The Top 5 Mistakes I've Made When Buying an Investment Property

[@irshadosman6140]

Your videos are very educational

[@Carter_Kill76]

These are great! I try to stay away from anything I wouldn’t want to live in myself (busy road, corner lot, bad neighbors etc.) biggest mistake I’ve made so far is not scoping the sewer lateral during an inspection. Renters were in for about a week before we were excavating the front yard. Never again!

[@CoachChadCarson]

Yeah, sewer problems can be EXPENSIVE! I've had some septic and sewer costly problems.

[@bebin73]

Why do you not like corner lots?

[@bebin73]

@@CoachChadCarson buy the insurance! Only about $300 a year

[@djgainsbond]

@@bebin73 what insurance?

[@bebin73]

@@djgainsbond my local water co offers insurance for the exterior and interior pipes. $300 a year. I just spent over $7,000 fixing some issues at one property that would have been covered. And the only reason I didn’t buy the insurance because I had to plumbers out right after I bought the property and scoped everything and told me that everything looks great

[@seanmckay9194]

Love it! I've made many of those mistakes, way too many times. Your last part about challenging neighbors and their pets hits home for me. I actually ended up selling a triplex in part because a neighbor was a very challenging individual that was constantly calling the cops on my tenants. He didn't think it was appropriate for them to be able to have guests or to be on their decks after the sun went down. We lost a number of tenants over the years due to this ongoing problem and we finally decided it was best to move on. Thankfully it worked out well as the overall market has appreciated but it was a wake up call.

[@CoachChadCarson]

wow, good story. The "hassle neighbor" is hard to quantify but certainly made an impact. This is how we learn (unless we would've watched this KZbin video ahead of time! Lol)

[@elianaposada]

@@CoachChadCarson any ideas to know about neighbors issues in advance? Police reports in the area? Association reports? :-)

[@bebin73]

I’d have bought his property and kicked him out. Lol.

[@j_boogie_483]

Would love to hear the challenging neighbor's side. Let's be honest, owners don't want renters as neighbors as renters can be inconsiderate. I'm sure the renters and their guests were always very quiet at night and weren't causing any disturbance whatsoever. /sarcasm

[@lailaatallah1857]

Fascinating and so informative. Thank you for sharing your hard won lessons and normalizing making mistakes. That issue with the title that you ran into sounds hairy indeed. Especially because your own paid legal counsel didn’t catch it. I wonder how many investors pay for a survey prior to purchase?

[@eaj463]

You the man ! Your video is very informative and detailed enough without including too much buzzword etc. Thx.

[@CoachChadCarson]

thank you for watching! I try to keep it buzzword free or at least explain the buzzwords:)

[@bart1meuz]

I just bought that book this week. Its ok, its hard for my area because its so insanely expensive, but it gives some basic ideas which is helpful.

[@CoachChadCarson]

Yeah, prices really do vary a lot. It makes comparisons tricky. I think the most helpful part for me was the principle of breaking a property down into components and building a working price list for your local area to refer to and adapt over time.

[@brentsutherland]

Love this. Very applicable, non cookie-cutter insight. Thanks for sharing Chad!

[@CoachChadCarson]

Brent Sutherland thanks Brent. Insights from real world scars😁

[@waltsikes3981]

How would you get started?

[@Theextremepessimist]

a hundred rental properties, wow!!! thats a baller right there

[@thinker2328]

Awesome video, thanks for helping us stand on your shoulders!

[@CoachChadCarson]

Happy to help! I'd love it if you could avoid some of my mistakes. Lol.

[@JWS66]

Great video. Just moved into my house. A double I'm using to hack my housing,which I learned from you. I will update in a couple of months and let you know how it's working out.

[@CoachChadCarson]

John Sharits congrats on the house hack!! That's awesome! Definitely let me know how it goes.

[@robcookrentals]

Could not have said it better, Chad! As I OFTEN do with your great work, I forwarded this to some friends and family.

[@CoachChadCarson]

Much appreciated, Rob! Getting something forwarded to friends and family is definitely the highest compliment in my book! Thank you.

[@leeroach3381]

Very helpful Thank you for sharing

[@asianinvestor15]

Hi Coach may i ask for an advise. Do you think mobile home is a good investment if it has its own land no land rent. Plus its has cheaper property tax with city electricity and city sewer. Do you think over period of time it will depreciate its value? I give an offer to the seller and accepted in a month I will be purchaser the house. In my calculation it has cashflow if I rented it. My only concern is in your experience over time does mobile home with own land does depreciate its value? Its my first investment since its the only price range i can afford right now.. Thank you

[@CoachChadCarson]

Thanks for the question, Pinay! Yes, it can still be a good investment even if the property goes down in value. Older mobile homes certainly depreciated a lot more than a house. The materials just tended to not last as long. My impression is newer mobile homes are being built much better. But in any case, you just want to make sure it makes enough cash flow - let's say over the next 10-20 years - that even if you had to replace it (buy another mobile home) it would still be a good deal. For example, if you paid $10,000, made $3,000/year in cash flow, and kept it for 20 years, you'd get your money back and make a lot of profit even if you had to throw away the mobile home in 20 years! Plus, you'd still have the land which has value. Good luck!

