All Forum Posts by: William Anderson

Sohel, 

There is no problem buying an investment property before you buy your primary home.  Investors do not care about this.  When you do buy your primary home you may have to show proof that the rental is being rented if you expect to use first-time buyer programs.  Even with this, you can do a first-time buyer after a couple of years.

I am from California and it's a lost cause for investing unless you just have lots of dollars you want to park and are not concerned about the new zoning rules that permit building additional homes on existing lots even in dense housing projects.  Also those taxes, well you know the story.

My last Phoenix investment property was sold about three years ago, I still get frequent calls from wholesalers who want to "buy it".  The market is getting very cool there.

If you want to try another market, look at the Mississippi Gulf Coast. I have a listing for a 2x2 that the seller wants to get out quickly. He just asked me to lower it to $78k. Rents about $1,100-$1,200 and it's in a good place for an STR. Just an idea about some of the values. Yes, this one needs about $20k in work but still a good buy. There are many more. And's warm here.

Oh, one last thing.  Be sure that the contract or an addendum includes the deposits.  This is often overlooked.  I can tell you horror stories about trying to get the deposits after closing.

You should immediately speak with a property manager who because you will be hiring them, explain what they will do on day one.  Most states consider these as "holdover tenants", that is, with an original lease in place when it expired they just stayed on.  They became a month-to-month tenant subject to all rules that you apply at the beginning of the next period e.g. 30 days after you give them notice that they will be required to sign a long-term lease or vacate.

I agree with others, tell them to leave,  I have one like that now and I am in the process of selling the property.  I was upfront with the buyer that the tenants were pigs.  The buyer will evict them when they close.  

Last year I bought two houses that had month-to-month tenants.  The seller gave them eviction notices at my request so we could get moving when escrow closed in a month.  They were out the day I received the key.  Every state has its own rules and the best way to find what to do is to speak with that property manager that I mentioned.  

Allison, your agent is probably correct, from what I see this is minor and can be fixed for a few hundred dollars.  I am guessing that she recommended you get a quote and try to get the seller to pay for it.  Your agent knows of contractors who can go over the home inspection report and give you a quote.

I just sent a home inspection report to a contractor for an estimate. I also made a video of the entire house inside and outside focusing on the issues so that the contractor could gain some perspective. I own an STR that was built in 1880, we just discovered active termites on the floor and replaced it. That's life in most of the U.S. There may be more hidden damage from past termite infestations.

You may want to have the bait station system installed "Sentricon".

If you want to learn to become an excellent agent and stick with Real Estate as a career, go with a smaller firm where the Broker/owner will spend time with you.  The initial course does not by itself prepare you.  It takes time to gain experience.  You can move this along faster by working with the broker.  Yes, you can hang your license on anyone's wall along with dozens or hundreds of others and hope you will learn or.....

Create a spreadsheet and break it down.  The one I use is divided into four weeks for each of 12 months.  One set of numbers for the nightly rate

The next set for the number of rental nights and the last is the total.  This permits adjustments by week.  On the Mississippi Gulf Coast, our season is year-long with bumps in June and July.  We have lots of events that can raise the rates and occupancy for three to seven days at a time.  Then we have the holidays.  For my market, there are no averages.  You can grab the total revenue for the year and enter it into the BiggerPockets calculator or others.  If your rate is the same all of the time, that's easy. 

You must see the monthly picture to see if you have to shore up your bank account for low volume and rate months.  The more data you have the better you will be as a business manager.  I am revising my sheets for my course now, when it's finished, I will make them available.  

I know that this is late because that deal is probably done.  I strongly suggest you work with a realtor.  Yes, there are lots of people who love the idea of walking up to a seller and cutting a deal.  Remember, you are not paying your agent.  Even most FSBOs will pay your agent a commission.  If you are working with a good savvy agent with investor experience they will be in a better position to negotiate for you.

Should you have engaged a good agent, you would not have had to visit this forum to get your questions answered.  Your agent would have formulated a plan based on their knowledge of your situation and the property.  You would be surprised how often agents know the sellers and their motivation.  

I am working with a client out of state to buy investment property on the Mississippi Gulf Coast.  Every property that he pointed out to me was one that I was familiar with.  I knew the owner or the selling agent or had been to the property or at the very least had investigated it for another client.  Partner up now so you are ready for the next opportunity.  

Kevin

If the property requires flood e.g. AE zone, you will probably have a heavy homeowners insurance bill with wind and hail.  Rates have increased substantially over the past few years.  I have many properties in X zones within one mile of the beach with rates that three years ago were e.g $1,400 and are now $3,200.  Perhaps Kevin can elaborate about rates but I only see one direction and that is up.

Luis, don't cheap out on the furniture.  Guests are hard on everything, particularly on beds.  If you use standard mattresses with box springs get steel frames.  If you use gel or foam mattresses, get solid steel platforms.  Buy separate headboards and screw them to the wall then the bed to them.  

Buy sturdy kitchen/dining room tables that are scratch resistant.  If you buy bar stools, don't get ones with backs, guests will break them.  If you get steel stools, crazy glue the screws in.  Try second-hand stores for chests that are made of solid wood. 

You can live in your own house for 10 years and never break furniture.  Put it into a rental and after one year, you will be repairing something.  That Ikea and similar furniture will not serve you well.  Watch wood chairs for tables.  They are nice and I have some but make sure they are well constructed.  

I have bought many mattresses from Amazon, usually foam, they are easy and don't create craters.  Leslie is right about going to the Facebook marketplace.  Also, when you buy appliances, e.g. Lowes, use a credit card that doubles the warranty.  Amex does this.

If you are buying a dishwasher, don't cheap out.  Get one with garbage disposal or you will be paying to unclog lines and clean up water.