Supercreditman

[bellrock]

One of the most legendary, and contoversial members, SCM, has not been heard from in a while. He was apparently going through a divorce several months ago and many jumped in to declare that they saw a BK coming for him because of too much credit, etc. While I never communicated with him directly, he was definitely an inspiration to me as well as many others. Its kinda weird, but it seems like with SCM's departure the "business credit" section of this site pretty much flattened out. Maybe that's because biz credit in general has contracted tremendously over the last year. It seems as though most of the posts now are from individuals who are trying to get credit based on their business because their personal credit is poor. There once was a time that a person could piece together several biz cc's, locs in order to fund business expansion, acquisitions, etc. Are those days over, at least for the foreseeable future ?

[supercreditman]

Hey bud! Those who saw a BK coming were right! I did BK and was discharged in Nov. 2012. I had about $1.5 million in unsecured debt and a $1 million mortgage, and about $500k in delinquent real estate taxes, trash, and sewer bills. A show gone ransid in the worst way! I feel like I'm worth $3 million now that I'm debt free. And, I'm back here to share my rebuilding adventures once again!!!!

[killove]

Amazing, was that biz or personal debt?

[mnhead]

SCM, congratulations on your new life! Where and how do you begin the restart? I'm in a similar situation and I'm grinding my way back. Thanks, nyquil

[creditxpert]

I'm intrigued to learn SCM about your comeback

[Mo Munny Mo Problems]

Congrats on the fresh start. We are fortunate to have the bankruptcy to fall back on in hard times!

 

I have a questions for Supercreditman:

 

I am just starting out in real estate. I was gifted a pretty nice, large home last year. 4 bedrooms, 2 bath, office, dining, laundry, carport, nice shop/shed in the back. Tile/new carpet throughout. It was too much house for me, so from day ONE(iterally) I had it rented.

 

Everything is good... the tenant aways pays, she takes better care of it than even I would haha, all that. The house had a coupe repairs it needed here and there, but mostly drama free.

 

This has inspured me to move to buy more properties. I fee like this might be what I wsa meant to do. Its fun, its good money, its a great learning experience. Why not?

 

 

 

My question is: Knowing what you know now, what pointers might you have for someone whose goal is to own and manage a portfolio of 10-20 homes or more even?

 

I asked because I noticed you said 500K in trash bils and taxes lol. Musta been a lot of properties lol.

 

 

I have perfect credit now, and alittle income, and almost zero expenses. I figure if I tough it out and not spend and just use all my extra money to get/maintain properties until everything stabilizes...I should be able to live off of it ater on in life.

[Mo Munny Mo Problems]

Also, how do you feel about fixxer-uppers VS ready-to-move-in properties?

 

 

 

Im pretty hand with fixing things so I have my eye on this super cheap 2BR 1BA for ony $32K. I might top out at $45K with repairs. You cant get a 2BR 1 BA for less than $55K around here uness its in Gangsterville. Doo-rags and pistols lol.

 

Being that there is about a $10K difference between the fixxer-upper and a ready to go property...would it be wise to just spend more and get the ready to go property?

 

 

Thing is, the taxes on that 2BR are ony about $100/mo though, and I wouldnt need as much insurance, thus less cost and more profit for me.

 

 

So Im kindof torn between the idea of making more, and spending less..with the fixxer-upper.

 

But then again, what if it ends up costing a lot more, and I coud have just bought a nicer, no flaws 2BR?

 

 

 

The difference for me is less insurance costs, less taxes, and lower payment to have to carry if the tenant doesnt pay, or ditches the place. Also, I could pay of the cheaper property faster.

 

 

What to do? lol

[jmight]

Also, how do you feel about fixxer-uppers VS ready-to-move-in properties?

 

 

 

Im pretty hand with fixing things so I have my eye on this super cheap 2BR 1BA for ony $32K. I might top out at $45K with repairs. You cant get a 2BR 1 BA for less than $55K around here uness its in Gangsterville. Doo-rags and pistols lol.

 

Being that there is about a $10K difference between the fixxer-upper and a ready to go property...would it be wise to just spend more and get the ready to go property?

 

 

Thing is, the taxes on that 2BR are ony about $100/mo though, and I wouldnt need as much insurance, thus less cost and more profit for me.

 

 

So Im kindof torn between the idea of making more, and spending less..with the fixxer-upper.

 

But then again, what if it ends up costing a lot more, and I coud have just bought a nicer, no flaws 2BR?

 

 

 

The difference for me is less insurance costs, less taxes, and lower payment to have to carry if the tenant doesnt pay, or ditches the place. Also, I could pay of the cheaper property faster.

 

 

What to do? lol

 

I know you asked for SCM's advice, but I figured I'd share my own experience so you have more information at your disposal...

 

I have had both types of properties and it really depends on the cost of the rehab vs the rent you can expect the property to receive.

 

We gutted a house in Ohio (the only one we kept) and went from having a property where tenants were willing to pay a max of $500/month to a property that rented for $1000/month. Mind you we did all the work so the complete interior rehab (new plumbing/electric from meter, etc) only cost $20k for the materials materials and the gas to make the 8 hour (each way O.o) drive every weekend for 3 months while we did it. The increase in rent was due to the fact that all other homes for rent were still stuck with 70's interiors so our property was unique for the area and was able to command the higher rent - another thing to consider when looking at ready-to-go vs rehab properties.

