All Forum Posts by: Troy Young

Do your homework first and go through a Title Agency and get Title Insurance because it can be a good deal if it's what you think it is, but you could end up basically owning nothing if you don't do your homework. 

Thanks for the wisdom and advice. 

I had a relative ask me for help in renting out a few of her places. I tried giving her some advice and told her to get a property manager. Later I figured since I manage all my own properties I would manage hers also. Things were going well and a couple other friends wanted me to manage their properties. I didn't mean to start a business but it is growing into one so I am now forming an LLC for it. I'm thinking about also taking the class and test to get my realtor's license. I'm looking for any advise as to if it would be worth it or not. I'm not sure if I would have to work or be affiliated with a broker in order to use or keep the license or if there is much work to maintain the license such as annual fees, classes, affiliations with a broker etc.? Any advice is appreciated. Thanks in advance.

Buying the first one. I talk to many who want to have the cash flow I do but they are too scared to buy their first one. 

For most people, I think buying a house to live in is a great start. With no money and without good credit you may still be able to find a seller financing deal (land contract or rent to own). Some sellers will accept low down payments or no down payments if you take it as is and fix it up. If you fix it up while living there you can build your credit, increase the value of the house and hopefully get a loan in 6 months or a year or so on it for a lower interest rate. I had a bank give me about 3 times the amount I paid for the house I was living in and that allowed me to finish fixing it up and buy a few others. Plus if you live there a couple years you can sell it for a nice tax free gain. 

Your taxes and insurance seem low. Are those your actual numbers or estimates? If they aren't the actual numbers you should check those to make sure the cash flow is as good as you think. Also, are they vacant or rented? If rented I would want to go through a copy of the lease and see if they are locked in for a month a year or what? When you go through the properties you should get an idea of what you will need to fix right away; what you will need to fix when the tenant moves out; and what you may have to fix in a year or two. That will help you determine how much you need to have in reserve. If everything looks decent I would say keep at least $5,000 available for when one moves out or you have to put a roof on or some other large expense.

I love social media for business. Every time I have a house available I'll throw it on my facebook page but I also have joined a couple other facebook pages that are specifically for people looking to buy, sell or rent a house (one for the county and the other for the city). So if you find a page like that even if you aren't very active and don't have many facebook friends you can still gain the exposure. If you don't have any pages like that it may be good to start one.  I usually get about 5-10 responses from facebook in the first day or two. I also throw stuff on craigslist and postlets and get a couple from each but facebook brings the biggest return to me. All of them are free and I only need to find one willing to make a deal which so far has happened every time. 

I started off buying a house for myself. I used a realtor that was referred to me and asked him some questions that I had to get me started. The house needed some work so I did what I could and hired people (friends or referral handymen) smarter than me to do the things I didn't know how to do and I learned from them. When I found people looking to rent my house I asked a friend who had rentals about what to put in a lease and steps that needed to be taken. As I went and ran into needs I found people to meet those needs and as I found people to meet those needs better I added them to my team. I started with a realtor then added, handyman, a lender, an investor/landlord, an accountant, and an attorney. In time I build up more handymen/contractors (different ones for different needs as well as back ups) and other realtors for different areas, as well as other bankers and private investors to help with financing.  As the business grows my team grows and usually out of a need for another member. 

A few years ago buying for $15-25k would be rented for about $650 now they costs about $25-35k and rent for about $700-750

I love debt. I usually use financing when possible but there are times when it is better to pay cash. If a place is not in a condition where a bank will finance you may need cash. If it is a quick flip you may not want to pay extra charges associated with financing. If you need to close this deal asap cash allows you to buy faster. But, If you plan to hold it for a couple years or more and can get financing I would take the financing and invest your money into something making a higher return than what you're paying for the financing. If somehow you can't find a better return pay cash (you should easily be able to find better returns though). The other part is just your personal feelings. Some people hate debt and if it's going to really stress you out pay cash for it.