If you don't mind me asking....


What kind of marketing do you do? I may have asked this but I don't remember. Direct mail? Geographic?

How much do you spend on marketing a month?

How many leads come in every day or every month?



I ask because your business is the exact kind of business I am currently modelling my business into.

Why are shorts a waste? I have a couple on my plate at the moment that I am looking at.

I use to model for a small REI firm. My boss was obsessed with using flat rate ROI for models even out to 15 years. For models going 15 years out, I choose to use DCF valuation and estimate the discount rate. I've never found the answer to this. Do you know which method is most accurate?

I've been hearing Austin TX is THE place. I've heard that for few years now and one of the better places as far as job market.

Mostly use direct mail but also bandit signs, billboards, and radio ads. Marketing expenses vary form month to month but its in the low to mid 5 figures /month.

I get a lot of leads!! Actually too many leads to follow up so I basically make blind offers at 30-50 cents on the dollar for most properties. maybe a hundred offers a day. If I get offer accepted a day I am in business.

Holy ****

#%@$)%*@)%@#(%*@$#(%*@$#(%*$@#)(

Man, I'll bring my acquisitions team down to where you live and follow up on the leads you don't want to do and we'll make millions more.


Lead flow is honestly my freaking challenge...... as it is for every business. Haven't cracked the code yet

Easiest way to find mobile home motivated sellers? I would think more traditional ways like door to door soliciting would be best vs the internet, but I'm not sure.

1) Craigslist -- either people post the home cheap, or they post it multiple times with no sales.
2) Your local park manager -- build this relationship, because (s)he can be extremely valuable.
3) Neighbors and people you meet in the parks. You'd be surprised how many families have several generations in the same park. Seems like people know each other's business too, which is partly why the manager is so helpful as well.

If an owner carries a portion for you can that basically be counted as a down payment on a property?

LOL yeah even though I get a lot of incoming phone calls of people trying to sell me their house, things are really bad in Florida right now. Most people are upside down in their mortgage. The ones that aren't still think their house is worth more the it is. If my offer is at 50% of FMV, the sellers think I am offering 25% because of their perception of their houses value.

One thing I learned in this business is you have to spend money on advertising!!

I looked at 5 houses today and offered 3. Hopefully i'll get one accepted

Hey Spex,

You could probably publish this thread as a book. You've probably got close to 100 pages already written in your responses to questions. 2+2 could publish it...

Everytime I fill a vacancy with a section 8 tenant...I do a little happy dance

Rika,
Is that sarcasm or are there ancillary benefits, tax or otherwise to Section 8 tenants?

I'm not from the US so I might be wrong. But isn't Section 8 guaranteeing the rent of the tenants?

Section 8 is a housing assistance program -- they pay the landlord a set amount a month as "housing assistance". The tenant is responsible for the difference between the rental rate and the housing assistance payment. The contract between the landlord and the section 8 management are year long contracts. As I understand (because both my section 8 have been reliable tenants) even if the tenant skips on the landlord, section 8 is bound to continue to pay for the remainder of the contract or until the landlord manages to rent the property to some other tenant.

So, yes it boils down to a good deal more reliability in payments in exchange for a bit more bureaucracy and paper work; but if you rent quality properties it isn't much of a hassle.

Anyone have any experience with FHA loans? Can these be easily acquired for someone buying a 3-4 family unit that doesn't have a 20% down payment?

Great thread, and I remember when it was not nearly as long as it is now. Filled with a ton of great info. I don't really have the time to rehab right now, so have been mainly doing a bit of wholesaling/assigning. So far so good, but I don't make nearly as many offers as some of the pros here do. I am very picky and since I need enough room for me and the investor to make money, I tend to end up low balling a lot of my offers. I have been getting very interested in wholesaling/assigning REO properties lately (mainly through the use of an LLC, but also maybe a double close here and there). My only problem is all the damn paperwork the banks want, and the small chance a good offer would be accepted, makes me wonder if it's worth the hassle if I am not rehabbing it myself. Any advice is appreciated.

100% serious...section 8 renters are the sex

1.) they LOVE their free money/benefits from the government...if they try to mess up your property or be a pain in the butt, you can call their "handler" and complain or you can threaten to complain, if the tenant is found to break the rules, they'll lose their free money...basically it's like a "parent" for the tenant you can tattle too

2.) guranteed some up to all rent...I have 3 renters that are 100% paid for by the gov...so no matter WHAT happens at last I get 100% rent on time for those units. And then the renters that have like 1/2 paid for, if "the tenants other half" isn't on time, I again can call their handler and tell on them

Basically a lot of my 30 year olds act like 8 year olds, and the fact that they have "something to lose" (aka their benefits) it keeps them "acting right"

I did have 1 BIG HEADACHE tenant, and after he abused my property and broke lease and left early, I talked to the housing person and he lost his free rent for 1 year min...and possibly forever (the big thing isn't that "I got him back" it's that my other tenants have heard the story and do their best to "fly right")

also FWIW...I've intentionally upped my % of section 8 tenants. I've gone from 5%ish to almost 15%...I would LOVE to have 100%...but realistically shooting for 25-30% by 2010

So here is my theoretical plan. Punch tons of holes in it please.

I outright own a home at the moment but due to various reasons I am going to be renting to a family member. The property is worth about $180k now and I have 100% equity (ended up buying an REO cash to expedite things, 1st mistake) but am planning on taking out 150k or so in equity and have the rent pay for it while putting that into a 10 unit building I am working on now, which even conservatively speaking should have an NOI of around 48-50k. After debt servicing, 20-25% down I'd be looking at somewhere between 16-20k net cash flow on it.
I am buying it for under assessed value so is there anything to stop me from take out approx the same amount of equity from that, as I'm buying it below assessed I would essentially gain instant equity no? So take 100-120k and buy another similar property thought equity on #1.

#1 nets 16-20k minus debt servicing = 6-10k
Repeat a few times. Within a couple years I could get to my goal of 9-10 properties and about 100k passive a year. Am I missing something here? I know there is obviously some risk, but as long as you do due diligence and prepare for every contingency isn't this a relatively low variance way to make a lot of money, not to mention the added benefits of having a retirement plan in the properties themselves?


One other thing. To offset the tax burden in the later years of a mortgage my accountant said I should take a 25yr loan if its doable as I can depreciate every property over 27.5 years so it wouldnt leave me any overlap where I am paying on the full NOI with no appreciable interest to deduct from a mortgage. Does this jive with everyones understanding?

Rika - can you explain how to obtain section 8 tenants and the forms to fill out?

Most banks will no longer do this....at least not immediately. The argument is that the true value of the property is whatever you paid for it since it was an arm's length transaction. You can get the tax assessed value lowered though in most cases. If you were to make some improvements or increase rental income from the current level, then you could get a new appraisal and take out some of the equity. Otherwise you need to wait for a "reasonable" amount of time to pass.