All Forum Posts by: Zach Davis

That would depend on your definition of mentor. Most if not all successful investors, even if they don't have someone in the field that they look up to and learn from have people like lawyers, contractors, designers, real estate agents, etc. that they work with. Most of these people are around because they are professionals that have a skill that you don't have and can learn. Bottom line, everyone learns at least part of this profession from someone whether they consider them a mentor or not.

As a landlord, you require a security deposit for a reason. Stick to your requirements, they're there to protect you. Also, if you bend the rules for one and not the others you could open up yourself for a discrimination lawsuit. 

My wife and I recently purchased this duplex and we're looking for ideas, analysis, and/ or warnings. It’s a 3/2 with garage on one side and a 2/2 with garage on the other. Here’s some of the numbers. Rental income is $1,900 per month, property taxes are $2,700 a year, insurance is $490 a year, water/sewer is $85 a month, and garbage is $45 a month. We have a $152k mortgage at 4.75% and our payment on that is $793 per month. Vacancy in the area has been less than 6% for years. Also, the duplex is on the edge of small pocket of 70s built, trashy, low quality rentals but with new construction on one side and a gentrification program pushing in from the other. The potential for property value increase seems to be very good. The property has had some work done on the interiors, though strangely, it’s mostly been larger “improvement” jobs while simple maintenance is lacking… So far we have re-roofed the building, gutted the overgrown landscaping and fenced both back yards, put up security lighting, fixed some plumbing and electrical issues and collected rent. We are managing the property ourselves. I’m mostly looking for potential pitfalls and ideas to make the property more appealing for future tenants and help bring up the quality (and value) of the neighborhood. Thanks for looking.

My wife and I are looking into buying this property and I would like to get some feedback from the seasoned vets. It's a 3/2 with a single car garage on one side and a 2/2 with a single car garage on the other, built in 79. Purchase price is $210k and we'll be putting 55k down with a loan rate around 4.875%-5%. Rents are $895 for the 2/2 and $1000 for the 3/2. Property taxes are $2600 per year and insurance is $500 per year. Vacancy rate is running under 5% for the last 4 years or so. Water/Sewer will be something like $1500 a year and we will not need to pay for garbage. The property is pretty well maintained but will need some updates in the next few years. My wife and I will be managing it ourselves. Let me know what you think.

Hey guys, I'm looking into starting an LLC in the near future. The question I have is this: Is there a good way to begin building a good credit report for the business before it is actually in use. I was thinking something along the lines of getting a business account, credit card, and lines of credit, but just letting them sit until they would be needed at a later date. Would that begin to build credit or is all of that of no benefit without consistent business income or use of the credit? Thanks in advance for your help.

Check out the Bureau of Labor Statistics site, BLS.gov. It doesn't have anything to do with real estate markets per se but it’s a good indication as to what the population is doing and whether the average income and job availability are growing or shrinking in a given area. And that has everything to do with the strength of a given real estate market.

Just outside of my town is a 60+ until apartment complex just build a few years ago, strictly for migrant workers. From what I understand it actually does fairly well financially. That being said, the place is already showing substantial wear and a good portion of the tenants are on section 8. Also, the "migrant worker" situation is somewhat different here than in other parts of the country. Our migrant workers don't actually migrate, they stay here because of the high minimum wage. Essentially, migrant worker housing here is just a Hispanic only apartment complex. As far as your situation goes, if you can get the building cheap enough and the numbers work, then go for it. Before you pull the trigger though, make sure you have a second and third exit strategy if it doesn't work out for whatever reason.

Hey everyone, thanks for all the great input! The electrical has been updated somewhat since it does have baseboard heat but I highly doubt anyone has bothered to rewire the whole building. Plumbing isn't too much of an issue for me since I have quite a bit of experience with it and can re-plumb the building myself in a weekend. I don't believe the building was initially intended to be a duplex but probably converted as some point in the 70s or 80s. I think the part that intrigues me about this particular property is that it has a daylight basement, currently being used for storage. At first glance it appears to be large enough to convert into another 1 bedroom unit making the cashflow potential of the property pretty impressive for the area. That is unless I'll have issues keeping tenants in a drafty old building...

I'd have to agree with you guys, not the best deal but unfortunately the best one around that's loanable. Thanks for the input everyone. I'll have to keep looking.

@Steve Smith I would be doing the property management myself since I have experience with it already. The rental dwelling insurance figures are correct; mostly the price is so low because the building is less than 1/8th of a mile from a fire station and also less than a quarter of a mile from my house. Replacement value is $155k for the building and the price includes $300k of liability insurance. I can send you my figures on the REI Property Analyzer Sheet if you want to see what I've got so far. I'm assuming 5% vacancy, current rents, and only essential maintenance for the first year or so until the units turn over and I can bump the rents and do some minor updating. The maintenance figures are pulled from similar properties I used to manage nearby and the building seems to be fairly well maintained, just never really updated. I also get contractor pricing on any materials so it brings my costs down. Thanks for the reply, I appreciate the input.