All Forum Posts by: Tom R.

My tenant is moving on short notice with 5 months to go on her lease. when am I required to return her deposit?

I just got another hard inquiry from my latest deal. This is the 5th one in just over a year. It's started to impact my credit score. I plan on buying a lot more rental properties. What do you do about the inquiries?

Originally posted by @Chase Cline:

@George Pauley lol yes the pucker factor is always a great metric! I think I will take this method for now and once I get a team maybe I will have them do all the bank accounts, forming, etc.

@Derek Janssen didn't think about it that way, great point. Definitely something to think about.

@Michael Plaks I have never heard of a Series LLC before, I will definitely have to do some research on that. Thanks for the response!

@Tom R. I see your point, but it would suck to really start making some headway and then one "accident" cause you to lose everything simply because you didn't take the time and spend $200 to incorporate

 I get what your saying Chase but the odds of someone suing you are actually very low if you are running an honest business. The best thing you can do to protect yourself is to get a rock solid lease and good insurance and make sure you keep your property maintained and provide all the safety equipment required by law.

I only own one property atm and I don't even own the house I live in so I don't think the risk is worth the cost but once I get a few more properties I will definately get an LLC for my properties.

There are bad neighborhoods and then there are BAD neighborhoods. A low income neighborhood does not necessarily mean high crime rate and high income does not mean low crime rate. You can usually find crime rate maps online for most cities but they usually dont do a good job of differentiating between some neighborhoods in my experience. My home town has the same crime rate over the entire town according to one map. Its best to look at the actual police logs to determine the crime rates.

That being said I believe you can actually make more money in the lower income areas but you have to pick the unit and the tenants carefully.

I see no point in that but I would keep all my properties under 1 llc either. I wouldn't even form an LLC until you have a substantial amount to protect.

I just got my second property under contract. I purchased my first property about 10 months ago when the market was more buyer friendly. Currently old houses in my area are going for nearly the same price per sq foot as new houses.  I would have to talk the seller down 20 - 40k to make any money in most cases. 

To find a property at a good price I had to go off market. This one I got lucky on. I told everyone who would listen what I was looking for in person over the phone through email and on social networking sites. I would drive through different neighborhoods on my way to work compiling a list of distressed properties that I intended to try and track down the owners and while I was doing that someone contacted me with a house that they wanted to sell.

The property needs roughly 15 - 20k in repairs but once done the property should have about 50k in equity.

I am trying a mix between the house hack and the brrrr on this one.

I am purchasing the property as a primary residence and will live in it as I make the repairs. I might rent out a room in the house once I get a couple of bedrooms a bathroom and the kitchen finished.

I will move out and refi to get my initial investment out once I'm finished with the majority of the rehab finished and then rent out the entire property.

Hopefully by the time that's complete the market in my area will be more forgiving.

I got a third credit card about a month after closing. I only got it so that I could take advantage of the $100 discount they were offering. I didn't really plan to use the card after that. The card doesn't offer points or rebates but occasionally they do offer 0% interest for up to 24 months at the local home improvement store which will come in handy on my next house which I just got under contract. It needs a lot of work and if I can put some of the materials on the card at no interest I won't have to worry about running out of money before completion. A great thing happened when I got that card. My credit score went up by 8 points. Im not sure if it was the house or the card that did it but I was pleased to see a positive change.

It's capitalism. My personal goal is 6 figures of passive income so I can retire from my day job. I've estimated it will take around 30 doors at my current cash flow numbers. But I am enjoying the hunt and I will likely continue buying properties after I retire.

@Mark Winter The roommate addendum states that both are responsible for the total rent. So if one pays and the other doesn't I believe I can evict both. Its california so I'm not 100% sure how well that holds up.  

Unfortunately he hasn't given me any reason to evict him. When I get a new tenant to replace the one leaving I will have a new lease drawn up and make sure it is iron tight.