All Forum Posts by: Thomas Garza

I am revising my lease and I am curious if I should have my tenants initial every page of my lease. I was given a lease from a friend who requires it, but it seems a bit like overkill. 

Do you require your tenants to initial every page of your lease, or just sign the final page? 

Can you negotiate the price of a new house (as in new construction)? A builder is building houses in a new neighborhood and it looks like they currently have houses built waiting to be sold, some of which have been on the MLS for 30+ days. Is it possible to get one of these for a discount (of course I don't mean anything crazy), or are new builders generally firm on their prices?

I am considering purchasing a new home as a buy and hold investment in an up and coming area of Houston. The house would cost between 200k and 230k, and the rent for would be between 1600-2000 respectively. There are a few reasons I am considering this:

1. The property is experiencing a boom as people move further and further out of the city.
2. The property is in a great school district. 
3. The property taxes are almost half of what they would be in the other parts of the city I normally purchase in ($2k vs $4k)
4. The new house theoretically will have a considerably lower cap x cost than the 30-60 year old homes I normally look at. 

There are a couple things that I'm not sure about though:

1. The house doesn't meet the 1% rule (it will after my down payment, but not before)
2. This neighborhood has a decent number of other rental properties in it already. I don't know if this is good or bad.  

Any advice would be appreciated. 

@Jonathan G., it sounds like we are on the same page. As I said in my original post, my current thought is that I would keep sending them letters regardless of what they ask, in case they change their mind, but if they specifically ask me not to text or email them again, I would comply with their request. That means that I would not keep calling and texting them after they have asked me to stop. 

I'm realizing that I should have probably clarified my question better. What I was really asking is if I should continue to send them mailers, not text messages or emails. 

@Michael S., I think ring less voicemail and text messages are becoming very common. One of the recent BD podcasts had a wholesaler on who actually just started a company that will cold call your list as well. I personally get calls, text messages, and voicemails periodically for our properties.

Just curious, do you have experience finding unlisted properties through marketing campaigns? If so, do you exclusively use letters/postcards? 

@Sylvia B., I'm targeting a very specific circumstance that has a short time frame. By time my first letter is making it to the owner, their eviction is close to being resolved in court. If I sent 1 letter every month (which is what I'm doing for my other list), letters 3-6 would arrive after the owner has finalized the eviction, repaired the property, and possibly leased it out again. That means that they are no longer distressed, which also means their likelihood of selling will go down. 

I leave the door open for this approach to be wrong though, as clearly I am still learning. Do you have first hand experience targeting this type of distressed property (evictions), and what did you find worked for you? 

@Aaron K. That is weird. I feel like I just heard on one of the recent BP podcasts that they have closed deals with people after they have been told no in the past. I need to go back and find that podcast to listen to it again. 

I have started a small direct mail campaign targeting landlords who have recently filed an eviction. Luckily, I am easily able to get the owners name and address, and often times, their phone number and email address. 

My plan was to send out the first letter, wait 2 weeks, and then send out another letter followed up shortly by a text message (I am currently at this point). After that, I would send them one more letter 3 weeks later, followed up shortly by an email. 

My question is, when do I take someone off of my list? If someone tells me that they are not interested in selling their house, should I take them off my list? What about if they specifically ask to be removed from my list? 

My current thought is that I would keep sending them letters regardless of what they ask, in case they change their mind, but if they specifically ask me not to text or email them again, I would comply with their request. What are your thoughts? 

Jason probably has more experience then me in this, but I generally disagree. If appraisals were as much of a science as people suggest they are, then they wouldn't be the thorn in the side of as many investors (and home buyers) as they are. The reality is that if you hired 3 different appraisers, they would probably come up with 3 different appraisals for your house, even though they would all have access to the same data when crunching their numbers. 

I do agree that spending an excess amount of money would probably not provide a good return, but ignoring something like landscaping (which can be spiced up for a few hundred dollars), seems like an invitation for a low appraisal.  

One major benefit of using your money for the initial purchase is the reduced expense. In my market, hard money lenders are charging 2-3 points upfront and 12% on the loan. That means that if you buy a $100k house and it takes you 6 months to rehab it and refinance it (some banks won't refinance before the 6 month mark), you will spend around $9000 just to the hard money lender. By using your money, you assume the risk, but you also shave a good amount of money off your project. 

With that said, it also depends on how many houses you are planning to renovate at one time, and how much capital you have available without using a hard money lender.