All Forum Posts by: Sherry Patterson

I have bought two super cheap: 1. $15k Paris, TX 2. $18k Wichita Falls, TX. I have never seen either one of them, did zero work and put them on facebook to owner finance and sold them. They are 10 year notes at 9% interest. The one in Paris I will profit $33,000 and the one in Wichita Falls $34,000. Happy Investing!

@Ben M. In TX your lease states they are responsible for pest control. However, more than likely they are not going to pay for it. If it gets out of control it could cost you a lot more. You need to watch the appliances. Exterminators can not spray up into appliances and that is where they nest. So all of they spraying in the world is not going to get rid of them if they are in there. If that happens you have to get rid of the appliances, then spray multiple times to get the situation under control and then get new appliances. This will cost way more than $800 if you have to do this. The initial spray, if it is out of control already, may be more but then you should just have to do quarterly spraying. $800 is too much. 

All of this being said you can bill it back to the tenants. You can send them a warning that there is an issue and it is there responsibility to take care of it as per their lease. They will need to show you proof that it has been taken care of and set up on an ongoing contract. This would require them to work together to get this done and more than likely will not happen. So instead in the notice you provide tell them that since it is their responsibility and they have not taken care of it, that you have contracted a service, give the service agreement terms, then let them know they will be billed for the service as per their lease. If they do not pay they are breaking the lease and is grounds for eviction. 

Hope this helps. Happy Investing!

@Annie Ruffino Congrats on the contract! Those are hard to come by these days, so just getting it under contract is an accomplishment. I do property management and I always keep a tenant when I can. First the seller more than likely is not going to give them notice unless they are a bad tenant anyway. At this point they don't know if you are really going to get to closing. They are not going to get rid of a good tenant and then have a vacancy if you do not close. If you want them out you need to read their lease. If they are month to month they are probably going off of their original lease which normally says you have to give them 30 day notice to vacate. If no lease check out state laws for giving notice. 

Do they not have a deposit with current seller? I would ask the seller if they did a background check. If they did then ask them to supply that. That way the tenant doesn't even know. I know that some people just let anyone live in their properties, but I would think that most do background checks, or at least call their employer, ask for paystubs, and/or check out previous residence. Ask for that information from seller. Ask the seller for rent roll to show if/when they have been paying. Honestly, with a tenant I inherit I really don't care about their past, I care about their present. I assume you walked the property? What was the condition? Were they taking care of the home? Was it clean or disgusting? If they are taking care of it and paying, I would keep them. I have also found that all the background checks in the world do not detect dirty or crazy! I may think I am putting a better tenant in there and turns out they are crazy! 

As far as raising rent. If you are bringing it to market rents and they can not go anywhere else for cheaper and have to pay to move plus the headache to do so, I have found they had rather stay and increase their rent. I have one right now that has been a challenge. The new buyer bought it with a hard money lone (I sold it to my investor). The current tenants were paying between $650 - $850.  Market rents are $1300. The new owner wanted to give them notice because he has the money now for reno with the hard money loan and later he will not. I gave them notice and they freaked out. They did not want to move. Even though their rents were low they paid, and on time. They were willing to stay and raise their rent to $1200 per month! This was not good enough for the buyer he still wanted to rehab. So now they have agreed to stay for $1300 per month and let him rehab while they are in there!!! That is going to be difficult but is the perfect scenario. Now we do not have to worry about vacancy, adverting, all the time and money it takes to get new tenants. Some of them doubled their rent and were fine with it. Honestly, I did not even ask if they had background checks. I don't care. As long as their units were cared for, somewhat clean and they pay on time.... that is all I can ask for. I have many tenants that we thoroughly vetted. They had good jobs, they always paid current landlord on time, no issues, etc... then they moved into our unit and lost their job, didn't pay, had animals they didn't tell us about, constantly complained about repairs that cost a lot of money when they were not paying, etc... There was no way to foresee that coming. On paper they were good. So I had much rather keep a good current tenant that has proof of being good then to speculate on a new one. 

Sorry I know that was a bit of rambling! Hope it helped at all. Happy investing!

@Chris Criss I am in Fort Worth which is a great market. I tend to stay away from Dallas because it does not seem to have as good of returns. But at least in this area I recommend Tarrant, Denton, Wise, Parker & Hood counties. Houston and San Antonio are also good markets. Stay away from Austin. 

