All Forum Posts by: Andrew Weiner

I think that you should be focused less on market and more on identification of the best possible deal and where you feel most comfortable. Although it is a tough time to travel I think that physically visiting each market would make sense to get a better feel and allow you to meet some local resources. I have friends that have made big money and lost big money in what the forums consider to be the best markets. The most important thing to do is make sure to buy at the right price and maintain sufficient reserves to do preventative maintenance. If you are financing the deal then a few extra dollars might still look good on a COC basis but you have to make sure that you aren't putting your exit and liquidity at risk by overpaying in the market. I wish you the best of luck on the search and whatever market you end up in make sure that you have an experienced local working with you before you buy.

Do you intend to use a property manager?  It could be worthwhile to possibly engage the current manager in which case they have a strong incentive to give you the deposits and prorated rent.  You might be able to get a month to month agreement with them and then after you have the rent and deposits you’ll have the freedom to quickly change managers if they don’t work out.  If you don’t want to use them then you are completely entitled to request those funds. As for deposits I would ask a local landlord/tenant lawyer that question, I’ve never had it come up from a tax sale where there was someone around to get the deposit from.  If you don’t have one I can recommend a few.

I would not get involved in or worry too much about what happened with rents owed and who has them from prior to you getting title.  The management company should have those funds in a trust account and maybe you can give them the benefit of the doubt they may hold them for a period and then send the money to unclaimed funds.

Hi Neil,

Just a few thoughts on your post.  You don't need a separate account for income and expenses (if that was the question, I wasn't 100% clear).  You can also open a business credit card with a personal guarantee,  that's a great way to separate business expenses and personal expenses.  Many of the cards also allow free additional users so you can have a different card for each property to allow for even easier tracking.  For the other expenses that you deduct, like internet or home office I would talk to your CPA about that, the rules and individual circumstances vary so much that I think its hard to give general advice on a forum.

When you make the change you should also be sure to notify your property insurance company and update the names on your utility bills.

All the advertised rates that you see are for owner occupied and ideal circumstances (credit, condition, value, etc.). Those rates also do not include closing costs which are several thousand dollars minimum. Right now what I have heard from lenders is that they are being very conservative on rental properties (75% LTV) and a higher than normal spread on the rates (used to be 1% extra if it was a rental). Unless its a high value property it most likely won't pay (or pay much) to refinance. If you are pulling money out at the same time then that is a completely different story.

I don't see why your partners can't use at least their first names with no last name or represent themselves as employees or representatives of the management company with no connection to "ownership".  It has been said in a few different ways but I always represent myself as being part of the management company and leave the "owners" as anonymous people that the tenants cannot contact.  From a totally personal standpoint I would never allow someone to use my name for ANYTHING.  I think that in your situation the ramifications are probably minimal (I am not an attorney and that is simply a lay mans feeling).  However its a slippery slope and when your in business you need to close as many liabilities as possible even if you chances of having an issue are remote, you really just need to draw the line in the sand and always fight to reduce personal and professional exposure.  

If the property is owned by an LLC (in Cleveland) then you put the LLC name on the 3 day notice and the management company along with an attorney representing the owner appear in court, still no "owner" name on anything.

You also might want to look at Kamm's Corner.  There are small B class pockets all over the city.  If you are local I suggest that you drive around and actually get out of the car and walk around.  In many cases by walking a block and general neighborhood I can get a good feel for the area.  Also check rental comps, those are an indicator (please note that I said just an indicator) of what kind of neighborhood you are in.  Ultimately you do need some local expertise as block by block there can be big swings.  

@Zachariah Hays Did you have any rehab to do on your current duplex? BRRRR can be really great but your not going to get favorable terms from a hard money lender, especially if you don't have a proven track record, one of the first questions they will ask is how many flips you have completed.

There are so many risks when you start on a rehab project and the costs can easily exceed initial expectations, in general to pull off a 100% cash out BRRRR you have to do some significant work which can mean significant overages. I like the idea mentioned above for you to move into a unit and rehab that unit, swap units, and then rehab the other. It's also an opportunity for you to build a base of subs and vendors and get some experience in estimating costs on a project. If you are able to manage the project well it might be a good intermediate step towards a BRRRR that will help you mitigate risk and properly plan for the next one.

Hi @Anthony Hooker,

What are you investment goals?  East Cleveland is a very high crime/low income area.  You can get section 8 tenants there but some property managers won't manage in East Cleveland, it will reduce the number of companies that are available for you to do business with.  Properties look great on paper in East Cleveland but when you get down to it the operational expenses end up being much higher and the deals don't always have that super high return that you were hoping for.  I would suggest looking at some other more stable areas like Euclid, South Euclid, Garfield Heights, or Old Brooklyn if you are a long term investor.  

@Patrick Ruff There are properties out there, with the foreclosures and evictions tied up in limbo there is definitely inventory that is sitting off market waiting.  There are opportunities out there right now but they are harder to find.  Once Cuyahoga County restarts the foreclosure auctions there should be increased inventory.