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All Forum Posts by: Raj Gandhi

Raj Gandhi has started 12 posts and replied 141 times.

Post: Disclosing I'm a Physician?

Raj GandhiPosted
  • Real Estate Investor
  • Saint Paul, MN
  • Posts 145
  • Votes 60

My first choice would be for you to leverage your MD.  I'm pretty sure your hourly rate as an MD would be better than a wholesaler.

Second choice would be to go big!  Invent a back-story where you've been in the industry since 2007 and you've averaged 60 deals a year since then.  Your office staff is handling some crisis so you're doing this job.  It isn't really worth your time but it is you enjoy helping people out by matching-up sellers with your vast network of buyers.

There's a slim chance that #2 is unethical... maybe #1 is better after all.  :)

Post: What DO You Think?

Raj GandhiPosted
  • Real Estate Investor
  • Saint Paul, MN
  • Posts 145
  • Votes 60

Banks have rule books; logic need not apply.

One time the loan for a rental property purchase of mine fell-through because there was a "safety issue" with the home.  The "safety issue" was a broken window from the lawn mower throwing a rock.  Also, no one was allowed to go on-site to do any repairs until the home was sold.  This created a catch-22 for most buyers.

The point is, don't assume the bank knows anything except how to follow their rules.  The foundation may or may not be a serious issue so do your own homework.

Post: Meetup inquiry MN

Raj GandhiPosted
  • Real Estate Investor
  • Saint Paul, MN
  • Posts 145
  • Votes 60

@Dave Crussel 

Agreed, it was nice to connect with everyone.

Raj

Post: Best practices to determine accurate home value when working leads ?

Raj GandhiPosted
  • Real Estate Investor
  • Saint Paul, MN
  • Posts 145
  • Votes 60

Use Zillow.  Their zestimate is based on some robot comps.  You don't need to trust it implicitly but it will give you a decent range.  Turn-on display of recent sales; note the details of similar units and date of sale.  Ideally, enter some of these in a spreadsheet.

Look up property tax assessment.  Again, the absolute value isn't critical but look a the trend.  If necessary, look up the same tax assessment records for some of the Zillow comps.

Look on craigslist for FSBO comps. They will tend to be high.

This one is sketchy... if there are bandit signs around, call the wholesaler.  Make up a story about a fictitious comp.  If they demand a starting price from you, start real high. The wholesaler will under-shoot market value. 

Become an expert on your area. If you study the MLS, zillow and comps you'll eventually become an expert. The smaller the area, the faster you'll learn. If you're area is large then it will take a long time.

Finally, consider working the deals from both ends.  Simplified, purchase price & rehab & rent => cash flow & profit.  Instead of using your numerical analysis to determine precise rate of profit, decide on an acceptable rate of profit and re-arrange the equation.  You should be able to calculate a max purchase price.  As long as you're meeting profit projections, who cares if you don't know the exact value.

Post: Central AC / Mini-splits in rental units

Raj GandhiPosted
  • Real Estate Investor
  • Saint Paul, MN
  • Posts 145
  • Votes 60

In my opinion, everyone expects AC these days. Five years from now it will be more so.

I added a mini-split as part of a recent addition.  It was about the same price as forced-air heat but saved me space I didn't have for duct work.  In hindsight, I should have somehow made space for ductwork.  The mini-split required significant labor from the electrician and the HVAC guy because of the exterior AC unit.

A new, forced-air furnace just cost me $2400 installed.  Existing duct work and AC were unaffected.  What kind of cost are you looking at with your (seemingly exotic) systems?

Post: Meetup inquiry MN

Raj GandhiPosted
  • Real Estate Investor
  • Saint Paul, MN
  • Posts 145
  • Votes 60

Hello all, 

@Matt Taschner @Dusty Ackerman 

Confirming that I'll be at BWW 11:30 Friday (tomorrow).   Looks like we'll have up-to 4 or 5.   Whoever gets there first, tell the greeter "Bigger Pockets meeting" later arrivals can ask for the same group.   I'll have my red ski jacket (but not the Taj Mahal) with me.  Hope you can make it.

Raj

Post: Mortgage over basis..

Raj GandhiPosted
  • Real Estate Investor
  • Saint Paul, MN
  • Posts 145
  • Votes 60

I don't see a problem but perhaps I don't understand the question.  Let me know what I'm misreading:

  • Mortgage = amount owed on the property
  • Basis = cost basis (initial purchase price but there are ways to affect it)
  • Value = real value or current sale price

If Mortgage > Value then you're under water.  Selling the property can be a problem.  You'd need to bring cash to the table or pursue a short sale with your lender.

If Value > Basis, that's fine the property appreciated.

Either Mortgage > Basis or Mortgage < Basis  ... I don't see that it would affect taxes, current value, cash flow or profitability.

Post: New (and pretty green) Investor Here! Hello Everyone!

Raj GandhiPosted
  • Real Estate Investor
  • Saint Paul, MN
  • Posts 145
  • Votes 60

Welcome to the site!

Your story is exactly the same as my wife's.  Except she got a Ph. D in counseling psychology in 2000 and eschews anything related to being an entrepreneur.  Ok.... maybe not "exactly the same"  ;)

If you haven't seen it, watch the movie 50/50.  Anna Kendrick's psychologist character is the best ...if you like super-uncomfortable situations.

In the unlikely event that you wanted advice... keep your focus on finishing the Ph. D.  There will always be a time in your life that you can invest in real estate but this is probably the only shot you've got at a Ph. D.  There are plenty of candidates that quit abd.  When youre done, you'll also have a huge investment in your education.  To get a return on that investment, I wouldn't plan to quit that career for at least 7 years.

Finally, if you aren't already, max-out your (subsidized) student loans and invest the proceeds responsibly.  As a grad student, you probably have relatively high loans available. Those loans made me a nice nest-egg after graduation to invest. 

Post: Using a friend realtor

Raj GandhiPosted
  • Real Estate Investor
  • Saint Paul, MN
  • Posts 145
  • Votes 60

All my purchases have been via MLS. Using my realtor has been essentially mandatory to help me get listings, details and showings. She puts in even more time with the purchase agreement, negotiations and seller follow-up. It is certainly worth it to me to use a realtor buying MLS properties.

MLS queries can't take much time for a realtor; I'd think they'd be happy to do it even if you're not too serious. Showings might be a different story.

If you're fully intending to purchase from the realtor then going to lots of showings makes sense.  However, if you're just going to showings to kick tires and never planning to use the realtor then that's probably unethical (after you've seen a few).  Somewhere in the middle, if you're honestly interested in particular properties then having the realtor take you to showings is legitimate.

Ultimately realtors are sales people that want the opportunity to earn your business. 

Post: Next Steps??!!

Raj GandhiPosted
  • Real Estate Investor
  • Saint Paul, MN
  • Posts 145
  • Votes 60

I'd have them sign a new lease with you.  Ideally, set the term to end near peak moving season (May-August?).  With a healthy advanced notice, let them know you're raising the rent to market rate.  Hopefully they move so you can have your own, personally screened tenants.  If they don't move, at least you get more rent.