All Forum Posts by: Andrew Weiner

Hi @Drew Hoffos, I have done both apartments and non commercial properties, they are just different flavors of the real estate game.  I was told very early on in my RE career that there are over 100 ways to make money in RE, you just have to find your one or two and run with those. 

I normally would agree with the @Brian Garlington that financing properties to get the most bang for your buck is the way to go but in your situation you have a bit of flexibility since you aren't in a rush.  Even with conventional cash out refi's you only have to wait 6 months to do the refi.  With your time line and wanting to get a bit of experience you'll know by the 6 month mark if you want to refi and lock up the property financing long term or if you want to sell and get out.  Also its much easier to get an offer accepted right now if you are a cash buyer.

One other thought as a new investor is that in many cases it takes a bit of time to normalize a property.  You may walk into a new property with existing tenants that have deferred maintenance issues that will take a few months to work through.  These cost money but with a good manager you will work through them and have a solid cash producing asset. 

Going forward I would require proof of insurance before you give them keys.  Its really inexpensive and only take a few minutes.  They can jump on lemonade from their phone and have a renters policy in a few minutes. 

For your current situation, how well qualified is the tenant?  If its a higher rent unit with a higher credit score tenant you can not accept their next rent check until they give you proof of insurance, someone with a 700+ credit score will get it done when they see a 3 day.  I would send them a letter explaining the process that if by this date and then we won't accept rent, and then by this date you will receive a 3 day and we will proceed to eviction for lease term violation.

You do have to figure out what your liability is from an insurance standpoint and whether this is really worth it.  Obviously its preferable if they have insurance but what will the eviction cost you when your home owners policy will probably cover the same loses, just on your dime and insurance record.

Is the property in Cleveland proper or in a suburb?  Is this a single family or multi family?   Is your renter section 8 or another subsidized voucher? Does your lease have any provisions about excessive water usage or leak reporting requirements?  

As others have said, if you can add an addendum to the lease at your next renewal that adds at least part of the water and sewer bill to the tenant then they are much more apt to report leaks. 
I have been successful in lowering utility builds with some capital upgrades and billing back tenants.  

There are attorneys in the city that specialize in these cases.  Depending on how much money you are looking at in taxes you might want to engage one of them, they get paid as a percentage of what they save you.  Other than that I don't think that you have such a strong leg to stand on when you have a recent purchase, you could argue that the increased taxes actually lower the value of the property.  

 Add another vote for Cleveland.  I like a quite life and the suburbs are very nice for that, we have great parks and outdoor areas.  There is still a nice center section of downtown Cleveland with higher end restaurants and bars (not my scene but I appreciate that its available).  Also the airport here is big enough to get you pretty much anywhere in the world with one connection but its small enough that you don't have to worry about out of control security lines or massive traffic.  

POS is very hit or miss, I think the Willowick might also have a "dye test".  It just something to factor into the negotiation.  As far as renters go this is a strong area, the section 8 organization that covers the area is a bit difficult to deal with so you might need to factor longer vacancies if you are thinking about renting to section 8.  Once city over is Euclid that is also a good option.  Let me know if you want to discuss the Lake County market any more. 

The only good way to bring value in your position is to WORK LIKE CRAZY!  If you have the drive then go out and network your way into a relationship with an active broker/investor and get the paperwork and process laid out to complete a whole sale deal.  Then hit the phones and pound the streets!  You might need to knock on 1000 doors to get one wholesale deal done but its a great way to meet people and build your skills/industry knowledge.  I have an intern in my office that is doing this right now and he has spent a lot of time on deals that never went anywhere but he has learned a ton along the road.  Now when he talks to experienced investors and owners he sounds like he knows what he is talking about.  He will close a wholesale deal soon and I think that it will snowball into a great RE career. 

A second idea if you are in college is to work for one of the local property management companies that do college rentals.  A few of my class mates at Ohio State started as leasing agents in undergrad and then became managers for the company after they graduated, eventually the owner walked them through buying their own properties.  Just make sure its a locally owned and managed company so that you have the opportunity to connect directly with the owner.

I hope you are able to make something happen, please keep the BP community updated on your success.  

I have done extensive research of different PM software providers.  I used Yardi Voyager for Multifamily and I currently use Appfolio for managing 1-4 unit houses.  I think that Appfolio does a very good job for houses but the monthly minimum makes it a bit too expensive unless you have more than ~15 units (I think its $100/month minimum).  I would outline what your needs are, what reports you like to look at, what functions are important to you and rate each of the providers you find in those categories.  One thing to note about Appfolio and some of the others is that it only manages properties finances, it cannot manage your management company's books.  For an individual who is managing their own properties that might not be an issue but it does mean that if you need to keep books for your management company then you need another book keeping software like quick books for that.  

I am partial to turn key in the Midwest. I have have been able to help investors from California get deals done and manage them for a solid and fairly consistent return. I agree with those who caution the BRRRR for a beginner, especially out of town. If it sounds too good to be true, then its probably too good to be true. If you are part time in RE then start slow, limit down side risk, build some equity and experience. Your going to feel sick to your stomach the first time that you have a $500 furnace repair backed up to a $500 refrigerator replacement and you wipe out a few months of cash flow, but that's normal and its part of being in RE. A few years later you realize that you've paid down the mortgage and have more equity, you've raised rents, and maybe the house has appreciated a bit and you'll feel like a million bucks. My general advice is to build wealth over time, in real estate it can take years to make money.

I think that Cross County Mortgage (based in Cleveland) can.  I spoke to them and ended up not doing the deal for other reasons but they had a pretty comprehensive offering of mortgages.  I have a few others that I know do Ohio but I'm not sure if they do other states.