All Forum Posts by: Wyatt Franta

@Dan Heuschele

Hey Dan,

I just wanted to quickly thank you for fixing my analysis.

I try to be pinpoint in my posts and you helped catch my error.

I'll be using that link for future reference, and I'll see ya around the forums!

Hey Mike,

Normally, I like to layout timelines for BP forum members and step-by-steps as to how to go about things. However, I would recommend you get yourself a Realtor in this scenario. You're new to the game, which is where everyone starts, and you are going to want someone working alongside you from beginning to end. A one-off post on BP won't be enough to get you through an REO due-diligence process alone.

If you trust the members here on BP, you can search through the real estate agent directory to find one in your area. A good agent will have contacts in title, escrow, lending, contracting, etc. which will save you time and help to prevent mistakes if & when you find a deal with working numbers.

Good luck!

Hey Sebastian,

I haven't house-hacked, but the concept is relatively straight-forward.

Purchase a multi-unit property, live in one, and have the other tenant(s) cover the mortgage and/or bills associated with owning the property. They don't have to cover 100%, just whatever percentage of the overall cost you aren't looking to pay for.

When screening tenants:

• Credit scores are direct representations of a person's financial responsibility. There are outliers to this, but you will not meet an outlier. Be polite to all applicants, but don't trust a word they say. People talk, numbers show.
• 2.5x the rent is the norm for qualified applicants. 3x+ is great, 2x is generally denied unless credit history is spectacular and they have no other debt obligations. Even then...ehh.
• Pets are optional (unless they're ADA-approved), so if you aren't a fan of pets, don't allow pets.

When dealing with repairs:

• If you can, provide the other tenants with a list of handymen to call for all possible issues. Your number is for emergencies only. Malfunctioning appliances, defective TV, broken washer/dryer are all their problem. Busted pipes, gas leaks, etc. are yours. (This is just a suggestion, handle both cases as you wish)
• Don't offer to pay for problems you didn't cause or are at fault for. This will set the precedent that they can come to you for free work.

Feel free to connect with me if you have questions in the future.

Good luck!

Hi Neshyra,

It will vary by state law. In CA, your inspection clause allows the buyer to bring in inspectors to determine the condition of various portions of the house.

Home inspector inspects the general well-being of the property

Geo engineer inspects the soil of the property

etc.

In CA, buyers have 17 days to get all inspections done and sign off on the inspection clause. THIS TIMEFRAME CAN BE NEGOTIATED, MAKE SURE YOU READ YOUR CONTRACT. If you wish to back out of the deal due to an inspection coming back with results you don't agree with, you may do so and keep your good faith deposit. After the inspection clause has been signed, you can no longer back out for reasons relating to the inspection without losing your deposit.

I have no clue how Missouri real estate operates, so please consult with a local agent/attorney as undoubtedly our state laws will vary.

Good luck!

Hey John,

You missed a key term there...A certain percentage of their workforce. I'm hearing it's rumored to be a 25% reduction cap. Again, don't quote me on this, I'm still reading this thing. I'm only relaying what I'm hearing from others interested in the ramifications of the CARE Act. 

So, forgiven grants and low-rate EIDL's for corporations who promise not to cut more than 25% of their workforce? Say no more. Cut overhead, continue stock buy-backs, business will continue as usual for the big boys. The expendable employees will be out without anywhere to turn as no one will be hiring in anticipation of the coming recession.

Again, I must reiterate, please don't take my word here. I'm unfortunately only playing he-said-she-said at the moment. If you can find any info that confirms or discredits my comments, please let me know. I'm trying to get ahead on this as much as the next person.

In my opinion, absolutely. China is currently experiencing mass layoffs even though its economy is open for business. Another pandemic has appeared; diminishing demand. The U.S. will face this same issue once we get back to work. Global demand for goods has and will continue to diminish as the world tries to battle and then recover from COVID. The velocity of money will continue to decrease, and short sales + foreclosures will start popping up over time. 

I'm still reading the stimulus package (A cliffnotes version would be nice, GOVERNMENT...), but I've been hearing from others that corporations with 500+ employees are eligible for forgivable grants & Economic Injury Disaster Loans (EIDL) if they *promise* not to fire a certain percentage of their workforce, among other requirements. If this turns out to be true, I'm anticipating a blood bath. 

Please don't take that last paragraph as fact, and I would advise talking to CPAs, they may know more about the bill come Monday.

Hey Scott,

We're in a very shaky economy at the moment. In theory, as you probably know already, the market should have tanked given the jobless claims report that came out this week alone. JPow's pledge to keep the printer running 24/7 shouldn't have delayed the inevitable. (by the way, let me know if you're optioning any calls or puts next week).

Anyway, save your cash for the time being. Renters are in theory only covered for the next 4 months given the stimulus, AirBNB is dead, and appreciation plays are now depreciating in most markets. You'll be hunting diamonds in the roughest patches if you try to hop in now.

Hey Andrey,

I can't help but notice you've taken one approach to real estate investing and decided that's the end-all-be-all of successful portfolios. Forced appreciation. While that may work in certain states, you need to also understand your appreciation strategy takes the BIGGEST hit when markets collapse. Renters will always rent, but sellers will only sell when they're:

1.) Forced into a corner

2.) Have a sizable equity to cash in on.

When the next recession hits, you'll be forced to sit on worthless properties until markets recover. House prices in CA just reached 2008 numbers last year in 2019. If you invested here, you'd be stuck for over a decade before you even had an opportunity to break even.

You've also, by the context of this post, trashed the core investment strategies of Blackstone, NRZ, Fundrise and countless other REITs who undoubtedly would run circles around 95% of the members on this forum. 

It sounds as if you're just investing in real estate during one of the longest bull markets in the history of the US. You literally couldn't lose for the past decade, invest in something and you win. 

Regardless, I hope we all pull through this pandemic. Very few of us are going to be sleeping easy for the next few months.

I'd give her a break if you can afford it. There's no such thing as a free lunch obviously, but if she's busting her butt trying to get a temporary replacement job, offer to defer her rent one month. 

Amazon, UPS, and local grocery stores are hiring, so she should be able to rebound relatively quickly. It will go a long way for your name as a landlord and your apartment complex if you work with your tenants. 

Hi Nikki,

In light of the current pandemic, everyone in the real estate industry has had to make changes to reflect the economic shift. Buyer's agents are requesting addendums to extend COE 30 days with an option for either side to cancel due to COVID-19 financial effects, sellers are withdrawing their listings in fear of exposure, and brokerages are recommending zero face-to-face interaction with clients.

I mention all of that ^^^ because it's key everyone understands this is not business as usual for anyone. There will be odd requests, sudden changes, and fear-stoked decision-making. I wouldn't be surprised if you are now the only buyer in line for that property. 

Express your new situation to the sellers and ask if they would be willing to sign a change of payment method addendum + COE extension. See if you can negotiate some sort of compromise if they kick-back, which would be understandable as well.

Good luck!