - offer 50k they pay closing costs. They come back at 60k. You come back at 52k, you pay closing costs. They either come back with an offer, or say take it or leave it. If they come back with say 58k, come back at 54k you pay closing etc. If they come back with no, take it or leave it. You let them sweat it for a few days and take your offer. Last little tip, is maybe come in at exact number, say $52,365.00 or something, In my experience in business, exact numbers show there was effort and calculating in effect. 50,000 even sounds like your just tossing them an offer. This could be stupid, but I am superstitious. :)

This is all assuming you are not competing against other offers.

"If you cringe every time you hear of someone paying retail for a property ...

you might be a real estate investor."

x3 - especially when that friend shows interest in REI, but pays full retail...


You might be an REI if... your friends are out at the bar on a friday night, and you're playing with J Scotts spreadsheets for fun.

You might be an REI if... your friends tell each other how annoyed they are with how much you talk about houses.

You might be an REI if... you see an elderly couple working out in the yard at a duplex down the street and you skip your lunch break to talk to them about a land contract and get their contact info.

I think the lesson here is... don't own cats.

:D

60k is too much in my opinion. Id feel better at 40-45k with that property.

I wouldn't want to make any less than $100-150 a month cash flow, at this price point, and that includes PM.

New shed? Why do they need a shed? You're mowing the lawn you said. Also, it its a town house? Why are you mowing the lawn? Where is the HOA fees, and what do they pay for? HOA fees here with 100-170k townhomes range from $120-180 a month.

Regardless, at 65k all in your basically at 1% gross rents to purchase price. Too tight in my book, especially on such a cheap property. Offer $40k-45k. Maybe more if you KNOW you can get over $700 a month.


PS - some of your maintenance numbers could use some honing in my opinion. Plan on doing it yourself, watch online videos and shop at Home Depot/Lowes, whatever to get pricing ahead of time. Lastly, if your self admittedly too lazy to mow the lawn or stain the deck, I wouldn't plan on self-PMing and not hating it.

Great strategy, and is something I hope to replicate. It could spread you too thin when there is a market correction though. Say there is a market correction next year, in the middle of an acquisition or two. At 60k each prop, your 24k into down payments, and 20k into rehab costs. You now have 44k invested that you cant pull out. Who knows, it could be a few years before you can refi that capital back out. Other things to consider, you may not be able to refi at 80% LTV. Others with more experience can chime in on that. Hopefully your credit score is north of 700-750. To help make sure you don't leverage too much, definitely stick to that saving as much as you can, for emergencies and to hedge your bets so to speak. Lenders want 6 months reserves for each property when you start stacking up mortgages. While some feel this is overkill, they do it for a reason. I feel it should be taken with a grain of salt, and replicated to some degree when you get to a point where you own multiple properties, and have something to lose...

Commitment? What commitment? Are you not able to walk out the front door any given day and quit? That's what I thought.

I think wholesaling can be done by some, and be a good supplement of income for others, but its not for everyone. I am sure I could be good at it, based on my personality and connections, but I have no desire to, for various reasons.

A great paying job in my opinion, is the first stepping stone. Level 1-1 on your way to saving the princess in the castle. Get that job, so you can get to where you really want to be. You also never know who you will meet. In a large corpo setting, it could be a great place to network.

In America, its possible to get rich quick, not get rich easy.

Does the tree hang over the property line onto your property? If so, you have every right to trim the tree down to the property line I believe?


My opinion? Really evaluate if it fell, would it actually hit someone, or just cause a lot of damage. As long as no one was getting hurt, just let it fall and let the insurance company pay for your rehab. :)


I am just kidding ;) ;) I am not advocating negligence for an insurance pay out.