Rental Property Investor · Avon, IN · Member since 2015 · 22 posts · 7 votes
Just looking for some motivation or even ideas that can help me get back into the groove.
Current Situation
I purchased a package of multi family properties about a year ago - 28 units total. At the time 4 were rented out and most were in not really in condition to live in. I was able to work on them myself for awhile and get some renovated but currently have 7 liveable and rented... I took a promotion at my full time job about 3 months ago and am now back to the world of working 70-90 hours a week at this job which does pay very well but is exhausting. I have a “guy” that helps with the properties but also has a full time job that is working him about 70 hours a week. I’m at the point of losing about $1.5k a month with the total package but purchased them right and have a ton of instant equity in them. Really just in one of those moods where I can’t determine the next most logical solution or approach. The goal is to use these properties as a way to get out of the corporate world and full time run my own company. I have almost zero time currently to work on anything with the rentals just stuck in the mud... Ideas? Thoughts? Motivation?
Rental Property Investor · SE Michigan · Member since 2014 · 4k+ posts · 6k+ votes
5y
With tough love...
You are treating this like a hobby, not a business. A year has gone by and you've only gotten 3 of 24 down units back online. What if you lose your job? How will you feel a few years from now telling your young child that they have to find a way to pay for college themselves because you blew all your savings "playing" in real estate? Or, imagine another scenario where you could pay for them to go to college and grad school because you did a good job managing these properties. You could arrive at either of these extremes based on your actions now.
Personally, I'd get some cash together and hire a GC to get ALL the other units rentable. There is no reason you can't have all of them ready within one month, two at the latest. If you need cash, consider selling off a couple of them to put cash in your pocket so you can fix up the other ones. If time is your most constrained resource, hire a property manager to lease-up the units and manage them day-to-day.
Rental Property Investor · SE Michigan · Member since 2014 · 4k+ posts · 6k+ votes
5y
With tough love...
You are treating this like a hobby, not a business. A year has gone by and you've only gotten 3 of 24 down units back online. What if you lose your job? How will you feel a few years from now telling your young child that they have to find a way to pay for college themselves because you blew all your savings "playing" in real estate? Or, imagine another scenario where you could pay for them to go to college and grad school because you did a good job managing these properties. You could arrive at either of these extremes based on your actions now.
Personally, I'd get some cash together and hire a GC to get ALL the other units rentable. There is no reason you can't have all of them ready within one month, two at the latest. If you need cash, consider selling off a couple of them to put cash in your pocket so you can fix up the other ones. If time is your most constrained resource, hire a property manager to lease-up the units and manage them day-to-day.
Rental Property Investor · Member since 2020 · 1k+ posts · 1k+ votes
5y
We are all limited by 2 things in this business time, and money. It seems you have very little time but a good job that pays well so you are going to have to start contracting more of this out than you are used to if you are not willing to devote what little free time you have to this. By letting these units sit vacant there are 2 costs, one the most obvious being holding costs, but also opportunity cost of not having them rented which may be very heavy but not as noticeable. Think about how much money is it going to cost to get these other 21 units rental ready, how much of a premium will you need to pay to get them there, and what will the revenue be once they are cash flowing. In my opinion you are in a spot where you are going to have to spend more money than you planned to make more money but I think over the long haul it should pay off. It seems by trying to do it all yourself you may be focusing too much on what you would have to pay to get it done and the savings is actually costing you money, I struggle with this as well. Good luck and don't loose sight of the end goal and make sure you don't burn yourself out before you get there.
Real Estate Broker · Temecula, CA · Member since 2014 · 992 posts · 782 votes
5y
Either sell asap, or bEtter: Hire someone to fix up the places for you.
Each month vacant is costing you money, so get someone to work for you asap.
Provide a list of things needed, and you can be your own general contractor- hiring subs for everything. With so many units, you can use economies of scale to make it work. Hire an electrician to do all electrical, a plumber to replace all toilets, check all plumbing, etc. and get it done!!!
You should have more rend coming in by February. Set a goal and hire out!
