All Forum Posts by: Account Closed

@Jonathan G. 

If you look under the "analyze" tab at the top of the page you can get some help there, you can get a few free analyses even as a free member on BP. I think under the "Resources" tab, under "fileplace" you may find some spreadsheet to do analysis as well.

If you starting out to learn about analysis of rental properties, you want to know terms like "cap rate", NOI, the 1% (or 2%) rule and the 50% rule among others. These are great ways of looking at the numbers of a property before making a decision. And note... Rules are just guidelines.

To you question, you will need more than gross annual rent and taxes. What about vacancy, maintenance, property management fees (if you're not going to self-manage). You need to do due diligence on their rental records, tax records, etc.

Ok, now I feel better. Thanks for the crazy stories people! @Jim Viens , @Arlan Potter 

and @Christian Carson .

The internet is a wonderful thing. I had to find a previous owner of a property to clear a title some time back and its amazing what you can find on the internet. There are several websites that enable you to hunt someone down.

When you find him, he may have his reasons for wanting to be missing. Can I suggest maybe sweetening the deal and offering him a couple of $$ to sign things, remain missing and not hold up the deal.

@Jamie Montpellier 

These are my thoughts and what works for me. Not saying "do what I do" but just offering this as ideas:

1. Together with your normal monthly savings aimed at buying new properties (see point 4 below), you are now add $100 to that amount. Put those savings in a place where you earn more than your current mortgage interest rate (2.6%) + inflation.

2. If you can't earn that much return on an investment, then do Option 1 and pay down your mortgage quicker. Once you've made the biggest dent you can in that mortgage, refinance it to reduce your monthly repayments even more and increase your $100pm for the door.

3. If you're making $100 for your first door, aim to do better on your second. I always use my last acquisition as the benchmark for my next acquisition.

4. I'm a supporter of the extreme savings method (google it, its a thing). You have to want to buy your second property more than you want all the things you spend your salary on every month. Analyse all your monthly expenditures. Figure out if you want your second rental unit more than you want cable, gym membership, a new car, etc and cull your expenditure accordingly. I worked my monthly expenditures down to 50% of my salary and I'm ruthless in my goal to sve money to buy more rental properties.

@Ned Carey 

Believe me, I was mad enough. I did research it and in NY state I'm not able to file a complaint against a lawyer if my complaint is about something he did to someone else. I have to be directly affected.

I did ask the family when I went to their house to get the quit claim deed signed if they had considered filing a complaint. They said they had thought about it (because he had done several other egregious things besides the little matter of putting my property in their trust) but they come from a very tightknit community (they're Greek, the lawyer is Greek, the lawyer was a former family connection and was recommended by the priest at their local Greek Orthodox Church, etc, etc) and they came to a point where they just wanted to move on. Sorting things out with this lawyer had taken more than 4 years for the three estates to be closed and they were traumatized.

Look up @Darren Sager - he is organizing the upcoming meet up. I think you have to RSVP on his thread.

There is so much to learn on this site. I love the podcasts too.

So here is my weird story. I buy and fix up a condo and put it on the market. I get a great offer from my first showing. I accept the offer subject to the buyer getting financing and I sit back and wait for the closing.

The closing date is set and I get ready to move as the condo has to be vacant on closing. My lawyer calls 3 days before the closing date to say the title insurance company won't insure the title because there's an issue. Well...

I had bought the property from a woman, her husband had just died and she was also sickly. Some time after I had purchased the property, her daughter dies in a car crash and she herself dies from an illness. Very sad story. Only the son, 18 years old, is left to sort out the three estates together with his aunt who is an executor.

The lawyer handling the three estates is either grossly incompetent or just plain crooked. He advises them to create a trust and put all the money and all the assets into the trust. Probably sound legal advice but then he proceeds to file paperwork at the court to put my property into that trust. To note, he does this a full year after the property had transferred into my name. I repeat, when I purchased the property I took over a clean title, a year later, he put the property that I bought into the family trust. Also, he was the lawyer that did the closing for the seller when I bought that property - i.e. he personally knew that the property had been sold and was no longer owned by the family.

While no one was actually claiming they own my property and no one was trying to take it away from me, the title insurance company won't insure title as it isn't "clean" so I need to get the son (the only remaining heir) and the aunt (the executor) to sign a quit claim deed. Of course, the lawyer (who set up the trust) is not willing to help (give me a phone number or an address) because then he would have to admit to being a crooked idiot. 

That being said, the closing was booked and my buyer's mortgage offer from the bank was expiring. He had just gotten a large cash gift from a family member which he had deposited into his bank account (against his realtor's advice) and would not be able to requalify for the mortgage if his offer expired. And, I'd signed a lease on a rental apartment, paid my deposit and a broker's fee and had the movers booked for my move the next day...

I became an instant private investigator. I called all my neighbors (the previous owners had lived in the neighborhood for years), I called the sellers agent from when I had purchased a few years before, I signed up for memberships on background screening websites. I pretty much hunted these people down, persuaded them to let me come to their house on a Saturday night with a notary to sign the quit claim deed and was able to close on the Tuesday. If I hadn't been able to find them, or if they hadn't agreed to sign the quit claim deed, I would be unable to sell my property to this day.

Undoubtedly, my most stressful closing ever. I feel so sorry for that family, their lawyer totally screwed them over and they lost a lot of money paying fees for unnecessary services and he tangled up their lives at a time they were most vulnerable. 

@Abou C. 

I think its fine to talk to tenants. Typically, the places I look at already have tenants in them and typically the tenants are there when I go for a viewing. They're there, you're there and if you're polite and friendly they're usually willing to talk. Current tenants can give you great information about the property such as maintenance issues or issues with neighbors and the neighborhood.

@Anthony L. 

Treading water may be a euphemism for "breaking even". If something is costing you 6% per annum and you are only making 5% per annum, you are barely breaking even.

There are some great resources on this site for helping you to analyze property deals. See the "analyze" tab and also the "resources" tab where you can look under "file place" for some great spreadsheets.

I've spent a few hours this weekend learning real estate math and I'm feeling very empowered. Its a great tool. When you've seen 20 houses, you don't remember the details. Putting the numbers in a spreadsheet so you can compare them side by side takes aesthetics out of the equation and focuses you on the numbers and the investment potential of a property.