[@asianinvestor15]

@@CoachChadCarson thank you very much for your great insights and great evaluation. Yes that's my plan just hold it for 10-years create income for me. Thanks a lot

[@ponzianomanning3071]

Great tips! I never thought it possible that an attorney could so easily miss the legal description. Seems that attorney should be liable for their error. Also, I had a rental that I had a lot of trouble renting ( and selling ) because of complaints about 2 neighbors with barking dogs several doors down. Eventually the dog owners were issued citations. That can certainly be a deal breaker and devalue a neighborhood.

[@CoachChadCarson]

Yes, I wasn't happy with the attorney. They did end up helping me some to resolve it, but I still did most of the work.

[@davidstephens9594]

Coach Carson you said that you purchased title insurance but you still had to hire an attorney and track down previous owners. Wouldn't that be the job of the title company that sold you title insurance to hire the attorney to do work of correcting the title?

[@CoachChadCarson]

I think that's true. I didn't have to pay any attorneys or would have filed a claim. The closing attorney who found the problem told me who the former owner was and I just reached out. It was faster and I wanted to get property sold. If I had not been able to handle it I would've filed a claim

[@davidstephens9594]

@@CoachChadCarson Thanks for the info!

[@brendanmccann5695]

Great stuff! Very helpful. Thanks.

[@CoachChadCarson]

Glad it was helpful! thanks for watching.

[@Frank-nh9fe]

You said that the title insurance would pay for your loss. What exactly is/was the loss in this instance? Do they pay the cost of cleaning up the title? If somehow you lose the property due to a bad title?

[@CoachChadCarson]

The only cost in this instance was attorney fees to draft correction documents. The former owners were cooperative and we could find them, so it ended up being a best case scenario in a bad situation. I didn't even file a claim it was so small. If I had not been able to correct it, I would have had a larger claim.

[@Frank-nh9fe]

@@CoachChadCarson An opposite video would be interesting. "5 top positive/un-planned-for benefits/surprises..." Also, something along the lines of "Ways you have resolved tenant issues w/o going nuclear" Renting hacks - I've also heard strategies like offering cash back for no issues, i.e. an end of year discount for a year with no issues and on-time payments. Which sounds like a good strategy with less than stellar renters. Not all of us can afford top neighborhoods with top tenants (esp in this market), so we have to consider more moderate/low income neighborhoods, with tenants who don't have top/stellar credit records.

[@felix-w5m]

Great información thank you

[@CoachChadCarson]

Thanks for watching!

[@alvarovargas4067]

I bought my Primary home back in 2014 for 245k here in Federalway, WA. I then turned it into rental in 2017, it's now worth about 480k. What would you suggest to keep as cash reserve for this type of home?

[@CoachChadCarson]

I try to keep 3 to 6 months of rent in the bank, but a minimum of $5k (to cover big expenses if needed)

[@j_boogie_483]

did you save up and put down another downpayment on your next home? I'm down in Portland, and I want to rent out the home I'm in now that I bought in 2014 for $260k. It's worth about $475k now. As i'm slowly saving for another downpayment for the next home the market continues to skyrocket. I have a lot of equity in my current place so I want to use that to catalyze more investment properties. It feels like I'm barely "upgrading" looking at houses at the top of my budget of $650k.

[@thetipsheet970]

Excellent points, just trying to understand about your Title Insurance- I thought they took over the costs and handled getting it corrected so you wouldn't loose a buyer? It seems like you had to to everything and pay for it- I was told that if getting title insurance that we didn't need a survey because they guaranteed everything.

[@CoachChadCarson]

title insurance often gives a survey as an EXECPTION. It's one of the little fine print things they put in there that says if a survey COULD have shown the problem, they won't pay for it. But in this case, my attorney cost was minimal and it was mainly my time to solve it. I guess I also could have claimed that I had a loss of interest, holding costs, my time, etc. but it honestly wasn't worth my time and effort. In the end, it was a bunch of hassle and I moved on. If, however, I could not have solved this problem and I couldn't have sold it, I likely would've filed a claim at that point.

[@thetipsheet970]

@@CoachChadCarson Thanks---My attorney said if you get title insurance- you don't need a survey-- as they guarantee your title-seems like he was wrong.

[@koelg5858]

Great content #46💪

[@ryanjackson9410]

Another great video! Thanks Chad

[@CoachChadCarson]

Thanks for watching, Ryan!

