All Forum Posts by: Aaron Hunt
Aaron Hunt has started 10 posts and replied 645 times.
Post: What To Do When Landlords Refuse to Lower Their Asking Price
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@Jay Hinrichs
Learned this after my first vacancy turnover!
Lost 2 months in rent cause I held my ground on price point not doing the math and assuming my ask was market price. Had I listened I would have dropped rent rate and only lost half the amount.
New person moves in, at $100 less/month, and bails 6 months early, leaves large security deposit voluntarily.
Increase rents back up by $100 (this time at PM recommendation) and lease is signed with just 4 days vacancy.
Moral of story: Once you vet and hire your PM, trust the PMs to do what they do best.
Post: Significant Net "Losses" on Taxes despite Positive Cash Flow
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@Andrey Y.
I’m in my 30s, my properties are Class A about 2,400 miles away from me, and managed by property managers at 7% of rent. Don’t plan on stopping.
Post: Significant Net "Losses" on Taxes despite Positive Cash Flow
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@Andrey Y.
I’m a physician...and doing both, so I agree with you on that one.
Post: What can we legally ask in screening a felon? (sex offender)
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OP is kind of in a jam with the property itself.
It sounds like this is a slum-ish rental if there’s multiple offenders lingering around who got accepted in other rentals - so it would be hard to say no.
Slim pickings it seems?
Originally posted by @Account Closed:
What did YOU contribute ?, you have nothing to say .....why are you still here ???
My recommended reading for you would be Olde English Witchcraft
Forget the $30k home. Need $30k in punctuation and typing classes. What the what. Your posts up and down this thread are challenging to read. No wonder you can’t get a straight shot answer and keep getting frustrated.
@Ashley Hamilton
$1k-30k = ghetto. all day. any day. anywhere. everywhere.
For that matter, Detroit itself is one giant ghetto.
If you can hack it, great, but this is not something I’d ever encourage remote investors to do.
Post: Have you ever not been to a rental property ?
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@Jason Gamio
Doing it as we speak. Keys get handed over tmrw. PM team takes over immediately.
Post: Property Manager Not raising rents as requested
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Originally posted by @Joel Owens:
Property manager is one of the lowest paying, most demanding, typically crappiest jobs out there in real estate. To be good at it you really have to love it and want to do it.
I will say this. The top 100 left to squeeze out in rents tends to be the hardest.
Alot depends on the age of your properties.
There is more loss than asking a higher rent and if it doesn't rent lowering it back down. The issue is an existing tenant might have been living in the property for years. To them the dents,dings, scuffed paint, worn carpet etc. looks normal. They move out and another tenant wants to move in and with a fresh set of eyes they notice everything. So now you might be spending thousands to get rent ready again at an acceptable level a new tenant would take the unit in versus an existing tenant.
If you get another 25 a month in rent but spend thousands to get a new tenant in per unit then value might be increased on the back end but will take a long time to get the money back in years.
The property manager maybe the communication system could be improved or maybe there was a misunderstanding it's hard to know. Inflation average is generally about 3% a year. I would maybe tell the property manager you respect their opinion and expertise and for them to prepare a detailed report outlining their postion why a 25 dollar annual rental increase is not sustainable. It would be telling if they have hard data to back up their position or were just lazy and did not want to deal with a tenant leaving, having to manage a rent ready rehab with the owner usually complaining how expensive it is costing, and landing a new tenant.
We usually look at a LOYALTY factor with tenants meaning - How long have they been there? Have they always paid on time? Have they taken good care of the property? etc.
My clients on the commercial side are on another level generally. These are people already millionaires to some worth tens of millions or more and their business or job throws off close to seven figures a year to them personally. So they care more about tax shelter, high quality property and location, cash flow is usually 3rd or more down on the list instead of 1st.
When net worth grows the mindset tends to change for many on accepting less headache for less yield. Someone with 200k at 10% return is only 20,000 annually. Someone with 2,000,000 at 10% is 200,000 a year for themselves before taxes. Huge difference in being able to be comfortable off of the cash flow coming in.
I definitely agree about that last $100 being the toughest and for me, not worth the squeeze. I leave cashflow on the table with mine. It’s the price I pay for being able to pick and choose my tenants.
Examples: We just filled one of my vacancies this week with a credit score > 700, monthly income over 6x rent, no evictions, no crim history, and probably never told a lie in their life.
Post: Property Manager Not raising rents as requested
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@Jay Hinrichs
I don’t even really raise on my Class As, except in case of vacancy.
The appreciation and zero headache tenant is key for me. I have a rockstar PM team, and they are always confused when I say I’ll take care of minor stuff. Yet, they love working with me. They make my life incredibly easier being a very remote landlord, and I make their life easier by not being Scrooge to our tenants.
An extra $1200/yr in my pocket isn’t gonna do squat, when that same person is paying down my mortgages at $4k/yr and the property is appreciating at 6-10%/year.
Post: Property Manager Not raising rents as requested
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@Jay Hinrichs
That’s because all people talk about or think about is cash flow...that $25 is somehow supposed to make people financially free or wealthy.
The one or two months of vacancy across 1-4 properties to get that extra $275/year x 4 in this case, is never mentioned. Yet that vacancy cost is likely the equivalent of 2-3 years in cash flow (depending on rent rate).
Cash flow is King! Multi-family is King! *double facepalm*