Scratch that, I found your post.

I was just looking around and found a recommendation for this place (http://www.tenantverification.com/tvs-fees.php) as a tenant screening service. How do these fees look in comparison with the kind of effort and fees involved in performing tenant screening yourself? My initial impression is that the fees are somewhat expensive -- but I am learning here.

There are a handful of books that I recommend. But understand that I mostly have invested in the rental housing arena and mobile home park arena. So it depends on what you want to do.

I suggest that you read the work of John Reed. The book Landlording by Leigh Robinson is good. I liked Property Mangement for Dummies. I liked Streetwise Guide to Investing in Rental Housing.

But before you go buy those, I'd recommend that you try to get your information from the library. Also, join an REI club. Many REI clubs have a library that you can borrow REI books and courses from. And you'll have the benefit of getting to know people that you can bounce ideas off. Its worth it.

Dang! These rates are on the cheap side. I'm going to give them a shot myself. I haven't shopped around for a while. I'm glad you posted this.

I wonder what database the eviction search accesses though. If its only their internal database it prob won't be much use. In any case, I'm going to give them a shot.

Glad I could actually give something back to you. I gather you wouldn't be paying for every single service in that menu right? Which ones would be the best set?

Just found this thread, very interesting so far. You very obviously have a lot of knowledge in this area. I assume you are currently self-employed, and have a welth of experience in your field. It is however said that its best to work in a restaurant before you open up your own restaurant.

My question is how can I begin to learn about real estate investing, and where can I gain some real world experience? I would like to be employed (at first) to gain as much knowledge as I can about REI. What type of jobs/companies would you suggest I look into? I assume you worked for some kind of bank or other individual before you went out on your own. I just recently graduated with a degree in economics, however I basically have zero knowlege about REI (other than what I read and see on TV). What would you consider is the best way to get started in your field?

Any links/advice or whatever would be much appreciated.
Thanks

+1.

See if you can find a job at an REI company. There are many differnet kinds of REI companies. Some buy stuff for themselves, some buy and sell quickly (like mine), some consult for large RE investments, some do land development and the list goes on. Get your foot in the door some place that offers a salary or base + commissions. Its a great time to be an RE investor right now. I found my first RE job in the newspaper.

Becareful though because there are so many REI scams out there. Don't buy any kind of seminar or pay to be mentored. If someone says you can make 10k month your first year its most likely some sort of scam.

you need to come to Germany the new center for REI .

Thanks for the thread. I often see you stating that taxes and insurance should be about 10%. Where do you get that figure, property taxes in CA run from 1-1.75% and insurance is about 0.5%, so how do you add up to 10%?

I think that credit/criminal/eviction for $35 is a bargain. Thats the one I'd use. Even if you can only charge $30 or $25 for an application fee, I'd probably eat the other $10 just to know.

WHAT!? I don't live in CA, but I find this hard to believe. You're telling me that in CA taxes run 1.5% of gross rents? And insurance on investment property runs .5% of gross rents? So for every $1000 in rent you collect you have to pay out $20 of that to T&I? That is amazing.

In any case use the actual expenses. 45% expenses is a decent estimate. The actual expenses may be higher or lower.

You know what, i'm an idiot, I was calculating it as a percent of purchase price, not gross income. you're right

Hey spex, I've got a first time homebuyer question:

(I'm buying my first house. I'm 23, making $32,000 a year and want to get something around $90,000-110,000. My credit is good (~730), I have no debts, and I have $22,000 in my bank accounts.)

I'm looking at two financing options, and wondering if I'm missing something:

Broker: Will take 3% down, will require PMI, closing costs will be $2,000-3,000, APY will be ~5.75.

Bank: Requires 5% down, requires no PMI, will pay closing costs, APY ~6.125.

Assuming I'm not planning on pouring money into equity, I don't see how the bank isn't a phenomenally better option. If the PMI is $40/month, it seems like the broker would have to offer a rate that was ~7/8 of a point less just to make up the difference in monthly payments.

Is there something I'm missing here? Is the bank simply the best way to finance, or are there other factors that might make a broker a better option?

3% down? In this market seems a bit optimistic to be buying something with only 3% down. Best of Luck to you though

The bank's deal kills that brokers bull**** deal. No contest. Plus I'm pretty sure that you'll end up paying that broker 1% or so for finding the loan for you. So he'll be more expensive too.

Excellent, I'm glad I wasn't going crazy

One more question: I see a number of online lenders (LendingTree.com, Bankrate.com, BestRateLoans.com) that seem to be offering excellent rates...should I expect to get bogged down with fees (and possibly poor service as well) as was the case with my broker, or is there anything solid out there I should consider?

