All Forum Posts by: Andrea Proeber

I disagree. I may be new to BP but I am not new to residential real estate investing and property management. It really depends on the market you are in. While I have worked with investors buying multi family and SFH many, many times over, for our market here in Ocala, buying ugly SFH's fixing them up and renting them out is the biggest money maker. Our town/county is pretty strict on multi family owners but much less ridiculous on the sfh landlords.

Everything seems to be much more expensive for multi family units as opposed to multi family.

Also, the turnover and vacancy ratio is way higher in multi family whereas you could have the same tenant for years and years with a sfh.

In a down market, selling off one sfh is fairly easy, try selling an apartment complex when nobody has cash. It's a painful experience. 

Best advice from my late grandma, a real estate broker from Ft Myers for decades: "don't put all your eggs in one basket."

Get some ugly sfh fix them up, then sell off the house with the lowest ROI using a 1031 exchange and buy two more ugly homes...wash/rinse/repeat.

But look at your market, what is great advice in one area is terrible advice in another.

Have fun!

You are so welcome Daniel. You may be able to get a discount based off the property manager sharing vendors with you since they normally have bulk work orders and keep the vendors very busy.  The PM should also be able to tell you who to steer clear of based on bad past experiences. 

It may be a good idea to check on your property manager by way of the vendors. If they constantly have new vendors they are cycling through, that may be an issue. They should have some vendors that they have been working with for years. If they don't, there may be underlying issues.

Information is power, be nosy, it can save you some headaches down the road.

Hope this helps.

Tampa is one of the harder markets to find deals in right now because it is very hot right now. I am about 90 mins North of there in Ocala. I have been doing property management for a little over a decade, and I specialize in helping investors find deals that need work and connecting them with reputable contractors that will do a good job and do it on time and in budget. I help people with 1031 exchanges and yes, I am a licensed real estate broker. I also have my own properties that I have rehabbed and rented as well.

From the years that I have been doing this one of the best things you can find is a reputable property manager. They can connect you with the people you need to get the house back in shape.

Normally they don't even charge you until the house is not only done, but also rented. 

If you opt to go it alone, that works too. The best advice I can give you on general contractors is to look at some homes that were rehabbed in the areas you are interested in, and look at public record to see which contractors pulled the permits. Then interview those contractors.

Make sure that you get a clear written estimate not only for money, but also for time. Make a clause in your contractors contract that if they go past the time allotted there is money they owe you per day that they go over. 

With investment property, time really is money.

Your property manager should also be a licensed real estate agent and should be able to tell you the most requested areas for rentals. If you are looking to flip the home instead of rent it out, check into resale. Schools, grocery shopping, closeness to jobs etc. All become a factor when selling. If it is the ugliest house in a fantastic neighborhood great! If it is a mansion in a less desirable neighborhood you may be looking at a money pit.

Either way, find someone that has experience if possible and copy them.

A great place to look for deals is on auction.com, or homepath.com 

Never, ever buy sight unseen. Especially when you are first starting out.

Have fun, it really is a big adventure.

Richard, I would love to take you up on this, but I am way up in Ocala, Florida. Let me know if you are ever up this way and I'd be happy to grab a coffee with you.

Dave, 

I love working with newbie agents, they haven't developed as many bad habits yet. ;)

If you are in or around Ocala, I am adding new members to my brokerage literally this week and again in August. I like to mentor 2-3 new agents at a time so they can work together while learning.

We also do leasing and property management so it will provide some immediate leads and quicker cash as you are getting your feet wet. It is also a great way to learn about holding investment properties. 

Best of luck,

Andrea

      (Before & After of a recent project)

                What is your "BRAT?" (Budget, Resources, Abilities & Time)

Prior to beginning your search for an investment property, you must decide how much of each of these you have, and what you are willing to provide towards this new investment endeavor.

Budget is obviously how much you can or are willing to allocate towards a investment property. 
This is not just how much you have, but also what is reasonable. For example, if houses in excellent condition in a neighborhood are selling for an average of $100,000 and you find a home that needs work, selling for $80,000 are you willing to put $30,000 into it for repairs? What if the house is selling for $50,000 are you then willing to put $30,000 in repairs? Do you have $30,000 available for the needed repairs? 

Who is going to do the needed repairs? Do you have a list of reputable vendors that will do the work quickly and inexpensively? Do you have friends or family in various businesses that would be willing to help you on a weekend? These are still resources. Even your own experience in doing other house flips in the area can be considered a resource.

What about your own abilities? Sometimes there are investors that move into an ugly house, and fix it up, sell it and start all over again. Many of the basic upgrades and repairs that do not need a licensed professional can be done by the homeowner if they have the ability to do these things. I have met many people that have an over inflated sense of their abilities (I am guilty of that myself from time to time) and this has cost them thousands of dollars. If you can take an unbiased evaluation of your abilities and apply it to what is needed for this property under consideration you may be able to bring the amount needed for repair down to a level more in liine with your available resources.

That goes into the next item on the list: "Time" 
Personally, I always seem to have more time than money or more money than time, but rarely both. 
While evaluating this property and your resources and your abilities, be sure that you have the time available to take on this new project. Even if you have reliable vendors doing the work instead of yourself, I have found that the best results are when I randomly drop in on the property while they are working and do a basic inspection of the quality. Even if they are known to perform high quality work, when they know that you will be checking, corners don't get cut as often.
If you are thinking about doing the work yourself, do you have the time needed? If not, you may have a house that is sitting for months on end, losing money instead of making money, simply because you over promised your time and attention to this project.

While most of this is unfortunately learned through trial and error and gained by experience, here's hoping that you will at least take a moment and learn from some of my more epic mistakes that always seemed to be when I bit off more than I could chew at the time.