All Forum Posts by: Alan Grobmeier

@Chad Bailey, Candidate #1 is out for sure.  I tell ppl when they fill out an application NOT to lie.  After all, if they will lie on an application, they will lie about the 'big' stuff too.  In my world a lie on an application is an automatic rejection.  

My comments to applicants are as follows:  I don't care what you've done.  I've either seen it or done it myself.  Tell me about it and we will see if we can work it through.  Don't tell me and I find out, you are automatically rejected.    

Candidate #2 is a maybe to doubtful. You have not told us if this is a SFR or MF property. If it was SFR, I'd take the state max as a security deposit to limit my risks.

If it is a MF, it's a hard no.  

Hope that helps. 

I do the same things as @John Underwood, but my tenants don't even call me!  I use home warranties as my first line of defense.  My tenants call the home warranty company FIRST.  Then, if it is 'huge', I get involved.  

And no PM will get better tenants than I do.  I choose tenants, they don't choose me.  ;-)  My average stay is about 4-5 years.

I only see a few reasons you need a PM.  Some of those are as follows:

• Large scale, I'd say over 30 doors.
• Afraid of tenants, place purchased is in the hood.
• Physically located thousands of miles from you (CA investor investing in Ohio, for example).

If you have decent properties you won't have to 'chase rent'.  

What's the first rule in real estate?  Location, location, location.  ;-)

@Mike Healey.  Looks great!

@Reid Kelley, get a Cali real estate attorney to help you.  You do this ‘wrong’ and your tax bill can go up thousands!

Best of luck.

@Chris Hughes, str’s are very time consuming when compared to LTR.

I’d add more LTR’s (slowly) and watch the positive cash flow roll in. 

Best of luck!

@Jeff Cunningham, I use chase quick pay.   It’s free and everyone can use it.

Best of luck!

@Mike Healey, I don’t like to rent to ‘roommate’ scenarios.  It always goes bad.  It just depends on when.

Marrieds are a different deal.  I look at combined income.

Hope that helps.  

@Michael Baradell, I will attempt to 'qualify' my statements before I make them. I have never owned an 18 unit location.  But I have owned a 4-plex with a partner.

I think your vacancy rate is low.  A 5% vacancy rate equals .9 units per month being vacant.  The fact that this is your first complex will be a learning curve for you.  You will learn, hopefully quickly, what to do and not do under certain scenarios.

I would budget at least 10% vacancy, maybe 15%.  $hit happens.  Ppl get evicted, move in the dark of night w no notice, etc.  Keeping them mostly full can be a chore.  Keeping them ALL full can be a Herculean effort.

Our own experience on the 4 plex was that half the time 1 of our units was vacant.  When that happened, we made a little money, but not much.  That's 12.5% vacancy no matter how you cut it.  :-( 

My former partner owns 32 doors now & is on eviction 50-ish.  Its the nature of the game.  

Hope that helps.  Best of luck!

@Anthony Wick, not that easy if the tenants have a multi-year agreement at a shamefully low price.  

Usually I have seen this done where the tenants were friends (or relatives) of the seller.  The seller is gonna get hit, but doesn't want his/her friends to suffer.  So they lock in a 3 year rent deal at a less than market rent while selling the property for market.  The sale price looks ok, but the 'baggage' makes it a no go.  

That's the only possible 'minus' I could see.  Otherwise, all ahead!  ;-)