BTW, thank you for this thread, this has been amazing!

given times like this in the US and now UK when buyers are become very wary, wouldnt it be better to implement a system whereby your mortgage is based on say the valuation at a set point each year or every couple of years (okay would cost a bit to get it valued a hard to get it independent).

thus when prices go up, so the buyer's mortgage increases, but so does his asset value, and buyers are no longer scared to buy because they do not fear a crash, because their mortgage would fall accordingly.

just a thought

john

Wait, what? Are you talking about mortgage payments or about the principle of the mortgage?

i know almost nothing about real estate, but from what i know you buy the house with a combination of a loan from bank/mortgage and a deposit.

well, how about the bank instead buys the house, and you agree with the bank to buy the house from them. so rather than taking out say a 20 year mortgage to pay for the house, instead the bank buys the house, and sells it to you in say ten installments every 2 years. so if the value of the house rises, you pay more for it, and vice versa.

maybe this would suck for the buyer, becuase they do not get any of the house price rise, instead the bank would. but in times like this when nobody wants to buy because they are worried about the falling prices, these people may be more inclined to buy as whether it falls or not, it does not affect them so much.

obviously there would be a lot of work needed to work out exactly how it should be done (likely a balancing payment at the end would be needed) or they can tweak it so both the bank and the buyer has some exposure to the property price change.

maybe this already exists, idk.

just a thought

john

So it's looks like some sort of lease from the bank with adjustable pricing?

Would suck because you will not build any equity the time you're holding the home. Instead of that you will be paying more every year (on average) and gain nothing.

rather than Home Owner A selling his house to Home Owner Wannabe B, instead he sells his house to a Bank.

The Bank then sells 1/20th of the house for the next 20 years to Home Owner Wannabe B at the current market price. (could be 1/25th etc etc)

Thus after 20 years Home Owner Wannabe B now owns the house, however rather than buying it at one value, he pays the average of the value over the next 20 years. Each year he owns an additional 5% of the house as he has bought that each year from the bank.

The Bank takes on the volatility of the price fluctations, and in turn enjoys some of the expected gains in the house price increase from buying it from A and selling over 20 year to B at an expected overall higher price based on the rise in the value of the house. And B gains from the not risking a price downturn and for example falling into negative equity, with the cost of that being he does not enjoy the proportion of the house he has yet to buy from the bank (though does enjoy the expected price rise he gains form the proportion he has already bought from the Bank).

i think this could definitely be a workable solution, the main problem is getting an independent valuation every time the buyer is contracted to buy another proportion from the bank.

Why would a sensible buyer do that? Instead of inflation making your payment relatively smaller it actually increases it. Sounds like a bad deal to me.

sorry i dont understand what you mean. how does inflation usually make your payment smaller under the mortgage system? assuming the interest rate on borrowing is higher than inflation, under the mortgage system you are always paying a cost on what you borrow. whereas here you would simply be buying the house in 1/20ths. you could save up a deposit for the first 1/20th, and then with the money you earn in year 2, pay for the 2nd twentieth of the house. i.e. you never borrow any money. you enjoy the price rises on the proportion you own, and the bank does so as well.

presumably the only reason (other than having to get it revalued every year) is that the bank feels it can get a better return by loaning someone the money to buy the house and enjoying the interest charged, than it would do by enjoying the price rise on the house. but given this hasn't worked out for the banks now due to the property bust, maybe switching to home ownership would be better.

note if everyone agreed on this system, you could avoid banks altogether. if Person D wants to move to a bigger house, sold his house to Person E in 1/20ths for the next 20 years. Say the house was valued at $400,000, so in the first year Person E pays Person D $20,000.
then Person D could then buy a bigger house, valued at $600,000. He then pays the owner of this house $30,000 in the first year i.e. Person D needs to have made $10k in income to afford this prior to selling his old house and buying this house.

I really can't see why this system wouldnt work. It would mean people would be saving money to buy proportions of a house they could afford, without any need to borrow money.

If you pay the same amount on your mortgage inflation reduces the worth of the payment you make.

Say you pay $1000 a month on your mortgage. (compounded!) interest reduces the worth of the payment and total amount of your mortgage. So in 10 years you will still be paying $1000 but for that money you'll get a BigMac by then.

Also consider the total amount of the mortgage. Say it's $500k, in 10 years that $500k will worth a lot less due to inflation.

And in your system you're not building up equity either, instead the gained equity goes to the seller of the home.