All Forum Posts by: Andy Webb

We were 5 or 6 years into building our rental portfolio before I got my license.  We got along just fine without it before. I see it as giving me an opportunity to add income streams however (listings for other investors; our own flip or rental listings - save on commissions; the occasional retail transaction; etc). If you want to invest, I would focus on investing to start and not get distracted by getting the license.

@Michael Workman - perhaps they bought it off-market last year at a price substantially below the tax value and had the tax value lowered to match the purchase price?  This saves them taxes during the period the property is held, at least initially.  And gives them an extra bit of marketing ("low taxes!") to sell their turnkey property.

Here in Texas you can protest your tax value annually as a regular process during a set window, and you can also protest if you buy a property outside of that window if your purchase price was well below the value on the tax rolls.  

Example: we bought one this year for $80k; it was on the tax rolls at around $120k.  We showed the appraisal district our settlement docs and they lowered the value by $40k on the tax rolls. Benefit to me: I cash flow more on my new rental.  Texas is a non-disclosure state by the way.

Here is where I would be careful: in our area of late the lower value usually only sticks for a year or two, until the appraisal district reevaluates...so in 2020 I can expect my value to bounce, taxes to increase and my cash flow to decline.

You did not mention the state you are looking at, but in your situation I would check to see how the appraisal district normally behaves (e.g. can you expect the value to jump again right after you buy it?). Run your cash flow analysis with the value before it declined 50% to see if it still makes sense as an investment.  And look to see how the values of neighboring properties are trending...up or down.

Andy

@Daniel Brown - congrats on the big step!  I am curious: it sounds like this was a package deal - or did you buy each one individually?  Are they all truly in Dallas proper, or "Dallas" MSA?  How are you managing them now?

Thanks!

Andy

Looks like a newer place, so maintenance should be lower than what we see on our older units.  Any plans to sell before the 5 year ownership mark is up in order to avoid taxes on your gains (assuming you were in it a full 2 years)?

Andy

We use eRentpayment for all our properties - it is a lease requirement.  

I am curious about Zelle - aren't there caps on the amount that you can transfer? Are you using Zelle for rents over $1,000?

If nothing else, slide up to an ongoing conversation and listen. If you have your personal goals for REI laid out, be ready with a short "elevator" pitch to let folks know what you are looking to do, but I would just listen more than anything for now. And be ready for sales pitches, sometimes very hard pitches - a lot of groups are structured to market some program, software, etc.

@Mary M. - I don't charge the fee up front to take an application. I vet the application paperwork and if everything looks good, I collect the fees before proceeding with the credit/criminal/background screening.  My goal is not to pocket a bunch of measly app fees.  As for valuing my time - I sure do, so if I am going to start calling your prior landlord, work, etc, there is a cost to that.  But again, that process starts once we go hard with the background check.

Agree with @Adam Shelley - don't refund the app fee. You incur the cost of running the background check (be it hard funds to pay for a service, or your time spent calling around to employers and previous land lords). 

@Brian Ellis - that is a huge spread.  Something tells me that those are not all "like" properties.  Are you looking just at the 1-bedroom, no garage configurations?  And how do the finish outs compare?  

What do similar properties in that area rent for?