What do you think?

Question

More than likely wont purchase this home but id like to compare my thoughts with your thoughts (experienced people) on a deal just to see if im learning anything lol.

Price  : $129,900

Listing Specifications
General Description
Upper & lower duplex close to downtown Trenton. 2-2 bedroom units with newer fridge & stove, hardwood floors. Roof 2005, 2x100 amp breaker panels. Each unit rents for $685.00 inclusive. Both units rented.
Building Type : Multi-Family

Land
Land Size : 76 X 66

Would you look further into this deal or no?

or

price  : $144,900

General Description
Excellent income property, Duplex 2-3 bedroom units, both rented for $710/month, tenants pay utilites. Both units have separate entrances, laundry hook-ups, separately metered. Upgrades : 2004 steel roof, all windows, 200 amp breakers, plumbing, flooring (ceramic, laminate, cork) and insulation. (Main Floor Unit: Kit, LR, Porch, 3 Bedrooms, 4 pc bath. Measurements should be similar to 2nd floor). Approx 1770 sq ft, large yard, partly fenced. All measurements Approx.
Building Type : Multi-Family

Land
Land Size : 33 X 132

Michael Shadow · Answer

Haha, you think his blog is bad, you should read his book.... but seriously it's stuff that does happen and you have to be prepared to deal with it.  I got a call the other morning at 4am from a tenant that was distressed because another tenant had come home drunk at 2am, turned up the stereo and proceeded to pass out in her apt, and none of the tenants could get her to come to the door so they called the police and after an hour of beating on the door they finally woke her up at 4:30.

Try a sewer pipe backed up because a tenant flushed feminine products down the toilet and your the one that has to snake the system from in front of the blockage because it's the only way to get to it without draining 200 gallons of sewage on the basement floor, knowing that once you free the blockage you better get the snake out fast and the cap put on the clean out. (I did it successfully)

6am call because there is no hot water, thermostat burned out in the middle of the night.

There's other stories I have too and I'm a noob at landlording, I've only had tenants for 3 months.

So realize it's like MikeOH says it's not nearly as easy as the gurus say.  I still work my full time job then get home, grab dinner and go work anywhere from 2-4 hours on my rentals, then come home to do 10-20 minutes of book work.  Last week we decided to take a week break from working on the rentals because we got all of the essential items delt with but now we're back at it and I have around 70 items on my todo list still.

Oh yea, our week break consisted of working two nights, once because we had a heavy rain and found out a sky light leaks during down pours and another to deal with the thermostat issue listed above.

So if this stuff scares you head for another investment, if it doesn't scare you then go for it.  I am so glad I went for it, despite all the negative issues I've encountered already.

Michael Rossi · Answer

d_Random,

The reason that I publish my blog is to give new investors a look at the REAL WORLD of being in the rental property business.  It is not intended to scare you, but rather to help you understand that the stuff you see on the infomercials and from the gurus is mostly nonsense.  One of the main reasons newbies fail is that they are not prepared for all the challenges in the real world.  If you listened to the gurus, you would think that owning rentals is just a lot of sitting around waiting for money to fall from the sky.

Having said that, certainly not all tenants are bad tenants and not all tenants need to be evicted.  In fact, in my experience, about 90% of the tenants are no trouble at all and only about 1% of the tenants must be evicted each month.  Are evictions and dealing with the "tenant from hell" part of the business?  YES!  Are these problems the majority of the business?  No.

Good Luck,

Mike

Donny Random · Answer

Man, you're recent problems sound pretty unsavory dafly. How many units do you manage?

Donny Random · Answer

Yikes!
After reading Mikes blog, it would turn anybody off from landlording. I have no idea how he deals with all the constant rehabbing and evicting tenants. What I gathered from the blog that he has close to 100 units, I don't see how one person can handle that many. I think it would push me over the edge quite quickly. :crazed:

Account Closed · Answer

If you have a bit of time read Mike's blog. It will give you a good idea of some of his projects. How he found them, what he did to repair them and a bit about the financing. Not in fine detail but clearly a good overview.

The stories are a bit engaging. You need to like property management if you are going to follow in Mike's footsteps. You also get a sense that the deals reflect a bit the general market conditions in his area. I think Mike mentioned that 1% of the rentals in the immediate area are owned by companies Mike controls.

John Corey

Donny Random · Answer

Thanks John, I will be sure to check out that blog. Sounds interesting. 
Hope you are having a great day.  :wink: 
d

Donny Random · Answer

Mike-

How do you find/ market to distressed landlords? Do you rehab? How do you find the money to rehab? Your own money? 203b? Something else?

Jon-
Thanks for the reply, good luck with the search! :)

Jon Holdman · Answer

No, I don't have any rentals.  I've been doing hard money loans.  I continue to look at my market, meet people, and try to find properties that have good cash flow, after all the real expenses.

Jon

Michael Rossi · Answer

d-Random,

There are many ways to find 2% properties if you live in flyover country.  If you live in over-priced bubble areas, it may be all but impossible to find good rentals and in those areas I wouldn't start a rental property business.

There is not ONE WAY to find great deals.  As you said, foreclosures and REOs can be good deals.  I get most of my great deals from distressed landlords.  I also get deals at foreclosure sales and auctions.  What have YOU done to find great deals?

Good Luck,

Mike

Donny Random · Answer

OK, thanks for the explanation Jon. So, how do you get 2% properties? Are they mainly foreclosures? REOs? Rehabs? SFR or multi?