All Forum Posts by: Lee Smith

If he is active military he has to pay his bills...

I work with a lot of bad credit tenants.. If They have debt over 1k that they are not paying on, I generally walk away.. So like a girl who had 2k in credit card debt from 2012, and she was not paying on it.. NOPE! Now if it was a while ago that the credit was charged off I might consider them. Just recently had a guy who applied who had 12k of charged off debt from 2008. I considered him, but then another 1k showed up from 2012.. Just too much for me so we said no.

I don't market to probate, but I have friends that do..

Think back on when your family members passed. The first couple of weeks are just dealing with all the funeral arrangements.

Most of the time you have 3-6 months before the family starts thinking about getting rid of the property.. Let them grieve a bit. Ambulance chasing is probably going to irritate more and get you less deals..

When you go to close, I assume you will use a title company. They should be able to make sure you have clear title and the orders are removed. You can also call cook County and ask them if there is anything on the house. I would assume that there is a phone number on those orders.

I am in Indianapolis, IN market. I get about 2-3 calls a week from out of state investors... I have seen more horror stories than I care to admit...

Find a market you like, and then check trulia/zillow for property managers that have feedback. Also do some google searches for property managers.. Then ask for references, and check the references. First deal or two, get an appraisal done from someone other than your property manager. Ask for comps from your property manager and then go to a realtor or two and offer to pay for comps from them. Ask for video from the properties you are looking at. I like videos because the guy taking the video has to talk and you get to see how saavy he/she is.

Don't be afraid to hop on a jet and go see your properties every so often.. I work with investors who have never been to Indiana, and I do my best to keep them in the loop, but nothing beats coming out and seeing what you are buying.

Keep the house at the level of others in the neighborhood. You don't put granite in a laminate area.. If you get my drift.. ha! Clean and painted will get you tenants quicker.

Insulate the attic, and make sure the doors and windows seal properly. If you really want to get crazy you can get quotes on spraying in insulation, or you might also consider buying the kits from box stores to spray it in yourself. Yes, you will need to patch the holes afterwards..

As others have said, submit materials order for $2500 or more and you get a significant discount. I find some things are MUCH cheaper at different stores.

I buy all of my tile from Home Depot, but nothing else. They have higher quality and nicer looking tile than the rest for much cheaper.

I get my paint from Sherwin Williams. SW offers deep discounts to someone who sets up a contract account. We consistently get paint for $100 p/5 gallons for stuff we are paying $150 at lowes, etc.

We buy cabinets from Menards. I can custom order maple cabinets from Menards for 75% of the price of the in stock cabinets lowes, home depot, etc carry, and mine aren't all dinged up from being loaded on to shelves by stock boys who don't care...

We use lowes for most of our stuff. We just show up at the contractor desk and they give us 10-15% discounts. Important to note, certain contractor desks are better than the rest. We go to one lowes because we get discounts. It's a bit out of our way, but the discounts make it worthwhile.

I pull lists of tax records and mail to them. I get about a 3% response rate. Most of the time the deals don't work out, but when you get the one that does, it makes it all worthwhile. I made 35k profit on one rehab deal.

Most of the time they respond because they just think.. Well, what have I got to lose. Maybe he/she will buy my headache.

Here's my question to you. What if one of them sells to you? What are you going to do? Make money? Some of the most successful investors I know just do things without thinking about them. You point them in a direction and tell them to do THIS, and they do it, and are successful.. They don't ask why and doubt it could work.. They just do it.

SO DO IT! You'll never know if you don't try!

I've never seen a hud appraisal on a deal here in Indy.. Never knew to ask, but not sure I would believe it if they did. ha!

My first house 20+ years ago was a live in flip. Back then we had to live in the house for 2+ years to beat capital gains( or so I was told), so I would buy and live in them for 2 years... It's not that way anymore.

The big thing is that banks don't want to lend on houses that need work. Also, so many HGTV and DIY channels, that hardly anyone is afraid of paint and carpets anymore.

Most people don't realize that there is hidden costs/holding costs to deal with. I asked a guy the other day.. A house is worth 100k, it needs 20k worth of work, and you want to make 25k after you sell it, so what do you need to buy it for? He took 2 secs and said "55k!" I said, "oh young padawan, let me show you the error of your ways. How about holding costs, agent fees, insurance, taxes, utilities, etc. "

As for stories:
My first house was previously owned by a father and his 30-40 something son. The father passed away, and the son was enjoying the good life of mooching for free. The kitchen was littered with beer cans stacked almost floor to ceiling, and he had a double stack of paper plates he had created a mountain of cigarette butts on. The tar on the walls was so thick you could see where every picture had been hung in the household. I could go into more of the niceties I was confronted with, but this is a family channel. Needless to say my first house was the house I found out about primers on.

I moved in on a Thursday. My dad met me at the house, and we painted one bedroom and the master half bath. While the paint was drying we yanked up the carpets, minor sweeping, and moved all of my stuff into the living room and dining room.. MIDDLE of the room, so as to keep my stuff away from the filth on the walls. Just enough to move in on that first night and not be in total filth. Friday night, my buddies showed up. We ordered up a keg, and we painted the living room and dining room and moved my furniture to correct locations in about 2-3 hours. I never saw those guys work that fast ever again!

This was also the house where I had just finished dryloking the basement, and painting it all. Was down their working out, torrential rain going on outside.. I go to do a squat, and I am standing in a puddle... Turns out the entire back yard tapered to one window. With that torrential rain, the ground didn't absorb the water fast enough so it all rolled down the hill and into my basement window. 20 tons of dirt later I had releveled the yard so that didn't happen again!

@Daniell Myers Thanks for the referral.. I will check them out. So they are doing a loan on a 20k property for you? Most of the banks I know of only want to deal with loans of 50k or more.. To be honest I haven't really been looking though, because we generally do everything with cash on the smaller deals...