All Forum Posts by: Tom R.

 I manage my own property for the time being.

 Well in my area everyone charges 50% to fill a vacancy and a 10% management fee.  

Someone called me this morning claiming to be from a property management company with an too good to be true offer.

The offered to fill my vacancies for 3.45% and manage my properties for less than 3%. No one charges that little. They had a area code based at least 2 hours from my properties. The num ber 714 and 942 and 2751. If posting this is a violation of the rules please feel free to remove it. Im just trying to warn people of scammers. This scam was pretty obvious but some might not be. Be careful. 

I like my job but there are plenty of things I would rather be doing. Hobbies like Trout fishing, model making, and traveling don't pay much. 

Yesterday I went house shopping with my brother. He just got a new job and is moving to town. The house he chose was one of the nicest houses I have ever seen. By contrast I live in a trailer park with my friend who drives me nuts most of the time. The master bath in the house my brother chose is larger than my bedroom and his closet is the size of my kitchen. While my brother makes at least $30k/yr more than I do I could actually afford to buy this house. 

I am tempted to buy myself a nice house so I can live in comfort but I when decided to invest in real estate more than a year ago I wrote myself a why statement. I thought sharing it today would help keep me motivated on my path to financial independence and maybe it will help some of you who are starting out.

I grew up very poor. As a child there were times that my mother didn't eat so that I would have enough.  People like to say money doesn't buy happiness. Its obvious to me that those people have never truly been broke. I wasn't very old when I knew I wanted to live a different life than my parents lived.

I was a late bloomer. I didn't start my career until I was 35 years old. It didn't take long for me to figure out that if I were to retire comfortably the way I wanted I would either have to work into my 70's or I would need another source of income. After reading I don't know how many books on investing and financial independence I decided real estate was the answer.

My life's goal is to retire while I am young enough to appreciate my retirement. I want to live in a nice house on some land ideally with a place I can go fishing. I want goats and chickens that will provide fresh eggs, meat and milk. To sustain this I want 6 figures of passive income.

To achieve this I will buy rental properties. I've started out with one house which cashflows over $3000 a year. At this rate I will need over 30 houses to meet my goals. I am in the process of buying my second but have hit a road block. One of the sellers died last week meaning we cannot close until either probate is over or a judge approves the sale of the house. At my current income I can afford to buy 1 house per year. 30 years is too long so I will either need to find houses with better cash flow or I will need to find another source of income to buy these houses.

I don't see that as the lesson. My lender would not approve the loan without the repairs and it would have cost far more than the $1000 I spent to have a contractor do the repairs. By offering to make some of the repairs myself I got the owners to agree to pay for a larger portion of the other repairs than they would have originally agreed to.  The remaining owners still want to sell the house to me and the house can be sold under probate it just takes a judges approval which could take time. 

After licking my wounds I determined that the lessons I learned were.

1. Lenders don't like peeling paint and water damage. Get them fixed before appraisals so you don't have to pay twice.

2. Obvious code violations are a no go no matter how minor they appear. 

3. I learned a lot about different types of loans trying to get the sale to close without having to do the repairs before closing. We eventually decided to do a escrow withhold to cover the roof and gas line repair but any repairs not being done by a licensed contractor had to be completed before closing.

4. Keep track of the time spent doing repairs. I don't know how long I spent working on the house but it was at least 40 hours and one day I had 2 friends help me for about 5 hours each. If we were all being paid minimum wage that's $550 in labor. 

5. The death of a seller doesn't have to mean the death of a deal. It just take patience and respect for the grieving family but you can still close.

Ive been working a deal on a FSBO for months. I was purchasing a house in need of repairs for $10k under appraisal value. Most houses in the area are going for over appraisal. The underwriter requested several costly repairs be done before closing and the seller and I agreed to share the costs of some of the repairs and I would repair the eaves and the water damaged drywall myself. On Sunday I finished my repairs and yesterday had the final inspections. Then yesterday evening my realtor informed me that the seller died and there was no will or trust. I haven't tallied all my expenses but Ive got over $1500 and probably more than 100 hours of labor into this.

I could try to place a lean on the house but Im not sure its worth my time. I want to say I learned something but Im not sure what that lesson is at this time.

Update: I contacted corporate and they refunded the cost of the paint and apologized. I still wont be buying paint from them except for touch ups on houses that have their paints. When I repaint I will be shopping elsewhere.

This is pretty much the response I expected from the bigger pockets community. Less than 10% of you offered any advice or support. This is part of the reason I will never pay for pro.