Investor · Singapore · Member since 2013 · 1k+ posts · 3k+ votes
5y
Whats the average rent per unit? If its even $500 the 21 units not being rented could be earning $10K per month. Does your day job pay that much that you can piss away $10K/month?
Investor · Riverside, CA · Member since 2019 · 8 posts · 1 vote
5y
Find a PM that offers construction management services. Most charge 10% for construction management fees, however, over the course of interviewing numerous of PMs in Indy, I found ONE who caps construction management. He also discounts monthly management fees for multiple properties. Jason Warner with Indiana Property Management. He is a great guy and I have talked to a few others who have used him; have not heard a single bad comment about him. If you're going to use a PM for construction management and obtain bids from his/her contractors, I suggest obtaining independent bids from contractors of your choosing to ensure proposals obtained by the PM are aligned with market rates. Finally, I recommend joining the Indy out of state investors group on facebook. The group has been an invaluable resource for me and the cooperative spirit and willingness to share information have amazed me. I never imagined that "competitors" would be so generous with information and take enjoyment in seeing other investors prosper. Happy to share any local contacts I have that could help your situation or chat more about any of this. Good luck!
Rental Property Investor · TN · Member since 2018 · 2k+ posts · 2k+ votes
5y
Have you done a complete inspection/plan for each property? If you have already done that, it may be worth ranking the properties based on what they need. Then you can fix the ones that cost the least to fix first.
I am not a real fan of doing all the plumbing first, then the electrical, etc. as you dump a lot of $ without benefit until the end when you paint and do the floors....and can rent them.
If you rank the properties, maybe get a PM to oversee doing the top 1-3 properties and getting them rehabbed through rented by say early January. Then use the rent money from these properties to fund the next set of properties. If you do 3-6 every 2 months you can knock them all out in 2021...using the PM.
But as with any new relationship. Start small with 1-3 houses and see how it goes with the PM. If they do good give them another batch. If they do poorly try the next batch with someone else.
And keep in mind that the PM that can rehab good may not be the PM that manages the finished units well.
By doing a few at a time, you should be able to do a weekly call to the PM for an hour or so of your time and get them done with a little less stress in your life.
I kind of went through this issue a few months ago with my rentals. I bought 6 houses and a 4 unit apartment, all unlivable in need of major work. My kids and I did most of the work, not plumbing, roofs, HVAC or electrical, but all else. Then 6 months ago I adopted a newborn baby. So life changed. I can not patch drywall, paint, do floors, plan kitchens, demo baths, decks, kitchens, nothing with a baby who is now totally spoiled and wants to be held always.
It was hard to hire people to do things we can do, and to spend the $. But in the end we got the final things done to get 3 houses and the 4 unit apartment all done. (one house was already done.) We were soooo close with all of them, just not quite there. I am glad we hired out the last 2 weeks of work as it would have taken us months to finish them. Unfortunately we did HVAC on all houses, electrical on all houses, roofs on all the houses, etc instead of finishing one at a time. Wish I had done one at a time.
2 houses left to do...will wait until after the first of the year....and hire out most everything.
Realtor · Indianapolis IN · Member since 2018 · 464 posts · 339 votes
5y
@tim dunlop -- I am in the same boat but in a much smaller scale -- I had a GC do a flip and it was great, made money right away. In the middle of a project now, decided to do it ourselves and it is taking forever. You are bleeding money! Call Nick Guilioni - he is a great local resource. I also would be glad to talk to you and get you connected with some local contractors and lenders if that is what you need. Great advice from everyone on this forum -- now you need to JUST DO IT!
Turn key provider · San Jose, CA · Member since 2010 · 4k+ posts · 3k+ votes
5y
@Greg Scott is 100% correct. You're not treating this as a business. You purchased 28 units a year and a half ago, worked on them yourself for awhile and only 7 are liveable and rented. I'm not sure how much more motivation you need than having 21 units sitting vacant losing $1.5K a month. You work 70-90 hours a week and have a "guy" that helps but also works 70 hours a week. You need to stop the bleeding and hire people to get the remaining units renovated and rented.