Buying Portfolio 25 houses.
Hello,
I am considering to buy a portfolio of 25 single family houses in C/D level area in chattanooga ( most of them on section 8). I work full time and can contribute about 10 to 20 hrs/week for managing the business. Please see below the numbers, my execution plan and concerns.
Please find the details of the deal and my analysis in the below document
https://docs.google.com/spreadsheets/d/1OliaM5ppGf...
Execution.
To find two property managers and split the properties between them. The reason I want to split the properties is because I want introduce business process and reduce my person dependencies.
Log all maintenance calls and create a cost database to introduce a optimal way of fixing things. Also have proper contact logs of handyman and contractors.
Concerns
Currently I have one duplex. I am having big time trouble coordinating with my Property management company. They have the worlds most expensive maintenance crew and over charge me on every damn thing ( sometimes 4 times the cost of my handy man, who charges at 25/hour). The current communication is so horrible and none of their maintenance charges are transparent. I am having trouble getting details for the repairs they have charged me. I am going to fire them soon but before that I need to find a better property manager. I don’t want to involve in the management of the property.
So my concern No 1 is …...
- Finding a good property manager. Who communicates and takes care of maintenance with fair market charges. One who does not love ripping me off.
- Have I underestimated any of my expenses?
- All properties are very old. They are built between 1935 and 1978. So I am expecting Capital expenditure.
- Understanding maintenance costs and figuring the optimal price for fixing and rehabbing.
- I am not very uncomfortable driving around the properties area(c/d areas). I am not very sure if I would be able to handle the property maintenance and management by myself (I am dependent on somebody to manage it for me). I am not very good with communicating with peoples and lack the selling skills. I think that is one of the reason I am not having a healthy relation with my current property manager. Well I am not this bad at my profession where I work, somehow I am not able to handle my property manager to communicate and do what is needed.
Conclusions and Questions
I hate loans, I don’t owe any consumer debt and I pay off my credit cards in full and actively participate in their cash back programs. I am not seeing this as a loan, I seeing this as more of leverage for my good credit. But I don’t want to be wrong and put my family through a financial situation and don’t want to bankrupt myself. I don’t plan to pull out any of the money out of this business for at least four years, everything would go towards my reserves.
I am new to the business and I am trying educate and grow myself in it. So please advice on what you investors think about this deal. What are the unseen risks that I can expect. How easy would it be to find a property manager who can communicate and work towards a mutual growth. what are softwares I can use to automate the business and keep track any risks.
Thanks
Anil