All Forum Posts by: William Bannister

1st I want to thank Mike M for posting the numbers for all those metro areas its interesting to see what others are charging nationwide.
I generally pay between 9 and 10% and let them keep half the 1st months rent after they have paid rent for 90 days. Its extra motivation for them to do a good job screening. This 10% I am paying in southern Indiana Ohio river valley area. so many aspects to management as to what your people do. i had a a guy manage my stuff while i was outta town 2 years on other projects and came back to a mess. A few of my properties in sad shape full of deferred maintenance and several poor choices made selecting tenants. I was fed up with paying 35 and hour for sub par construction work during turn overs after I had fired the 1st manager. I let one unit stay empty rather then pay 35 and hour to turn it over. Once I rolled in town I rolled up my sleeves and found a good carpenter at 12 an hour to work part time. The problems come when your outta town and all of a sudden you have to fire someone or say no I am not paying $500 to install a sink when you know darn well a good maintenance guy can do it at 12 per hour and have it done in 4 hours. this is the challenges I have had, they never happen when your there lol. As soon as you go to Florida and try to rehab a house you just bought thats when the stuff hits the fan in Indiana on your apts.
Now I have gotten smart I have 3 sets of keys for apts and I leave a set with a friend and he can deliver the set to a new manager on 1 phone call. When I leave town I have at least 2 good carpenters on call so if one drops the ball they are fired. I hate to be draconian but customers demand service so I dont have a choice. If you pay these managers 10% I would say to make sure you regularly inspect as I have been shocked how little they do to try to get 10% if your not on top of them. Over time its been easier for me to use an employee then have companies and I am probably sticking to that formula. I have wanted to ask other investors if anyone has ever found any good carpenters using angies list? I have had conversation with other landlords about craigslist and we used to say rent a drunk but I suspect Im being politically incorrect here. My average manager on smaller apt buildings under 4units lasts about 3 years. On our large project we are lucky she has been with us 11 years!

Welcome Ryan, A bright future you have! I couldnt think of a better career field then accounting to be a part of, that helps you in the real estate investing world.

transfer of title doesnt mean that the property left the family it could mean many things divorce,death,transfer to partner also an investor just changing property out of one entity into another. It could also be a restructure of debt.
Many cities have web sites that they call assessor sites that show tax value and show history of sales. With this data its easy to combine that with what you learn web sites like trulia and realtor.c-m and loopnet, zillow ,homes.c-m ect to determine some sort of valuation.
I call it "swag" scientific wild a$$ guess. I got this from Ron Legrand about 10 years ago. Valuation in property can also be found in public records down town. The record of deeds,or assessor can also be a bank of resources. If you work in a specific city and see enough property pretty soon your an expert in certain areas on value. News papers used to have sales of properties printed in papers from time to time.
The process of finding value by finding nearest sales to property your interested in. Then you would try to use a comparable. For example compare a 3 bedroom to another 3 bedroom that sold recently as close as possible to your subject property.
Using the things appraisers use to come to value property. Things like cost approach for value ,income approach and sales approach is what most appraisers use to find value.
I dont pay too much attention to tax value since thats not always up to date. you want to be careful when using sites like zillow since they may or may not be up to date and dont take into account the current properties condition. You would be surprised what a homes that just got foreclosed on looks like compared to 3 months before when it was occupied. The value could dip 35% easily.
Hope this helps. The key to mastering value is seeing so many prices of properties both offered for sale and examples of sales that you become a master at it.
Be aware of such things that add value or subtract to include location, location location sqft,size of lot,garage,basement, # of bedrooms,age,age of construction,type of construction, vacancy and rent roll, expenses, taxes,ect.
Home A has 3 bedrooms might be worth 20k more then home B that has 2 bedroom even though they are right next to each other. hope this helps a little.

BTW I bought a home 2 months ago for 1220 bucks at county commissioners auction. Thats why we get educated so we can do the most with our money! The arv of this home that needs 10 or 11k in rehab is 80k.

btw to Andrew O-- Real Estate wont work for you! but dont be so quick to judge before he has even begun. I started with a credit card that had a 500 dollar limit and 900 bucks in borrowed money from a friend...At age 23 I bought a home for 27k and had to put 5% down and had to pay 9% interest was about a 261 a month pmt. It was a big 4 bedroom junker. I rented out 3 rooms and ran it like a boarding house while i was in college and got between 200 and 250 a room. I lived there free when I was in college. the 4th bedroom was a walk up attic that
I toke because it was a huge space. after a couple years of fix and repair I moved into other property I bought and 5 years after I bought it I sold it for 67k.
That was my first deal here I am 20 years later still living off my rents. I dont borrow money any more to buy property.. I can pay all cash at age 44. and I dont have a "TRADE" I have been called a jack of all trades but thats because 20+ years of investing has given me more experience in live then working a "TRADE". Andrew go get your trade then maybe you can come work on my properties as an employee and I will show you first hand it does work for those that work it!
Real Estate investors with just 16 to 20 apartments paid for will make at least what a middle level manager makes with an MBA. Imagine what I make owning a 74 unit free and clear + other property?