 

As far as things that I'd do differently (I also went BK when my tenants en masse began to become late on rents due to the economy) would be to put enough away to handle having the properties vacant, the expenses of fixing them up and re-renting them - any costs that might have to be paid while they are vacant- available and sit on it. I had enough for a couple properties to go vacant for a month or two, which seemed wise at the time but now I know it'd have been far better to have a reserve set aside for each house.

[Mo Munny Mo Problems]

 

Also, how do you feel about fixxer-uppers VS ready-to-move-in properties?

 

 

 

Im pretty hand with fixing things so I have my eye on this super cheap 2BR 1BA for ony $32K. I might top out at $45K with repairs. You cant get a 2BR 1 BA for less than $55K around here uness its in Gangsterville. Doo-rags and pistols lol.

 

Being that there is about a $10K difference between the fixxer-upper and a ready to go property...would it be wise to just spend more and get the ready to go property?

 

 

Thing is, the taxes on that 2BR are ony about $100/mo though, and I wouldnt need as much insurance, thus less cost and more profit for me.

 

 

So Im kindof torn between the idea of making more, and spending less..with the fixxer-upper.

 

But then again, what if it ends up costing a lot more, and I coud have just bought a nicer, no flaws 2BR?

 

 

 

The difference for me is less insurance costs, less taxes, and lower payment to have to carry if the tenant doesnt pay, or ditches the place. Also, I could pay of the cheaper property faster.

 

 

What to do? lol

 

I know you asked for SCM's advice, but I figured I'd share my own experience so you have more information at your disposal...

 

I have had both types of properties and it really depends on the cost of the rehab vs the rent you can expect the property to receive.

 

We gutted a house in Ohio (the only one we kept) and went from having a property where tenants were willing to pay a max of $500/month to a property that rented for $1000/month. Mind you we did all the work so the complete interior rehab (new plumbing/electric from meter, etc) only cost $20k for the materials materials and the gas to make the 8 hour (each way O.o) drive every weekend for 3 months while we did it. The increase in rent was due to the fact that all other homes for rent were still stuck with 70's interiors so our property was unique for the area and was able to command the higher rent - another thing to consider when looking at ready-to-go vs rehab properties.

 

As far as things that I'd do differently (I also went BK when my tenants en masse began to become late on rents due to the economy) would be to put enough away to handle having the properties vacant, the expenses of fixing them up and re-renting them - any costs that might have to be paid while they are vacant- available and sit on it. I had enough for a couple properties to go vacant for a month or two, which seemed wise at the time but now I know it'd have been far better to have a reserve set aside for each house.

 

No no, I would like input from anyone and everyone!

 

As far as having money set aside for rent, I *PLAN to just pay off each home as I get them. IE I the first one is paid, and will pay for the second one. When I get property #2, pay it off with the profits, and buy #3. Property #1 & #2 pays for #3...and so forth.

 

 

The only thing I plan on being stuck with in the long term is the property taxes, and upkeep. I dont really want to pay payments for very long.

 

That way, if they dont pay...Im just out the taxes and stuff, not really a lot.

 

 

I currently have enough to cover PITI for a year for both properties, plus another $1000 or so for repairs.

 

 

And as far as the rent, you were saying. Yeah its on the low end. I could get around $400-$450 if I fixed it to bare minimum standards. Working toiles, shower, sink, water heater, AC, heater, no leaks. Basics only.

 

 

Now, if I spent a little more, and got the place upgraded...I figure $500-$550 tops. It woud have to be VERY nice to get $550 from such a small place.

 

 

With a more expensive, read-to-go place, I could get the same $500-$550, only have a bigger loan to pay off, higher taxes, etc...but as stated...its turn-key. No hassle, no surprises, no work to do, just pay the extra $100-$150 a month.

 

With a mortgage, and insurance...That $100-$150/month is all the profit. But WITHOUT a mortgage, that $100-$150 /mo is a virtual guarantee that repairs should be pretty much not a concern.

[Mo Munny Mo Problems]

I was actually considering a HELOC @ 4.5% from my bank. I could take out the $32K for the fixxer-upper + another $10K to fix it up and to help get started.

 

Thats works out to $321/mo for a 15 year loan.

 

 

 

I did the math, and for say a FHA 203K, the PITI comes out to $356/mo. $42K for 30 years @ 3.25%

 

Thats assuming I can even find a lender that will take a loan that small lol

 

 

It needs too much work to get a regular mortgage :/

 

It is from a a good acquaintance, semi-family member. I COULD fix the roof and get the AC and water issues fix BEFORE they come to appraise it. Then I could get a regular mortgage.

 

 

So I could pay $100/mo less, and be insured, and fixed completely by going with a 30yr mortgage, but I would be paying FAR less towards the principal every month.

 

Thats why I am having trouble with this decision. I just cant bring myself to pay $350/mo and only have like $85 of it go towards the principal :/

 

 

I think I would rather risk it and take on the harder task...and go for it. On a HELOC, like I said, Id be paying twice as much towards the principal every month.

[gurl*sunshine]

Supercreditman!

 

It's been along time.....I remember when I first joined this site, u guided not only me but many others! I'm glad to see you getting a fresh start, as I will be guided all over again

 

Looking forward to all your great tips-it's the old school posters like you that keep me coming back!

 

Gurl-