All Forum Posts by: Walter Key

Patience and persistent are your best friends. You don't need to wait it out. You just need to be patient and continue looking for the right deal. If that means you do one or two deals in the same time frame that you hoped to do four or five deals, so be it.

Shaun hit the nail on the head.

If I may add my $.02...

Kitchen

Baths

Flooring and Paint (these are really all about number ONE on the priority list)

Fixtures, receptables, smoke detectors, vent returns, etc. (These "little things" will make an older house look and feel new easily and with a very small investment of your capital)

Landscaping and exterior paint/pressure washing. Curb appeal gets the buyer to the door!

16.5 years in the Navy here! For you "youngins" that are just starting out, let me give you the advice I wish I would have gotten 10+ years ago. BUY every time you transfer. Use your VA eligibility first then move on to NFCU's Active Duty Choice program. DO NOT miss an opportunity to purchase a property for nothing out of your own pocket. Be selective; make sure you buy knowing that a few years later it's going to be an investment. Don't overspend and don't fall in love with a "home" that you know is really just an investment in the making. Buy something you can live comfortably in but that you have room to add some instant equity to by touching up little things over the time of your tour to increase your re-sale and rental potential. Best of luck and thanks for serving!

I am in your situation. I have a property in VA but I currently reside in FL and at the moment I'm deployed (Navy). Let me be frank...it's a pain in the @$$. The only reason I'm not using property management is because the property is in an area with practically no rental market and thus no property managers and because I'm barely breaking even on the deal as it stands (rented it out of necessity after having to transfer and I couldn't sell it).

Now, if you really want to go this route, here's what I highly suggest you do…

Establish a list of at least 2 people that you trust and that live in the area of your rental. List them as trusted agents on your lease and have them help with the inspections, etc. You can work out whatever payment arrangement you want, if any, but having someone local that has the stated authority to enter the premise on your behalf and conduct check-ups, move-in/out inspections, etc will go a long way to helping your sanity level.

You should also set up a means for them to automatically transfer the rent payment electronically. This is as simple as their bank setting up an outside transfer to your account. Very easy. You could go a PayPal type route as well but then you're looking at fees that you can avoid 9 times out of 10 by going directly through a bank-to-bank transfer.

Another thing I recommend is to take out a home warranty on the property. Traditionally, you'll be looking at $50-$60/MO as a premium and a $75-$100 deductible for a house call. It's cheaper than a 10% management fee every month (unless your rent is super cheap) and it gives you some professional resources to have on call. If a $500 appliance breaks, you're out $75-$100 for the house call and they either fix or replace the broken appliance.

If you don’t want to have to pay a premium every month then you need to build a network of maintenance folks to be ready to assist when needed. If a pipe bursts, what plumber would you call? If the refrigerator stops working, what maintenance person would you call? Think through the possible situations you may face and identify solutions for them before they happen.

Managing the property yourself from afar can be annoying when things go wrong but with a little forethought and the right network in place, it is doable. Hope that helps.

I'm fairly new to the world of commercial lending. Up until this point I've had the same great credit union for 20 years and I've always bought my homes through them. I have 4 properties at the moment, all of which are SFHs (Primary and three rentals). I was considering the pros and cons of going to a commercial lender to wrap those SFH conventional loans into one commercial loan.

Two of the rentals are in one state and the third is in another. I wouldn't think that would make a huge difference but I'm not entirely sure. The two properties in the same state are in a strong rental market and are cash flow positive while the equity continues to build. The third is not in a great spot, is much larger and more expensive then the market supports and is for the most part, cash flow neutral. I'm breaking even. If I was to combine all three, the DTI ratio would not be amazing since I've used 100% financing for all of them. For example, the combined mortgages (PITI) are about $3560/MO. The combined rents are about $4475/MO. That's about 79.5% DTI.

The interest rates on all three are very good (between 3.5%-4.25% on 30 year fixed). I intend to make my next several investments fix and flips as opposed to long term rentals so I don't intend to acquire any new mortgage loans in the near future.

So, my question for those that are smarter than me is simply...what would the pros and cons be of wrapping these three properties into one commercial loan? Would it even be worth the effort? Would they qualify with that DTI?

Thanks in advance friends!

Risk vs reward. I think the risk is certainly higher in general with young kids, lots of whom want to party and haven't yet learned how to respect other people's property. Of course, if you screen your tenants VERY well (harder to do perhaps with potentially zero rental history to work with) and you rent to young but mature college students who DID learn the value of money and property, you potentially have a 4 year tenant on your hands. I think in general the stigma of young partying college "kids" keeps many investors away. Just my $.02

In my opinion, being an investor is not a matter of having or not having a particular skill. It's about having or not having the right attitude, risk tolerance, etc. Now, that's not to say that being a better investor can't be achieved by acquiring more skills and broadening your knowledge base. You've got to. But there are some untangibles that play into whether a person will or will not ever become an investor. Born with it? Hmmm...maybe. But still something a person can acquire along life's road if they weren't. Just my $.02

All else being equal (cash flow, ROI, etc) I prefer a 3/2 over a 2/1. More flexibility in my opinion. Single guy or gal looking to eventually grown into the home, small family needing a place to settle down, young person looking to take on a roommate, etc. I think there's a larger variety of potential buyers or sellers with a 3/2 over a 2/1.

But again, that's "all else being equal". In realty, I like the best deal, regardless of the type of property it is. 

If the home is listed on the MLS, make an offer to the Realtor. Don't contact the family directly but also, don't feel bad about offering the price you want. Worst case, they say no and you move on.

@Tisha Doyle Welcome! There is a ton of great, FREE, training and resources here at BP. Check the "Education" and Tools" tabs and read all the great forum topics. Don't be afraid to ask questions. 

Lastly, how's Joplin these days? I lived in Springfield for years as a kid and had friends in Joplin for a long time.