All Forum Posts by: Alecia Loveless

@James Harryton I have been filling up a building with high quality grade materials and amenities. My prices are a bit higher than market value.

Every time I have listed a unit I get tons of Facebook trolls stating that I should be ashamed of myself and that my price is too high.

When I rented the first unit in March I landed a quality tenant in the first 2-3 days.

When I just rented the final unit about a month ago it took about 20 days to land a solid tenant.

I think if your property has upgrades that make it worth more you may just have to wait a little longer as it seems the overall rental market is taking longer.

If your property does not have additional upgrades that make it worth more on the market then you likely need to drop the price.

@Andre Brock My contractor has been bringing me leads. He works with many investors and hears about things they want to sell way before they’re ready to list them with a realtor.

My last deal was a 6 unit. I put 20% down through my local bank on the first mortgage. I needed $35,000 for a new heating system so the bank gave me $28,000 (80%) in a business loan for 60 months which has no prepayment penalty. I took a 3rd loan of $45,000 from a family member on a 36 month non-recorded loan to help with the down payment costs.

The deal cash flows minimally initially then after the second and third mortgages are paid off it becomes a cash flow cow.

Network, network, network.

@Cynthia Lee Depends on your jurisdiction, your relationship with the tenants, and your end game plan.

In my state you can accept partial payments and still move forward with the eviction.

I have 2 sets of tenants that I have had considerable problems with collecting the rent over the past year. I do accept partial payments from both and eventually they have both managed to get caught up.

I would not recommend going more than one full month behind.

Generally I start the nagging emails and texts after about the 15th of the month and depending on the response I deliver notice by the 18th. You can argue I need a property management company and that I’m too lenient but this system is working for me. I don’t want to just evict otherwise great tenants. Our local towns and rental assistance programs really appreciate those that try to work with their tenants which has helped me several times through easier permitting processes. Not every town is as small and interconnected as the ones I am in.

@Thomas Loyola My stuff is probably B- class if you take into consideration the actual criteria for classes.

I generally plan for 5% each Vacancy, CapEx, and Maintenance.

My area generally has fairly long term renters. I’m currently averaging about 3.8 years per unit. My only real turnover has come from needing to raise rents to market value. Also my area has a low volume of available units which generally means it’s easy to get vacant units rented quickly.

Usually I don’t buy anything that I suspect is going to have lots of long term maintenance issues. I know you can’t predict this but I try to get quality purchases which helps.

Once you’ve been doing this for a while you will be able to tell the difference between well maintained properties and neglected properties. Sometimes it’s obvious sometimes less so.

Starting out I was using 7-8% but have moved to less over time. I think 10% would be more than enough. Certainly if you go turn key you could consider less for maintenance and CapEx. Once you've have a feel for your target market you can adjust the vacancy rate accordingly.

@Nina Ning I do not play detective or require past rental payments to qualify for my units.

If the credit items reported are up to date with no late payments that is generally good enough for me.

However cash is a hard no for me because I feel having it around and transporting it provides a security risk for me.

If you feel like something is off with your applicants it probably is. Follow your gut feeling and keep looking for other applicants.

I have 2 units I constantly have to chase for rent and if you can avoid this by looking for additional applicants I recommend it.

We’re at November 25th and one of my 2 is late again and now applying for rental assistance for November and December rent because she can’t make ends meet.

Don’t do it. Find another applicant.

@Matt Wan From overseas I would suggest buying in a market that is readily and easily accessible from one of the airports you can conveniently get to. If possible I would try to stay within an hour drive of one of these places.

I have 2 properties (10 units) that are about 40 minutes drive from my home. I do not visit them as often especially during winter months due to the distance.

As an overseas investor you likely won’t visit that often but there may be times you need to and you won’t want it to be a huge amount of difficulty getting there.

@Marc Shin I used both at both of my B&Bs. In the morning when we served breakfast to lots of people we used a drip pot and poured it into a large urn type percolator. The coffee tasted phenomenal.

For the rest of the day we had the keurig for guests that wanted one cup of coffee or hot water for tea.

I think in 22 years we only went through 3 keurigs and on one I complained to the company about the problem and they sent us a free replacement machine.

I would suggest offering both. The water tank cleaning and descaling will need to be scheduled somewhat regularly but probably not between every set of guests. Maybe every 2 weeks.

Am not sure if you offer any pods or coffee included but would suggest buying the large 80-100 count boxes and having a small decorative basket/display with about 10 starter complimentary pods on each stay. Then the guests can buy more if they want or get whatever drip coffee they like.

I dont like the manufactured pod holders/carousels because they hold like 24+ pods and providing that many will get expensive quickly.

@Jorge Liang I have regular exterior pest control at several of my properties.

Two months ago a tenant in one of these buildings complained about fleas.

We told her it was her responsibility (as outlined in the lease agreement similar to what’s been posted).

We suggested bug bombs in each of the larger rooms. However a key to that is that you need to bomb several times due to the lengthy life cycle of the fleas once they get inside. I have heard it is once a month for 4-5 months.

My tenant ultimately rehomed their cats (which had been indoor/outdoor despite my policy that all cats are strictly indoor) because they found them to be too much responsibility for their current situation which made me sad.

@Bruce Woodruff I have never done a sewer scope. I have done several independent septic inspections.

One recent property I bought the listing agent disclosed that it needed new sewer lines. I did not investigate further but took them at their word.

We replaced the sewer line and it cost about $8500. Most of the cost was the backhoe to dig up the line. It was probably about 30’.

@Troy L. I just bought a 6 unit property that the rents are well under market on. I am raising one rent at a time because I do not want a ton of vacancies.

In this instance the tenant questioned the other 5 and determined their rent was the only increase.

I had to explain that I planned to raise them all and that theirs was just the starting point.

There should be no legal issue with you just raising one rent. I would think the only possible issue would be if you raised it above local or state allowed amount, or perhaps if you raised it a bunch above market. Likely just raising it above market rent would be considered stupid, not illegal because then you’d have a vacancy.