All Forum Posts by: Al D.

@Kajohn Chen Check your contract with the existing agent to make sure you won’t owe them any fees for some period of time after letting them go. I’ve seen contracts that have this provision. It is a fair expectation, in my view - so, even if the next PM may have it, it’s fine.

But: Personally, I’ve entered into such contracts only if/when that section was amended to read something along the lines of “...unless terminated for cause.” If the future PM won’t budge on such stipulation, it’s a warning sign to me (but does not necessarily make them a bad operator - they may just stick to “Our lawyer told us not to change anything” explanation/excuse. I just have my own quirks - due to prior bad experiences - so, such a small amendment/stipulation should not be a big deal for their “lawyer.”)

Other than that, I expect the oncoming PM to get in touch with the outgoing one - once they’ve been told by me that I am letting them go - to make sure that nothing falls through any gaps during the transition, including advising the tenants about whom to call in an emergency after a specific date.

@Jason Ma To clarify your advice: When you say “a seller,” do you mean an actual seller for a listed property? Or just a homeowner who you think may want to sell for some “distress” or whatever reason, but hasn’t listed?

Who are you in this scenario? A wholesaler? A real estate agent representing the buyer for a (listed) property? A buyer for yourself making cold calls? Someone else? Please clarify the scenario.

@Luke M. PM’d you.

I don’t know how anyone can make a prediction that Covid will be in the rear view in about a year. I wouldn’t make such optimistic predictions. But, for the sake of humanity: I pray you are right.

I know of someone who leases a number of rentals in the Bay Area that are owned by investors overseas. He pays the owners a flat monthly fee (“rent”,) and rents out the SFRs through the likes of Airbnb, obviously furnished. His income is the rent arbitrage. Was, actually - he has no more bookings.

While the owners agreed to some concessions since March, he is still contractually obligated to pay them rent, regardless of his (lack of) income. I don’t think his crystal ball is telling him that he just needs to carry the loss across all these properties for 9 months - he’ll take what he can now, which suddenly includes long term tenants, furnished or otherwise. That is just one story, a kind I don’t read about on the news.

Some hotels have had to close. Others have furloughed some staff. They don’t have a lease option, and you can only drop the price per room so much before it makes no sense.

Math/motivation is different for everyone. I don’t do STRs, so, for me, this is anecdotal. But I wouldn’t discount that there is/will be additional competition for LTRs made up of formerly Airbnb-type properties. When you couple that with jobs losses and ever-higher ability/requirement to work remotely (for those who can) from locations that are cheaper, I absolutely expect to be looking at increased inventory for LTRs, especially in hot tourist markets. What kind of drop in rents that will translate into I have no idea. Glad you got someone already.

@James Runkle I am sorry about your experience, James. I bought from them in 2016, and inherited a tenant they had placed there before the sale. That tenant defaulted in a few months. The place sat vacant for about four months after the eviction. The replacement tenant defaulted after a few months, too.

While the original tenant may have been well-vetted - maybe - the subsequent one had no business getting into the suburban A class property, given that she made less than 2x the rent, according to the application I received subsequent to letting REI (then the name of AWB's PM arm) go. It is possible that she already did not have a job at the time of the application, as she claimed to me she lost it later (my "research" on her employer suggested she has already been unemployed.)

As is the case with you, AWB “owed” me rent for 12 months after my purchase; though, I understand that this guarantee may have been tweaked since.

I finally got a good tenant - by a subsequent PM - but that tenant recently bought their own house. I then ended up selling this property. Market worked in my favor for appreciation, while I was seeing rents drop and months of vacancies.

If I were to be buying there again, I don’t think I’d be going through a “turnkey provider.”

I am curious: Did AWB happen to make any claims to you about their vacancy rate, tenant approval process, how good their Section 8 tenants are, etc. before you decided to buy from them, rather then from another turnkey provider?

Also, if you don’t mind: how did you first hear about AWB?

@Ernesto Gencarelli Jr.

Congratulations on your purchase. It kind of sounds like it’s your first.

I am not sure whether you meant that “the same type of house would be close to 379000” in New Jersey or New York. It may be close to $1MM in San Francisco. But this should never - ever - play a role in your investing decision-making.

You bought in Memphis. There is a reason that the house is not worth $379k. I don’t know what it appraised at - if you had it appraised - but there is a good chance it cost around the same 20 years ago.

In Memphis, you get a higher yield per dollar spent because of additional risk that a place known as “Eviction Capital USA” carries:

https://www.citylab.com/equity/2017/10/where-evictions-hurt-the-most/544238/

I am not saying that you made a bad investment (I don’t have enough data to assess that.) I would only like to put in my 2 cents about the potential considerations you should not be making with your future investments. This is definitely one.

@Gagan Khela I am sorry: I could swear I asked BP to remove the above comment I had made, and they made the exception. Clearly, this one is still up... I withdraw my recommendation.

I am talking specifically to you, RLC Investor Group out of Memphis, TN, as well as all other telemarketers.

First, let me explain why I am p*ssed off: On a Monday in August, at 0604 hrs (that’s 6:04am,) my 79-year-old relative was awakened when her home phone rang.

Unfortunately, once she speedily - thinking it was a family emergency - reached the phone, she was met with the dial tone. Shortly thereafter, however, she heard a voicemail message that the “caller” left - it was a message from RLC Investor Group:

“Hey. How are you? My name is Trent Lxx. (sic) I’m calling with RLC Investor Group... because your property came across our desk... we are looking to expand our portfolio in your area...”

The cherry on the pie was the ending of the vm: “...And if you received this message in error, please disregard and have a wonderful evening.” Disregard? At 6:04 am? Wishful thinking.

So, never mind that I never did any business with RLC - which then makes this call illegal, per se - where do you people get off calling someone at 6:04 am their time with your business proposals?

Let me be clear: so far, RLC is the worst offender. But I get almost daily calls from various people/companies in Memphis. Some are live people, some are recordings like the one from RLC. But ALL of them ring - even if only once when it is supposed to be a “ringless voicemail.”

I have numerous phone lines under my name that I pay for for other people. I own properties in different names. (Please do not comment with suggestions to put my properties into some other than a human entity - I own what I own under whatever name, because that is how it suits me. And the phone number called in this case was nowhere near any real estate transaction I have ever made - they dug it up, because it is under my name.)

I understand that Memphis wholesaling is hard. But that is not my problem - or my elderly relative’s.

As I said, I get these calls almost daily. I don't want to have to sue - for thousands of dollars. It's a business for you; I respect that. But if you continue to do it with no care for others, you'll only have yourselves to blame. Perhaps you believe that your LLC will protect you...

I am keeping a log of all calls going back to April now. It’s a fair warning.

Does anyone know anything about them? Everything on their site is from the company - not a single name of a person mentioned. I’d like to know whom I’m dealing with. -TIA

Looking for a trustworthy “handyman” in Wadsworth, Ohio. Current projects include: (1) Refinishing a wooden deck, (2) refilling a compact sand driveway, and (3) replacing a screen door (that will likely require some door frame work this time.)

Also looking for a trusted plumber-excavator to replace underground sewer line.

Thank you.