All Forum Posts by: Susan Maneck

Quote from @Kermaury Musgrove:

@Susan Maneck hey Susan, I have family in Jackson, Meridian, Hattiesburg, Ellisville, Philidelphia, Soso, Laurel etc. I am looking more at Gulfport, Biloxi, Jackson and some other regions of MS. I am just having some trouble starting out and the OOS way also.

 I have only one thing to say about Gulfport and Biloxi. Remember Katrina. 

Quote from @Roger Flot:

Mississippi, like California and almost every other state, has several regions and sub regions and each has its strategies and gotchas and opportunities and watch-out-fors...

that said, step one is getting boots on the ground in the town/region/holler that you can trust.  Establish your buy box and really get to know the territory in the specific area you are looking at and then trust, but VERIFY

Yes. During the Great Recession I found my two-story house which I had purchased from HUD for 72K was suddenly under water. I figured I could cry over that or buy up the neighborhood. I now own five houses on that street. Fortunately Kermaury has ties to Mississippi so it might well work.

Quote from @Kermaury Musgrove:

@Jonathan Greene I have family that lives in Mississippi and I go out there or at least plan to go out there twice a year. The houses are much cheaper also to start off. I would like to flip and hold as I start and rent out the property and work my way back towards the West Coast as things take off (hopefully.) I also plan to flip and sale once I get thd ball Rollin.

It is best to have ties with Mississippi if you are going to buy property there. Where abouts does your family live? I own seven properties there, one my son lives in the other six are rented out. They provide the bulk of my income. If I sold them all, I'd be lucky to buy a condo in California. 

Quote from @Rich Hupper:

The other funny one is when a first time buyer comes to me with their fha loan and says they want to find a "deal". Lets look at foreclosures, and short sales....... smh

Hey, that's why I like HUD homes. They tell you whether the house is in good enough shape for an FHA loan. I avoid the ones that aren't even if I plan to pay cash.

I buy foreclosures but never sight unseen. Most of the properties I bought were through HUD or Sallie Mae. In Mississippi you would not only have a problem with the house being trashed but foundation problems are endemic here and if the house sat for awhile with the bad roof you almost certainly have mold. HUD gives you a pretty good idea as to the condition of the houses they sell.

You didn't mention whereabouts in Mississippi you live. Personally, I think this state maybe the best place to get started because houses are so cheap here. If you are in a college town I recommend you get started by house-hacking. That's where you buy either a small multi or SFR, live in one unit or room and rent out the rest. I think that is the best place for young people to get started.

Eviction in Mississippi is not that difficult. It is even possible to do a self-eviction if you can do so without causing a disturbance, but I wouldn't try it. What you do is you file for a 30 day eviction with the chancery court. You usually it takes about two or three weeks to get a hearing. Once you get an order in your favor you pay a fee for the constable to enforce it as soon as the 30 days are up. That usually takes another couple of weeks. 

You can do all this without a lawyer, but mind you, expect your house to be trashed. 

Quote from @Buck Palmer:

Quote from @Susan Maneck:

Hi Buck! 

The problem you are going to find is getting financing for property as an investor. The houses you can afford given the size of your down are ones banks are not likely to want to lend money on because their costs are about the same as for a big loan. What I suggest you do is something I recommend to most newbies, especially young men. Rather than fix or flip, do something called house-hacking. That's where you buy a 1-4 unit property owner-occupied. If it is a small multi, then you live in one unit and rent out the rest. If it is simply a SFR then you live in one room and rent out the rest. If you do the latter, then you might want to buy something near JSU, Tougaloo, or one of the other colleges in the area, and rent rooms to students. This will allow you to get into a property for as little as 3-5% down. Even though this would also be an equally small loan, banks can't turn those down if your credit is otherwise good because that is considered red-lining which is illegal for owner-occupied loans. But I think you still need more money to pull this off. While the 10K you have will likely be enough to close, where are you going to get the money to rehab the house? I almost always spend at least 5K getting a house in relatively good shape rent ready. However, remembering my own student days I can say that if the rent is right, they are often less picky about the condition of the house they live in, so if you house-hack you may be able to do the repairs at the same time you are renting out rooms.

Best of luck to you! 

 Well what I was thinking that I could do was look for a tax deed property in a decent area (closer to one of the colleges in town) and use my business credit to acquire the property and to renovate. Once i’m done renovating, I could refinance and pull the profit out and use that to pay the debt off and repeat the process. I already have a 16k credit card and i’m looking to stack more. How do you feel about that strategy?  

