huge problem for many investors is that their mind is trained to look for reasons not to do something, especially with out-of-state investing. (Location 194)
The reality is, people feel uncomfortable buying a property they can’t see in an area they don’t live in, and fear has a lot to do with it. The thing is, you aren’t buying a home; you are buying a small business—an investment. (Location 226)
You need to know what you are buying, and you need to know why you are buying it. Good investors understand this, and it is one of the reasons they have been so bearish about out-of-state investing over the years. (Location 294)
This opened the door for websites like WalkScore.com to provide data to help potential homeowners or tenants determine how friendly an area was for those without a personal vehicle. WalkScore will give you a number (with a perfect score being 100) that corresponds to how (Location 476)
Another helpful tool is Trulia’s crime Heat Maps, which put together a map to provide a quick visual portrayal of crime that is easy to interpret and universally understood (plus they’re free). You can avoid the “hot” areas (areas portrayed in red and orange) and stick to the “cool” areas (green) to get a really good idea of what kind of neighborhood your property resides in. (Location 496)
Rentometer.com has become my go-to tool when it comes to getting a rough idea of what I can expect for rent on any property I’m evaluating. (Location 513)
Once I’ve checked out Rentometer, my next stop is Craigslist.com. By searching for homes for rent in an area similar to your subject property’s, you can get an even better idea of what others are paying for rent and what types of properties are available. (Location 519)
will add a disclaimer that the best information comes from people, not websites. I’m going to show you exactly how to find those people and pick their brains to get the intel you need to buy the properties you want throughout this book. However, when some of this information is available so easily, don’t waste the opportunity to fact-check what the “experts” tell you. There’s no excuse to blindly follow (Location 532)
One of my all-time favorite apps is called Mortgage Calculator Plus. This app allows me to enter a mortgage amount, interest rate, and amortization and quickly see exactly what my mortgage will be. (Location 643)
Another app I love is a voice recording app called Rev. It allows you to record messages and label them to listen to later. (Location 679)
If you think about it, the most efficient investors are those who have learned how to: •Find properties below market value (Location 715)
One of the most common rules is referred to as the 1 percent rule. The 1 percent rule states that if a property can rent for 1 percent of the purchase price each month, it is highly likely to be profitable and cash-flow positively. (Location 776)
The 70 percent rule is more of an equation than a rule of thumb. Used for quickly determining a price to pay for a potential flip property, the 70 percent rule states that if you multiply the after-repair value (ARV)—the price a home is expected to sell for once it’s ready to hit the market—by 0.70 and then subtract your estimated repair costs, you can come up with a conservative number to offer for the property. (Location 806)
While many investors (usually new ones) begin salivating at the ROI that is possible at this price-to-rent ratio, I would strongly caution you to ask why the properties are selling for so low compared with the rent because it might be too good to be true. (Location 824)
The 50 percent rule states that you can count on 50 percent of the income that the property generates to go toward repairs and holding costs other than those associated with debt or the mortgage. Though many investors really like this rule, I am not a fan because it’s too general. (Location 840)
The first and biggest metric a lender will look at is your debt-to-income (DTI) ratio. DTI is a simple equation that compares how much money you are obligated to spend every month to cover your debts with how much money you are bringing in. (Location 1248)
Most banks don’t want a DTI higher than 3–6 percent. While debt itself makes up only half of your DTI, it’s still important to work to keep your debt obligations as low as possible. (Location 1254)
In all the loans I’ve applied for, nothing over 720 will make a difference. Depending on how many properties you have, a credit score in the mid-600s will usually still get you a good rate. Banks have minimum credit scores they’ll accept for different loans or interest rates, so making sure yours is in good shape (Location 1291)
Not interested in doing the biweekly thing? There is another, easier way. To speed up the early payoff of the loan (as well as save on the interest you’ll by paying), you can simply increase the amount you pay each month and have the difference go toward the principal on the loan. (Location 1494)
What other opportunity does the average Joe stand to borrow $400,000 from a complete stranger at an interest rate below 4 percent? (Location 1550)
I offer contractors a bonus if they finish on time and impose a penalty if they finish late. Once they’ve told me how long they will need, I usually add a week to this number to be extra careful and then write this time frame down on the itemized bid. (Location 3031)
Eager contractors ready to go to work for you. Driven property managers who want to add to their portfolios. These people are willing to do the worst parts of real estate on your behalf, freeing you up to do the fun part! (Location 4678)