All Forum Posts by: Marcus Auerbach

@Brian Karlow that's a great point and I have tried it before with Q4 leases and structured them so they come due in spring or summer - I had the same experience as you, no issue for the tenants - it's also in their best interest to move in spring or summer: nobody in his right mind volunteers for moving during the winter in Wisconsin. Thanks for the reminder, it's been a while since I had to do that.

@Marina Shlomov - great advice, it makes perfect sense - I'll definitely try that tonight. Craigslist has spoiled me a little bit the last year, so I never had a reason to explore something else. My natural target audience is paying premium rents for nice homes and are somewhere in the area between blue collar and white collar. I have noticed that professional pictures make a huge difference if you want to appeal to a certain audience, portlets.com probably allows for a nicer presentation if I remember correctly. Now I know what I am going to be doing after dinner...

To be blunt: if the house is only worth 45k forget it. You are quickly in the $15-25k area to replace the wall, depending on project scope and size. Sounds like you can't use an excavator, so all manual labor.  They would have to shore the dirt to keep it from coming into the basement when removing block, possible replace drain tile etc. Most important is always to remove the root cause: in this case ensure proper pitch of the driveway away from your house;  reality is often the driveway is pitched correctly - away from THEIR house. 

Well said @Joshua Woolls

Well said, I could not agree more, there is a social responsibility that comes with holding properties. In return for growing our business we owe it to the people in neighborhoods that we invest in. Properties rented in distressed condition are an eyesore and the owner is not only milking his property but is also milking the neighborhood. There is nothing sustainable about it and there is no value created for the society, in fact it's a parasitic behaviour. I disrespect people who don't take their social responsibilities serious and I am not holding back when I have a chance to tell them.  

I start to pay a lot more attention to seasonality of the rental demand and I am wondering what the Milwaukee BP comunity is seeing. Looking back this year typically I always had one single family house for rent, either because we just finished rehab or because someone is moving. Most of my advertising is on craigslist and I started seeing demand go up quite a bit in spring, typically I would get about one email a day. Not much of a surpirse demand kept going up as days got longer and in June/July I was seeing sometimes 5 emails a day and had a home rented within a week. I ended up renting a house that we just started demolition on - talk about a hot market. Now here we are in September and things are slowing down fast -  I am down to 3 emails a week. What are you guys seeing?

@George P. nice job, I dont share the concerns that Anthony and Jay have raised. Probably that's because I am doing the almost exact same thing. Same type of houses, same strategy. As long as I end up with a property that is structurally better and younger (capex) than most comps and I stay below 75% LTV with good cashflow I think it's a solid deal.

I always try to have one house for rent, one house in refi, one house in rehab and one under contract - it's a tricky balance and almost never works perfectley, because they are moving at different speeds through the pipeline. Keeping the pipeline stuffed on the front end I have recently started sending out yellow letters as I am not finding as many forclosures as I used to. I agree with you that I am almost never on budget, mostly over, but I try to bring the mouse in a condition where all components have at least 10-20 years of life left (which means replacing a lot of course).

One thing that you do and I think I will change is to not finish the basements. It provides a lot of value for a family in a 1200 sft ranch to have a finished rec room downstairs, but I know that I can't really justify that financially. Best case I can ad some good will for lower vacany rates. Whats your take on finished basements? 

Nice job and thanks for notching security up again. Good thing is I am not getting calls from Telemarketers and have no problems with spam - but I have one suggestion. I use my an android tablet when I am in the kitchen having coffe in the morning and browsing BP (like every normal person I suppose). I found its tricky to open up the inbox dropdown and navigate the menue on a tablet. I got pretty good at it but I still need three or four atempts to get to my inbox. I was recently in Denver and thought about stopping by to complain in person, but in the end Little Man Ice Cream won and I thought I'll drop you a line. Maybe somone on your team has an android and can verify that...? 

@Dawn Anastasi well done, nice job!! Love the grey marble! How did you get the bushes so nice?? It seems like once old Yews are so overgrown and you try to trim them back they are nothing but bare trunks! 

@Barbara G. I think I understand how you feel, I've been there with a property before I even started investing. And it was a terribel time, but I got through it and I really learned a lot during the process. Calm sea does not make for a good sailer, right...?

OK, but let me tell you this: from reading the story here I get the feeling that planning is not your strong side. You have the guts to pull the trigger and the confidence that you somehow will figure it out (which is awesome), but either you dont have much of a plan or you dont stick to it (deck added, trees removed..) I looks to me like you are a poor planner, at little bit chaotic maybe and not very organised? Sorry I really dont mean to insult you, but I'd rather want you to be honest with yourself so you can do something about it. My guess is that your bank is sensing that too, thats why they have so many questions and keep torturing you.  So if this is true ( again, I dont know you, I am out on a limb here) you need to get an acountability partner. Someone you can show your plan and have it criticised and hacked into pieces. Then you can adjust the plan and try to stick to it. Your acountability partner can also help with that. One of my favorite american sayings is: Plan your work and work your plan. Most of the time I screw up and look back I usually failed at one of the two. Hope that helps ;-) 

@Dave Carpenter 

yes, that's the basic concept. I have discussed it with a couple sellers earley on when I was still interested in MF but never actually closed a deal. The big question is if you can structure the deal in a way that the numbers work for both of you. The master lease payment needs to be high enough to be attractive for the seller, cover his PITI and then some. And you need enough cashflow left to acumulate the down payment. Good thing for the seller is he pockets the mortgage pay down, gets the full tax write off but does not have to deal with the property anymore. Also he avoids or deferrs capital gains tax.

As always, please consult with your lawyer and CPA ;-)