@Branden Nojima Congrats on making the first decision to invest! At your age it is a great time to start. The fact that your primary is in your fathers name is great because it definitely helps your DTI. Without it I am afraid you would not qualify for much. That is the first step is finding a lender and I can recommend some, even one in CA. But you will need to shop them for whole will give you the best rates. I am in TX so I don't know much about the CA market other than all of my clients in CA invest here in TX and not CA because of the cost and value. Once you know what you qualify for then find a realtor in that market and do as Carini mentioned above. Make sure you find one that specializes in investment real estate. As a broker doing all investment real estate and having to deal with other realtors on a daily biases I can tell you that most do not understand it at all. You being new you really need an experienced agent to guide you. It would be difficult to buy using an FHA loan outside of your area unless you both work remotely and you can prove that to a lender. However, you can get a conventional loan at 3.5% - 5% as well and it doesn't have the restrictions FHA has. If you are looking to BRRRR then FHA would not work because they will not usually lend on anything needing much work unless it is a 203K and those are hard to get and take a long time to close, but is an option. I have recommended this on several posts to newbies; think outside the box (house). If funds are limited you can buy a tiny house and put it on a small patch of land outside of town or in an RV park and rent it out or STR. Think about BRRRR on RV's. These can be rented for long term, short term in a park or rented where they take it on vacation. You can buy them cheap and fix them up cheap and people pay big money to use them or even flip them. Get a partner, you can do a lot more together than you can alone. There are a lot of ideas as a new investor with limited funds you just have to be creative. Happy Investing!

@Chris Criss Congrats on taking the first step in making a goal to invest. I am in Texas and although people around here are freaking out about the rise in prices, we are still way below most of the nation. I am still able to find 1% deals. Yes prices are rising but so are rents. We just purchased a property where they were paying $650 - $800 a month and I gave them an option to move out or pay $1200 and they all stayed! So I can't speak for other markets but ours is still going strong. If I can help you in any way please reach out. Happy Investing!

• Hi @Mason Peterson I would start with doing the bootcamp here on BP. Then take these steps:
• First and foremost set your goals and make a plan to accomplish them
• Target your market area
• Join local REI groups in your market area to network and make connections
  Use the connections to help you build your business. Get partners, use then for financing, get creative!
• Maybe get a mentor from the REI group
• Build a team in that area (real estate agent that specializes in investment RE and is an investor themselves, lender, title company, contractors, property manager)
  Get on wholesalers lists
  Set up an auto search list with your agent
• Start analyzing deals
• Make offers
• Buy a property and repeat
• Happy Investing!
  
  

Hi @Rigoberto Torres Meza I just responded to a very similar question on another post so I am going to paste it. But I can't stress enough that education is expensive! You can pay for mentor that can help you learn faster and build your business faster and hopefully make less mistakes. Or you can learn on your own and pay sometimes heavily with your mistakes! I did and boy how I wish I could go back and get a mentor!
I would never recommend any of the "gurus" online. Where do you live? And where do you want to invest? I would recommend finding a few local REI groups and start attending their meetings. They are great for networking and education. Find someone local that has real life experience that you can see, touch and understand in your local market or the one you are wanting to invest in. The basics for investment real estate are the same across the board but there are some local laws, state contracts, and other things that could affect your business in your market that someone that does not work in that market may not know. You don't know what you don't know and you don't know to ask and that could get you in trouble. I mentor in Texas. I am also a broker in CO but I am not familiar enough about their state laws to feel comfortable mentoring there. Find someone you can get to know and trust that has proof of their experience and success in your chosen market. It is okay to pay a mentor and I recommend it. Education is expensive and you can either pay someone to help you get there faster or pay to learn on your own at a slower pace and it maybe even a more expensive. Happy Investing!

Hi @Jaxon Poulton I would never recommend any of the "gurus" online. Where do you live? And where do you want to invest? I would recommend finding a few local REI groups and start attending their meetings. They are great for networking and education. Find someone local that has real life experience that you can see, touch and understand in your local market or the one you are wanting to invest in. The basics for investment real estate are the same across the board but there are some local laws, state contracts, and other things that could affect your business in your market that someone that does not work in that market may not know. You don't know what you don't know and you don't know to ask and that could get you in trouble. I mentor in Texas. I am also a broker in CO but I am not familiar enough about their state laws to feel comfortable mentoring there. Find someone you can get to know and trust that has proof of their experience and success in your chosen market. It is okay to pay a mentor and I recommend it. Education is expensive and you can either pay someone to help you get there faster or pay to learn on your own at a slower pace and it maybe even a more expensive. Happy Investing!

Hi there! Where are your parents located? What kind of loan is their townhouse in? Do they have equity in it? Do they have other debt they could pay off to make their DTI lower?