All Forum Posts by: Sheree H.

Hello BP! 

I'm sitting here with a sprained ankle, Business Planning for Dummies, and nothing to do but think. 

It's nearing one year since I joined BP, and so much has happened. I feel like I'm a different person. In fact, I KNOW I am. I actually answer phone calls now, and I don't dread it. :D

I started with 100k in January, and in my naive optimism I was planning to have it all back by December to recycle and reuse. Instead I've flipped one easy property, successfully held a small HML for another investor, messed up a second flip and turned it into my ugly baby rental with decent cash flow, bought a third in a war zone, rehabbed it with an XL side of drama, and rented it, working on my fourth flip with a partner, and waiting anxiously about my offer on the fifth, a personal home/quad. And I've learned a mind-boggling amount about houses, running a business, the process of buy/rehab/sell, the nature of contractors, humanity, and most importantly, what I'm capable of, what I like and don't like, and very specific positive and negative aspects in my personality in relation to REI. Far from a financial success story, but I feel moderately successful just by the fact that I'm not digging myself out of a hole.

Now I'm trying to figure out where to go from here. My goal is to be financially independent by 2016 but I've hit a mental block regarding a plan and I'm out of funds (outside of my reserves). My options as I see them:

1) Refinance #2 and #3 at the 6-month mark (Dec), get about 30-40k out of it, and find another flip / rental to work on. It would reduce my cash flow significantly.

2) I have a little under 6 digits in credit that I never use, and they're all begging me to take it out at 2-3% for 21 months with no fee. Dangerous, I know, but it's an option. 

2) Stop investing, take care of my current properties, and keep working my day job until I save enough for another project (1-2 years?). Which, to me, is such a shame considering all I've learned, how much I enjoy doing this, and the money I've spent on business resources, marketing, and mentoring. 

I've always been someone who missed the forest for the trees and this dummy business planning is not dummy enough for me. I thought I'd put my experience out there, and if anyone wants to weigh in, I'd love to hear it!

Thanks,

Sheree

Thanks to EVERYONE for your replies. It was exactly what I needed to hear. Athens is an hour drive away for me so it puts a kink in things, but I did put the quit or pay letters in the mail this morning. No more annoying partial payments allowed, even if its $0.01 less!!

We had a PM in place, but there was too much mutual dislike between the PM and tenants so the PM quit. And the PM was more lenient than I would have liked; yes, the tenants have "trained" us instead of the other way around. This is the first month I'm handling this myself.

@Gerald K. It's a 12-month lease that started August 1. Rent is $1k and late fee is $38 + $5/day, but they've basically ignored that part of the lease.

@Bobby C. It's in the University Heights area right between UGA main campus and the new Vet school, definitely not a bad area but most of the houses are rentals to students. Dealing with students, wandering artists, and the sort that Athens GA attracts just comes with the territory.

@Rob K Hey, I love that! I didn't notice our contract saying anything like it, but I'm going over it again and you can be sure it will be on our future contracts.

@Darrell Shepherd The two tenants are both working. There is no way they can't afford the rent. I just don't understand these people - if they can pay $970, what is an extra $30?

@Jack Tucker Good quality PM in Athens? Does that even exist?

What would you do with tenants like these?

My tenants in Athens, GA have paid late every month. They never pay the late fees, and we never chased them for it because it wasn't worth the $50 or so. The last month they paid $50 short of full rent, begged more time, and then paid the balance a week before the end of the month. This month they paid $30 short, and are now delinquent 11 days. I have the pay or quit letter on my desk.

Is it worth the trouble and possibility of losing tenants for such a little amount? They do pay, and they aren't students but have jobs, which should be a good thing. If we do lose them, there are no shortage of applicants in Athens, but we would probably lose the rent until next august.

James, thanks for all your thought-provoking threads! They've been quite educational to me.

Your comparison of Johns Creek to Irvine & Suwanee to Tustin is interesting. I live in Suwanee now, lived in Huntington Beach for the 12 years previous. Followed the RE market in both areas, and love both, but they are so different. I can't say I agree with you, but you've certainly got me thinking!

How are your high-end rentals doing in these wealth-centered areas in GA? Investing in Johns Creek/Duluth/Suwanee has crossed my mind more than once, but my assumption was that the because of higher wealth, most people will want to buy instead of rent so flipping would be the better option. I'm very interested to hear what your experience has been.

I'm in! Nothing like rising prices to get me off the fence. Looking forward to exploring my new privileges. :)

Thanks @Joshua Dorkin and @Brandon Turner for this incredible site. I'm proud to be a member, albeit a green one.

Elizabeth Colegrove Thanks, that was what I was planning to do.

We didn't get the house. It had multiple cash bids over listing price, and we were outbid. I'll be watching it to see what it sold for. This market is impossible! Thanks for all your responses

I made a bunch of phone calls. Let's just say, if the offer gets accepted, I hope I don't get disowned by my family in a couple months.

Edit:
Sorry, I shouldn't joke about it. I'm blown away by how much my family believes in and supports me. I hope to God I don't disappoint them.

Well it's listed 24 hours and it's already at highest and best with multiple offers. We made a cash offer.

That's disappointing. So basically I need to make a cash offer on this house to even consider it? I don't understand, many houses have been purchased with financing that are not in perfect condition. Have the requirements gotten stricter?

This house just needs drywall on the lower, paneling half in the hall, dining, den, and hall bath, and flooring in those rooms. I don't know if the leak is active. It's just a stain on the ceiling below the shower.

Thanks, I just sent J Scott a note (don't know how to tag on my phone).

I spoke with my lender and he said the loan will go thru if the house is in liveable condition according to the appraiser. He thinks it will be, from my telling him that the backed up toilet plumbing has been fixed and there is no mold. How likely is that?

More info on the house: built in 1995, vinyl siding, roof in good condition.

I really want this house, because it's rare for a house to be in this price range in this school district. And I've lived in worse houses. Am I crazy? Stupid? Or both?