All Forum Posts by: Andrew Michael

One of my properties is about 45 mins from where I live. So while I am the "landlord" I have a local team (plumbers, handymen, electrician, etc) that take care of any issues that come up.  This allows me to stay in control of the money (rent) while saving on the property management fee's.  When it does come time to place tenants, I put out several adds during the week and then schedule an open house where I set appointments every half hour with people who replied to the add.  By setting appointments and sending confirmation text messages, emails, and calls I increased the number of property visits significantly.  

@Malik Awan I am also in the Gaithersburg area.  How/ what are you doing to find deals in our area?  Dont give up on our local market as I have found some pretty good ones from SilverSpring all the way out to Hagerstown.  

In terms of what prop managers charge, I believe the going rate is 10% and one months rent for tenant placement.  

When I say "comps" I am referring to comparable properties to the one you want to purchase in order to arrive at a logical market price.  Comps are def something your agent can help you with but you will want to compare things like, sq footage, number of bedrooms, number of bathrooms, etc.  So without knowing your particular property or any of the local comps, its hard to answer your question as it relates to cash flow.

To figure out your cash flow, you need to find out what you can rent each side for and then work backwards.  First figure out potential rent.  Ask the current landlord what he rents each unit for, search Craigslist, and even try https://www.rentometer.com to get an idea of the going rates.  From there figure out your monthly expenses and subtract that from your rent sum.  This will give you a rough idea of your cash flow.  For a more in depth analysis I would highly recommend using the calculators and deal evaluation tools BP has. They will get you started in the right direction.  

@Tim Puffer Yes 8% each separately.    

@David Richter Thanks for the info.  I know marketing takes money but I am hesitant on pulling the trigger with bandit signs since I do not have confirmation of their success rate in my area.  I am doing surprisingly well with Driving for Dollars and door hangers.  I suppose if those strategies work signs would reach all the more people.  I will think about this.  Thanks!

@Joseph Jar You said:

"I would like to get it for 130000, but need to at least to get it for 140000 in order for it to make any sense."

I was referring to the numbers/ analysis you used to arrive at those price points.  Basically break down your evaluation use that to negotiate and justify your offer.  In addition, I would use comps also like the other posters suggested.  

As for "I assume I would just give them a general run down through my agent."  I am not 100% sure what this means.  If your agent is investor friendly and understands exactly what your goals are then I suppose you could.  If it were me I would do as much prep work as I could and gather all information to the best of my ability and THEN use my agents expertise to move forward.  At the end of the day, you will own this property so you need to make sure the numbers work for you.  

Hope this helps

Try to find out if they have had any previous offers and for how much.  Once armed with this information you can get a better idea of what to offer.  Regardless, I wouldn't worry about insulting them, be respectful and professional but this is business.  They know the game and I am sure expect to go through rounds of negotiating.  Present your numbers to them and tell them why you think 130k is a fair price.  The very worst that can happen is they say no and walk away.  

@Tim Puffer As it stands now setting aside 8% for Maintenance, Cap Ex, Vacancy, its a little under $500 a month for both doors. That being said that number comes down if you factor in Management (which I am doing myself). I am planning to never pay my self and will reinvest all cash back into future acquisitions so thats my strategy/ preference. Lastly my insurance is pretty high and I am going to do a better job at shopping around and getting that rate lowered. That will make a big difference. So worst case scenario my ROI is 15%.

@David Richter Do you mind me asking from whom you order your signs?  Most of the sites I have looked at/ created a design are running me about $2.00-$2.15 (order of 200) per sign before shipping.  What is your approx cost per sign?  How many are you ordering at a time?  

Thanks

@Tim Puffer Yes I did, I met her at a local REI Club and she was also recommended by a fellow BP member as well. She has years of experience so I felt that helped minimize my risk.

@Patrick Bishop  Thanks!