All Forum Posts by: William Goodlett

What I do when I go into these communities that I buy in, I rent out the homes/units for less than the highest rents by several dollars. The reason is because I don't want to battle against other losing tenants.  I don't let my properties go down so Im not one of those that will give you lower rents for a exchange of not fixing anything. I buy my properties for pretty much nothing sometimes. Me doing this still allows families/people that qualify to live in the area that they grew up in or around. 

   Examples if rents are $800, I'll rent for somewhere in the high $600's. I can do this because unlike a lot of people I wont through top end things into my rentals and I do most of the work myself and I usually get my properties for $4,000-$13,000 and they usually don't need a lot of work. Some people including the city/county just look at a home and see that it's dirty and they say it's in bad shape. Most of them are solid homes that people give away or the city/county tear down. 

  I believe empty lots are worse than bad looking homes. Is gentrifying a area bad, well I think that if people want to keep their neighborhoods then they should not let their area go down. Take care of the homes. Yards are the first sign of an abandon home. People can volunteer to cut the grass. People can neighborhood watch and keep the crazy's from breaking into the homes. Keep kids from throwing rocks and breaking the glass. People can band together and buy the homes and split the profit or set up a fund and help out the elderly or homeless families. But people dont. They rather let people come in and buy up the area. Then send their friends and families over to ask what the rents are and then get mad when they can't have their kin or friends live near them. 

Do you think your going to marry her. I can see her not helping like you said but then wanting to spend the money. Don’t tell her she is paying rent , ask her to help with your payment. If she doest want to then ask if she can pay the lights and water, not either or. Maybe even throw in the tv/phone bill or Netflix. 

    Life isn’t far. Don’t let people use you. She needs to be there through the struggle if she wants to help enjoy the success 

Can anyone tell me what they know about the lexington NC market? I know Lexington is a well known city but there are a lot of families that are below middle class income. Found a lot homes for pretty cheap but wanted to get advice. 

@Tomiko Graves $15,000 is too high. You don't always get what you pay for like some say. That bathroom from the looks is very small. The price that I usually get is anywhere from $2-5 per square foot for tile. For those small tile on the bathroom tub every 6-8 tile are a square foot. Some people see that you bought a house and they see a opportunity. That close to a 84 percent mark up from the cost of material. Trust me when they start ripping things out they are going to come across "other" things and make suggestions on how they would do it to get top dollar. Are they putting up crown molding, scraping the ceiling to smooth it out,  repainting walls, doing plumbing because the vanity is going to be two sinks and have to move the toilet over now? 

  IF your GC can't do a better price than that then find someone else to do the bathroom. You can keep him around for other jobs. Also remember that he is not your GC. He is his own boss and looks out for himself first and second. 

  I know new tile looks better but investigate to see if putting in new tile around the tub is worth it and if other homes are doing the same. If you are the only one in a certain radius that is selling then I would leave them. You don't have competitors. 

I have property that I have bought for 8,000 (two of them), 13,500, 10,000, 46,000. So will I be taxed on depreciation of the purchase price or the tax value. The properties are all worth 50,000-90,000 plus. So do I calculate the purchase price divided by 27.5 or the tax value? And the 27.5 years. Is that for the period that I have the home or the age of the home? 

Mr. Auerbach thank you for your reply and insight. I think I’ll give the small banks a try this week coming. 

Do you think that I should still pay for the taxes for my business as far as the yearly DBA for the county or the taxes for the secretary of state?

Greatings

     I have been listening to Bigger pockets, Grant cordone, "Koncrete", Max Maxwell, local investors, Morris invest, Graham Stephen....etc. What I have found out is that there are different ways of investing. I have come to the end of buying rentals with all cash. I have 4 with another one coming. I'm getting tired of being stressed about using up all of my money or tying up all of my ends with the houses after I buy them. 

I created a LLC and created a DBA for the counties that I have my rentals in. I tried to get a hard-money loans but they messed up my credit and still did not approve me (just created a ton of credit cards and opened them for me). I tried to get a loan from a bank. The first time around I get , "we don't do single family homes, or we only give out loans for income properties during certain times of the year". Finally I get a bank that would try to do business with me. I was asked home long I had a E.I.N and to produce a schedule C. I did not have one yet and I need 3 years worth. They tried to talk me into do a refinance of my primary home. Then they asked me to one for the property that was the most expensive. I told them no for those two and that I would for the lease expensive one. The price would cover buying and fixing the home that I was looking to buy. They would not do it. I'm assuming because they wanted more money.

Should I use the BRRR strategy for the house that I make $680 a month and pay $368 total expenses. The home that I'm now looking to buy and rent out would be around $28k-$35k and should only cost me 5-6k if I'm able to fix it myself. I just don't like to lose leverage.

Is the BRRR a great , safe, idea or is there another method I can use?

When I've made a offer like this in the past I've tried to be open and honest. I let people know that I use to be a realtor and I know the market. I ask them if they are willing to sell their property and ask what is their price. Ask if you could look around the property. Don't let them know that you already have.After they tell me I then tell them what I'm willing to pay and why? (show them comps). 

   Once you start getting closer to a price that you like ask them to let you inspect the property have people come over and look at what it will cost to fix the property. Once you get a due diligence period (contract) the process can be shorter, well if your paying with cash. It makes the seller feel like your more serious and it may make them come down with the price and feel better about it. You don't want them to second guess their price and then change their minds. 

    I do try to be very honest with them about how bad the home is and how much it will cost to fix it. I do a lot of the work if not all of the work myself it never cost me the price that I say it will but I never know if I will need to call in someone to actually do a job for me , so it could actually cost me the price. 

   Realize that if you don't give a person the price that they want, someone people will get nasty, but remember your goals and that you are trying to make money and not lose money and they are trying to do the same thing. Try to get as close as you can to the price that you are willing to give for the property. If you don't get it trust me there will be others. 

   I don't know how much experience or money that you have but their are a few ways of buying homes. You can do rent to own, bank finance, use your 401k, hardmoney, family memebers, your own cash from savings or bonds. 

The 1099 form is for a person that is a independent worker. Showing that you (the payer) are not withholding any taxes and that they are not a full time employee of yours. You give them a 1099 form to also make sure that they are actually a real company (LLC) or not, so you can know if they are insured and being open with you, and if they should charge you certain price ranges. Someone that has something to lose or has a real license will charge more. They sign the 1099 and fill it out you can actually believe if they will give a warranty. The 1099 form doesn't need to be given unless the person is going to be given at least $600 for that year. The project may start off at $450 for a quick project or home repair and then they may have to come back for something else later in the year. They might refuse to sign the 1099 because the amount is not the $600. So if you get them to sign in upfront you already have their information and they might be more willing to not stiff you.

    A w-2 would be given to a full time employee. Showing that they are getting taxes with held, and insurance given, etc.

    The tax company that I went to said that I did not need a w-2 or a 1099 with their information on it. If I just take pictures of payments, and then when I go to do my taxes just write down all gains and losses, that is all I need. Don't know what I need if I get audited but I also keep receipts from every year. 

I would love to refinance and repeat if I could find a good enough deal to do so. I don't want to lose my leverage with the properties that I own free and clear. Are you thinking about rentals or flips and are you thinking about deals in NC or NY?