All Forum Posts by: William Baumann

From my own personal experience, remember this one phase as sad as it is "Nobody can screw you over worse than family"

I know your trying to help, but mixing family and business rarely works out well.  Remember your going to become his landlord, not just be his brother.  people's view of life gets distorted and weird (not in a good way) when family gets involved. Lets look at a quick scenario:

Brother has a bad day at work, normally would just suck it up and call it a day, after all he has bills and rent to pay.  However, you are now his landlord, and his dear older brother wouldn't just put him out on the street, so instead of just brushing off the bad day, tells the boss to stick it and gets fired, and now can't pay rent. Dear older brother wouldn't put me out on the street, so he feels he has all the time in the world to find a new job.

Now your on the hook of either evicting your younger brother (if your parents or other family are still around, you can bet that won't go over well.) Or you now get to support your bother paying for everything out of your pocket.

Yes, I know, we would all like to think that family wouldn't do that to us, but they will and often do.  I just went through this literally the past month renting out a room in my house to family. Needless to say, it is not pleasant, hurtful to everyone involved, and just an overall mess. Don't do it.

@Ned Carey They are wanting the total project cost to be 30% ARV, meaning purchase has to be around 15-20% and rehab cost 10%. They are requiring a 70% profit basis and if the property needs for than 10% they require that contingency be included in the total cost. That pushes the purchase price to like 5%-10% of ARV. I have never found a property that sells that low, no matter how bad of a wreck it is, even condemned building don't sell for that. Therefore I am always way out bid or can't even come close to fitting the rehab costs into the the requirement structure. I just don't see this as possible.

Popcorn Ceilings, depending on the year of the home can help you figure out if you have an asbestos possibility anything after 1980's you usually good.  You can send a sample to be tested and find out if you have asbestos, there are also test kits at home depot for like $50 and you can test it yourself.  If you do, DON'T TOUCH IT, in most states (not sure in CA) you can just seal it and disclose, otherwise your will need professional remediation to remove it (approx $1500 per 1,000sq ft).  DO NOT try to remove it yourself, it is against the law for one, can extremely dangerous for second, and you could invite a wonderful EPA fine and lawsuits by the neighbors that you expose to airborne particles. Not worth it. Better to check it out, and get it taken care of properly if it is.  

You can get the DIY version here http://www.pscleanair.org/library/Documents/asb-popcorn.pdf

If it is not, a simple water/soap mix spray on the ceiling making sure it gets good and wet, the popcorn material will soak up a lot, you want it wet, then just scrap with a putty knife.

@Matt Good That is great!  I hope it works out for you!

I seem to be having an issue I am not sure how to solve or if I just need to suck it up.  Basically I have 2 PML for fix/flip that agree to lend 100% up to $100k  for a 60/40 split.  (they get 60%) which I am grateful for as I am new with no track record, but have yet to find a deal that will fit their profile. 

My issue is that their "Deal" requirements are so out of line with the current market that unless I get extremely lucky, I don't think I will ever find a property that will meet their requirements. There requirements are nearly 30% of ARV regardless of the property type, (foreclosure, fsbo, hud, etc.). That is just not realistic IMO. I have tried talking to them about increasing their risk profile to allow up to 65% ARV but they say they would rather not do a deal than have the higher risk.

Now it makes no difference to them as they invest with other investors across the country, it is just kicking my butt. As a "starving" investor, I don't have the reserve funds for HML's.

Should I continue to try working with these PML's or do I need to just change gears and look at wholesaling, or something?  I really need to get a deal going as I only have about 2 months of reserves left before I am going to have to take another full time job and only do investing part time.  I am getting frustrated and my wife is getting discouraged that investing is something that I can/should do.

I agree with @Bill Jacobsen your going to need a more detailed analysis on the property cause the first glance look says no.  

There is an interesting post discussion on this topic that I started here 

Mentor Challenge

You will learn some insite as to why your OP didn't gain much traction.

@Mike Nuss gave you some great information and leads, take it, goto the meeting.  Your fortunate that they have meeting every week, the ones near me are monthly and if they feel like having it.

humm, good question. My instincts says DEPENDS. Transaction of money changing hands without a signed contract in it'self is not binding, however with the email statements it might be enforceable, but your playing with a gray area of contract law IMO.  If your really want to fight the position, you are going to need to consult an attorney.  

Other than that, what is the renter worth to you?  Depending on what their rent is, at least you have a guaranteed rent income for that duration, and I would prepare for them to probably leave once the money runs out.

 I can tell you exactly why.  Because most of the Guru courses dole out just enough information to get you interested and then tell you it will be another $1200 to find out what to do with it, so they skip that bit of ridiculousness and pray they can figure out the rest on their own.  There are few step-by-step resources that actually cover a real estate transaction from Nothing to money in the bank to educate them.  Like a real estate investing for dummies book.  (Note: might want to check that, there actually might be that book out there, oddly I have never looked) 

Correction, I just looked and there is.  I wonder if it is any good.............

@Ross McKenzie Squeeze page is just a term like ROI.  You wouldn't put that as the title of a page or a link. I have "squeeze" pages throughout my site, however mine are all passive.  Meaning they are not forced on the visitor.  IMO, forcing a visitor to fill out information is a worse contact lead than no lead at all. Your just wasting time with spam at that point.  I feel passive "squeeze" pages provides quality contacts as only the people truly interested in what I have to offer or wanting information are the people filling them out.

PPC advertising is an expensive way of advertising that does work, however don't confuse it with SEO.  They are two separate things.  SEO is the keyword coding of a page to generate higher rankings in search results.  PPC is advertising for visitors to goto your page.  There is a lot of things I don't like about PPC, and one of the biggest is click fraud. This was super prevalent years ago, not sure how bad it may or may not be anymore.  Essentially,  companies would pay people just to click on these ads to generate money for the company, and cost the person paying for it tons of money. 

A more productive way I have found through trial and error with the 2 other businesses I run, is via newspaper ads (electronic or paper), and facebook ads.  Both have had a better response per dollar spent.  I even once hired a sign holder for 1 day for $100 and got more calls from that, than I did with the same $100 spent on PPC advertising in a Month.

PPC is difficult because your going up against major companies that have budgets of thousands of dollars per day, or that are willing to pay up to $10 per click.  So unless someone was searching for you specifically, your ad just doesn't show up until page 15 of their search results, and by that time, your website should already be showing up.  

I recommend to spend a little money on the SEO side instead of the PPC side of things.