All Forum Posts by: Alan Grobmeier

@Ben S.  

I live in AZ, so you have to consider than when you read my answers.  I put down 100% floor tile in ALL my places at some point in time.  My reasoning is that flooring will be something I will never have to 'visit' again.  Although carpet is less expensive, the durability factor is much less.  In addition, anyone that has carpet has to worry about pets.  By putting in tile I can accept any pet without too much worry (although I did turn down an applicant that had a pet gorilla, LOL).  This fact allows me a larger tenant pool of renters AND increased revenue in the way of non-refundable pet deposits and rents for 'fluffy'.

As far as kitchen, I go stainless steel appliances and laminate counters.  If something is messed up, I don't want to have granite (which easily stains and needs a lot of care).  Granite is way more expensive than laminate.  

Since we don't have many metal roofs in AZ, I'd go with asphalt.  It has to be replaced every 30-40 years, but thats ok with me.

ALL my places have ceiling fans in ALL rooms.  But again, I am in AZ.  It's not a necessity, but it makes my places standout vs the competition.  Same with shutters.  I have a guy that puts in shutters for $12.99 a sq ft.  If you pay for mini blinds a couple of times, you could have bought shutters. 

These items are for LONG TERM holds.  I define long term as 10+ years.  And by doing them one time, you will not have to do them again.    

@David Zheng

It doesn't matter. Most have 'SOS' (shiny object syndrome). I got up in a REI meeting, TOLD them what my business model was, and was promptly laughed at by most of the 'trailer people' in the room.

@James Wachob  I can honestly say I have NEVER seen a breakdown as to what constitutes an A, B, or C property.  I always thought it was more 'subjective' than objective.

@Andrew Johnson For high interest rates and quick turn arounds an investor SHOULD be using IRA money, not personal cash. Otherwise Uncle Sam will 'rape' them at their highest tax bracket for short term capital gains.

My .02   ;-)

@Ryan Keenan I dont know anything about a 25% equity you have to have. But I DO know that your DTI needs to be 'ok' when you rent a home behind you. Perhaps that is what they are meaning?

DTI really sucks in that the banks don't take your real numbers. For example: if I am getting $1000 a month in rent and my mortgage/expenses is $500 a month, it would appear that my DTI on this is 50%. But my experience is that they 'discount' my $1000 to $750 and THEN subtract my $500. Although I am still cash flowing as far as the bank is concerned, my DTI for this 'transaction' is 66%. Too many of 'these' and I am shutdown by the bank. :-( Next stop: commercial or portfolio lender, which equals higher interest and more fees.

@Shiloh Lundahl  All you have to do is listen to the pitches on the radio, TV, etc.  EVERYONE is getting rich beyond their dreams in real estate.  The 10% you are offering is peanuts compared to what they BELIEVE they should be getting.

With regards to your rental:  Do you wish you still had it vs your training?

@Denny Moody  This is my FWIW:  Although La Mesa is nice, it is NOT going to be a good AirBnb location when compared to the beach cities.  It is going to be the last thing on most lists, just before El Cajon and Alpine.  LOL.  My family and I are coming out on vacation this summer and we are staying in Mission Bay.

However, if you were to build something on it, it would probably make a great long term rental.  Depending on the size, $2000 a month or more.

My .02 

If you have a good credit card you can get those 12 month credit card 'advances' at 0% (there is a 2-3% processing fee)

@Tim Johnson  

My process is a little 'unique'.  I have open houses and take ALL applications for free.  Once I go thru them I stack rank them.  

I go back to the #1 candidate and point them to experianonline.com for credit and background checks.  The tenant THEN pays for the screening process.  This allows the tenant to be secure in knowing what they are paying for and it's not a 'revenue generating' event for me like it is PM's and other landlords.

My properties are pretty nice, in good school systems, so people have a tendency to be honest.  Especially if I demand it.  My philosophy is I don't care what happened, just tell ME the truth.  I have either seen it or done it myself.  You will NOT surprise me.

I do have 'hard stops', 3X rent = income and no evictions.  Other than that I am looking at who can afford my properties and who I think will stay the longest.  I am in AZ where a LOT of ppl lost their houses, declared BK, etc.  Credit scores are SOMETIMES meaningless.  

Hope that helps some.  

No.  But I live in AZ.  I zeros cape ALL my yards and shut down the sprinklers.  ;-)