[@bebin73]

You stated that you have 100 rental properties. - are you buying any more if a deal comes along or are you at your cap? And are you now retired?

[@CoachChadCarson]

Brian, we are more in the "buy and replace" mode. So, sell some buy others. Trying to improve overall portfolio over time. Also lending some money. Thanks for watching!

[@bebin73]

@@CoachChadCarson thanks for the response I just posted this question again in another thread so you can ignore it if you’d like I was just curious. When do you decide to sell a property? When it becomes too old or needs to much work to be renovated, doesn’t bring in good rent or just something you’ve had long enough that isn’t giving you depreciation on your taxes anymore?

[@j_boogie_483]

terrible neighbors/loud barking dogs/loud cars and trucks are my worst nightmare as I'm looking for my next home. What sucks is the market is so hot, there's no time to do drive-bys at various times for a few days to scope the street before submitting an offer.

[@CoachChadCarson]

I'd still make sure to have a long enough due diligence period to evaluate those things. If not, I would pass on the purchase - hot market or not. The hot market won't last forever, but a property you buy sticks with you!

[@j_boogie_483]

@@CoachChadCarson so with a due diligence period, I can submit an offer right away and if it's accepted I still have time for due diligence (neighborhood scoping) and can potentially walk away from the deal? Could I potentially lose money in that situation? Thanks for the reply!

[@CoachChadCarson]

@@j_boogie_483 That's the general idea, yes. It depends on the state and the contract whether you have to lose money (a deposit). But you also have the reality that a long contingency isn't as attractive to sellers in a hot market, so you just have to balance that with your overall offer. But contingencies are still very common.

[@norme7102]

I think I worked on some of those mistakes. 😊

[@CoachChadCarson]

I'm sure you did, Norm! Ha.

[@juliancolvard5742]

A huge mistake I witnessed a builder make that cost him over $200,000 was building a $1.1M house on a street where the other homes did not match it in appeal. The house was a contemporary build in a neighborhood with other contemporary that sold for a higher price, but the builders house was too superior to other houses on the street and that caused the house to sell for $880,000 instead of $1,100,000 despite the builders home being the lowest price contemporary home in the neighborhood. I did a open house for that house several time and was fortunate to learn a expensive lesson for free. Me and my partner are gearing up to build and little nuance stuff like this makes a big difference.

[@abdullahmortgage]

Hey Julian, thanks for sharing your experience. I got two questions though. What do you mean by ''too superior''? Superior in terms of design? And, if it was better than the others, why would this happen though? what is the reasoning behind it?

[@abdullahmortgage]

Oh, I just saw your other comment. So the house looked way different than the other houses around and this was the only reasoning?

[@juliancolvard5742]

@@abdullahmortgage Yep. It was way bigger and the design was 2018 compared to a bunch of 1970s houses that had not been renovated.

[@es892o]

Great video

[@CoachChadCarson]

Thank you!

[@jacobcapeles2870]

Morning coach

[@CoachChadCarson]

Jacob Capeles morning!

[@AAAA-mj2hz]

I love when you mention the ( educate yourself thing) cuse it's absolutely crucial, as a beginner what do you recommend me first? I wanna learn of to generate money and there are a lots of book out there, whats you're thoughts about this ? I appreciate delivering these valuable contents.♥️

[@CoachChadCarson]

If you want to generate cash flow NOW (like as a business in real estate), you could learn more about flipping or becoming a real estate agent. For flipping, I recommend J Scott's the Book on Flipping Houses. For real estate agent, the Millionaire Real Estate Agent. Good luck!

[@rpietryk4690]

Zero emissions and fences 😉

[@juliancolvard5742]

I witnessed a builder make a huge mistake that cost him over $200,000. He built a contemporary home in a good neighborhood and had it listed about $100,000 less than all the other contemporary homes in the same neighborhood, but the house was to superior to the ones on the same street. Instead of the house selling for $1,100,000, the house sold for $880,000 I’ll because buyers did not feel comfortable buying a home that stuck out too much on a street. Fortunate to learn an expensive lesson for free by hosting open houses. Small nuances make a huge difference

[@CoachChadCarson]

so true about learning lessons from other's mistakes, Julian. Shows how observant you are because there are lessons all around us if we just look. I just tend to learn the MOST when I'm also the one that got burned. Lol.

[@juliancolvard5742]

@@CoachChadCarson 😂

[@NeedsMoreToys]

One of my mistakes was buying a home next to a registered sex offender, specifically a pedophile which I discovered later.

[@maryj3565]

How did you find your lawyers/tax people? I've been having a hard time finding the appropriate lawyers!

[@gregorylord6953]

im a investor im 8yr

[@CPT_VOL1]

Liked

[@CoachChadCarson]

🙌

[@ethelperry4529]

👍👵🐢

[@CoachChadCarson]

🙏