 I've never tried going the tax deed route, so I can't help you there. But keep in mind, as with most auctions you can't get inside to check the condition of the property you want to buy. These houses have usually been vacant for years and I don't have to tell how much vandalism there is in Jackson. The first house I bought had every copper wire and pipe stolen in it! Also, are you prepared to do foundation repairs if necessary? That's one of the main reasons these houses get abandoned, that and bad roofs but you can probably tell that from the outside. 

Usually you have to rent out a property for a year before you can refinance. If you are going to try and finance your rehab using credit cards, make sure you have more than one. That's for two reasons. One, your credit score will take a dive if you use more than 30% of your total available credit, so plan on having three times the amount of available credit as you think you'll need. The other reason is that you need to keep those interest rates low, very low. If you just got this card it probably has a teaser rate now, but you need to be able to do a balance transfer once it runs out if you haven't paid it all off. I did use credit cards to help build my portfolio. If you do it right you can keep the interest rate and fees down to the equivalent of 5% a year, but it is risky. Whatever you do, do *not* fund your rehab at the usual credit card interest rates. Remember, your goal is to get an bigger pocket, not an empty one. 

Hi Buck! 

The problem you are going to find is getting financing for property as an investor. The houses you can afford given the size of your down are ones banks are not likely to want to lend money on because their costs are about the same as for a big loan. What I suggest you do is something I recommend to most newbies, especially young men. Rather than fix or flip, do something called house-hacking. That's where you buy a 1-4 unit property owner-occupied. If it is a small multi, then you live in one unit and rent out the rest. If it is simply a SFR then you live in one room and rent out the rest. If you do the latter, then you might want to buy something near JSU, Tougaloo, or one of the other colleges in the area, and rent rooms to students. This will allow you to get into a property for as little as 3-5% down. Even though this would also be an equally small loan, banks can't turn those down if your credit is otherwise good because that is considered red-lining which is illegal for owner-occupied loans. But I think you still need more money to pull this off. While the 10K you have will likely be enough to close, where are you going to get the money to rehab the house? I almost always spend at least 5K getting a house in relatively good shape rent ready. However, remembering my own student days I can say that if the rent is right, they are often less picky about the condition of the house they live in, so if you house-hack you may be able to do the repairs at the same time you are renting out rooms.

Best of luck to you! 

Quote from @Peter W.:

Quote from @Scott Trench:

I've discussed the REI market at length, and I've been a little skeptical of the smokies for a while now. It's a very regional play - or appears to me. I'm in CO. There's no world where I get on a plane to travel to a cabin in the smoky mountains in the US southeast. I can, for roughly the same price go to beaches, major cities, other countries, etc.

I also think that, generally, STRs are not like a one off way to build wealth. Buying a vacation home and thinking it brings in cash flow is a sure way to make the locals rich, as vacation rental communities are extremely seasoned at extracting wealth from visitors, perhaps especially including those who own remotely. 

This creates a particularly challenging environment for the investor in a general sense:

- A regional vacation market

- Competing not with other rational investors, but with people who just have a mountain home; and therefore are fine to run it at a loss.

- Competition can and actually will increase in bad times, because people who own casually for second homes will try to get something instead of nothing by listing their properties for the first time.

- People will fight to give everything they have to keep their primary residence, but if their second or vacation home becomes a pain in the rear, they’ll sell. This can create huge swings in inventory.

- Buying that first STR property in a "hot" vacation market that isn't local therefore seems like one of the highest risk investments one can possibly make.

I will not be surprised to see pain in several similar markets around the country, perhaps including certain desert locations that surged in popularity, certain lake areas, and the pain may extend to even areas like CO mountain towns, despite the fact that unlike the smokies, people do travel from all around the world and country to get there.

 The smokies are the most visited national park in America. I agree that the west is more beautiful, but they are accessible to everyone on the east coast. They are 8 hours from northern Florida, DC, Atlanta, Charlotte. No one west of the Mississippi is heading there for vacation, but there are way more people to the East than the west. while you may classify it as a “regional park” it gets as many tourists as the next three most visited parks combined. I have no opinions on your other comments though.

 I can understand why someone from Colorado might think like Scott, but as Californian who found herself transplanted to the South for more than thirty years, living in five states, I have to agree with Peter. Call it regional if you like, but it is people from a BIG region who go there. If we have another recession like 2008, I'm buying a place there!