All Forum Posts by: Justin Thompson

Originally posted by @Chris DeZarn:

Justin Thompson
How did the flip in Anderson go?

 I just happened to click on this thread and see this! haha. 

I bypassed on the Anderson property due to personal reasons… aka I didn't trust the person selling it (assigning contract). Wholesellers can find great deals, they can be a great tool/resource to have but if unexperienced or unethical… I'd rather pass even if it is a good deal. Since I bypassed on that property I've done two flips and picked up another duplex! Currently I'm remodeling a place near Eden Park. 

Originally posted by @Chris DeZarn:

Hey everyone! My name is Chris and I am a new real estate investor from the east side of Cincinnati. I have been on BP for a while now learning as much as possible through the forum and podcast but I didn't post an intro until now. I am interested in building a buy and hold portfolio over time and doing a few flips annually. I hope to network with other investors and maybe even find a mentor in my market. My background and degree are in construction management and I have a ton of valuable resources and contractors that will be huge assets as I get started.

Welcome and happy hunting those deals!  My advice even though you didn't ask, is to start off slow and make sure real estate investing is something that you're going to enjoy, be good at, make money at and have a true desire to be apart of. I've met quite a few people this year in our area that jumped right in, only to stumble along… they sell out having only gained a crushed pride and barely kept the shirts on their back. That's just words of wisdom to someone new!  Good luck and if you see my white company truck sometime, say hello!  I am all over the Cincinnati area and love to chat about investing. 

What the other two have said happens to be correct. What real estate experience do you have? What business/financial experience do you have? What construction experience do you have? I've bought roughly $700k in property this year and I've had none of my own money put down. It's possible, but you have to know how to structure the deal. Also, have to know how to make the lender or partner feel confident you know what you're doing. Until you possess a skill set that makes you desirable just due to your knowledge/ability, you're going to be hard pressed to find someone to shell out cash for an investment if they have to do all the work. They'd rather do it alone verse carry someone and share profits.

I drafted my own and then had an attorney look over it to make sure everything was done correctly. For my first few properties I just googled a sample lease for in my state. Used that for awhile, never had an issue. Once I bought more property, I wanted a built proof lease!

Welcome... I'd suggest using the search feature as they're is a wealth of knowledge here with several threads very similar to yours.

Fire him and hire another one. By allowing him to continue working there, you're giving him the impression you're a push over... just my thoughts.

Get a new loan officer and or find a new bank. It's not common for people to challenge appraisals, but I've experienced people doing so. I've actually challenged/questioned 2 appraisals on my own personal investments this year myself. If an appraiser comes in out of line, there's typically a reason for it. Either they're not competent within the market which is common when appraisals are out of line or the seller thinks their house is more special than it really is. If you're feeling like the appraisal is out of line do one of two things. Challenge the appraisal, or tell the loan officer you want a new appraisal by someone else.  Probably have to pick up the tab for a new appraisal though. If you pull comps and write your letter, the appraisal does not have to change his Opinion of Fair Market Value, however he should/has to within the report address why your sales were not utilized and or why they are not considered reasonable comparable alternatives.

Originally posted by @Jamie Spitale:

Originally posted by @Justin Thompson:

My questions are:

1) what if they let the insurance lapse? What are my options?

- If they lapse and you are listed as "Additional Insured" you will be notified. Give them a written 3 day notice to "Fix" the insurance and have it reinstated.  If they do not reinstate the insurance you can evict due to broken lease agreement if it is in your lease agreement that they must have and maintain insurance. 

2) what if they move out and have caused tons of damage can i make a claim on the renters insurance?

- No. That's what a deposit and your insurance is for. On my properties I carry "loss of rent" on one of them. So if a tenant destroys the property, my insurance will pay me whatever their rent is up to 1 year and or until rehabbed/re-rented.

 Is loss of insurance pretty expensive?  I know its worth it just wondering

No it wasn't expensive at all. If I remember correctly it was around $15-$30 a year additional I believe depending on the property i.e. my duplexes vs. single families. It was a no brainer for me. She asked how much rent I was getting etc. I just sent them a copy of my leases for each property. Not 100% sure as I don't have the policies in front of me, but it was cheap enough that I thought I'd be stupid to pass it up.

Not sure about your market there and the prices of homes but what I'd do is take $5k and put it in the bank. Take the remaining $27k and either do as the above said or what I'd do if home prices permit (not sure)... Buy 2 $65k houses and use split the $27k up into 2 20% down loans. Or depending on your financial situation since you do have a day job, that's good having another source of income. Take $20k-$25k use that as a 30% down payment on a distressed property that needs repairs. Use your remaining cash and any cash on hand to rehab the property. Rent it out, then do a refi-cash out to pull out your rehab money, initial investment and possibly some more cash on top since you are hoping to create a good amount of equity when you rehab the property. I think people on BP say it's the BRRR method (Buy, Rehab, Rent, Refi)? Sometimes there's a seasoning period but all depends on what kind of loan product and what bank you're dealing with.

Originally posted by @Malissa Davis:

Hi everyone, I'm a newborn in real estate but I have been doing a lot of reading in the forums, listening to webinars and reading books on real estate. I had plans of purchasing my first house closer to end of this year. I live in Detroit, MI and there a lot of great homes to buy but you have to be careful about the neighborhoods. I recently found a house that I am very interested in buying. It is a very decent home and it is already occupied so there is nothing to do but collect rent. However, it is in a notoriously bad neighborhood. If the present tenants were to move out, I think it'd be hard to find someone else to move in that neighborhood. I'm not sure if I should just live in the now and purchase my first home regardless of this flaw or if I should run like the wind. Would you purchase a diamond on the roughest side of town?

You already answered your question... When you're first starting out, the last thing you want to do is buy a property that is going to give you nightmares about.  Buying something that you're going to have a hard time managing is going to get your burnt out on real estate before you even get started.