Education is the key before spending money. I would read some books by several authors Larry Loftis on tax deed and liens, He is an attorney and is very knowledgeable of extremely good deals for investors with under 50k to invest. john beck has a course on tax deed investing for 40 bucks that will teach you more if u really like that.
Next read Ron Legrands book on wholesaling and if you like him he has a great course on the matter that you can probably get for under 500 bucks. Next read a little bit about apt investing with Conti and Finkle which should be in your local library for free. Read Donald Trump art of the deal shows creative strategies that can be applied to low end deals just like he does to sky scrapers.
Maybe read a as many books on real estate investing in your local library for free. Then after you have done this go tackle your first deal.
I would set aside 2 or 3 months income for emergency fund and use what you have left over for your first deal.
I might be inclined to read up on property management and learn how to read a financial statement too.
Rich Dad Poor Dad is another book by Kiyosaki you might want to read.
Dont rush into any deal yet get the education in real estate 1st then strike. Move fast to educate yourself so you dont miss out on this bear market where prices are incredible.
Other authors on investing are Warren Buffett, or Think and grow rich by Napoleon Hill. J Paul Getty How to be rich. Once you plow through 20 or 30 books I would decide what your going to do as an inv estor. You can do what I do be a landlord and buy apartments. You can be a wholesaler or flipper and just buy rehab and sell or just buy em and try to sell make a few bucks and not rehabs em.
there are so many ways to work this business. I have done all the above and own over 100 units and at 44 years old I am just getting started since I got a late start. I didnt finish college till I was 23 and I was in the Army too so I wasnt really seriously going till age 24. I spent years part time in this business because I made so much money at it..I would just disappear and travel for 6 months. Then i decided around age 30 to begin building a net worth.
What ever you do decide to do education in this field like any field is the key even a college degree in property management or an mba in business could be helpful. you could get a job in a Reit managing apts for a few years then go off and start your empire with experience.
Or you can just start buying duplexes and homes and rehabbing and selling some and keeping some others for cash flow like I did, then eventually buy larger apt buildings.. 4 units 12 units then a 50 unit and then a 100 unit and ect.
I budget a couple hundred a year for educational material even at age 44. The internet has so much information though you can read though these stories and learn from others. I didnt have this powerful resource when I was 21years old.

These are the type of things that will wipe you out as a landlord accepting such costs without trying to do things as I call it in house.
Your balance sheet cannot handle such high costs on potentially easily solved problems as rats. People may be a bit freaked out by rats but its not a big deal. Having a manager or part time helper in this business is a good idea if you have things you dont like to do. this is part of building a team in real estate. Having your manager do more things makes your management costs go down.

Seal up your garage and dont let pets in and just get decon in the blocks for about 10 bucks wait one week then come with gloves and get rid of the carcasses. Decon also comes in pellets. I used this just last month and last summer on 2 duplexes that where situated near another property that had debris in yard that I am quite sure they came from. Spending even 450 is madness. If you dont have the stomach for it get a part time manager at 10 bucks and hour to so this stuff;) Imagine paying a manager 50 bucks for his labor at 12 an hour andf have the savings of $390 in pocket or 840 if you would have spent that. The poison is effective and isnt environmentally harmful.
Just clean up unused poison when your done using so the neighbor cat doesnt wander over and eat it after.

Il never quit! I am addicted to investing. If I live that long I will be doing deals beyond 70's if I have the health.
When your nitch becomes entertaining it is hard to walk away from. My challenge is staying balanced in life and doing things besides real estate. I have had to limit myself to 9 hour days 6 days a week to stop from being un balanced. I try to take long breaks during holidays too like 2 weeks to enjoy life with family. Doing that 3 times a year lets me reconnect with things that matter the most people!
This business has made it possible for me to take off years during my career, coast and take time off to jet ski and fish and travel and go boating as well as snowmobiling and motorcycling as well and play with hot rods and just have time to really do things at home. I could not have gone to the places I have traveled to without this business. Most careers dont allow enough time off or enough money to live life! If I had not picked real estate to do for a living when I was 22 years old I would probably have become a history teacher.

In eviction court your most important papers in most states are as follows your 3 or 5 day pay or vacate form or what ever they call it in your state. That should be mailed return receipt so you have proof it made it there. "Certified mail" I use the post office costs about 5 bucks and they give u a tracking number. That document has the amount they owe including potential damages as well and it has there address and names and proper dates included. This is your proof of service. Many states do it different...3 day 5 day 14 day so make sure you follow your rules.
Next I would have a condition report which is a form they sign based on condition of my apts. Mine is about 3 or 4 pages depending on it its a house or apt. They show every room and its current condition. I take pics of them too and have them on file on my pc or back up hard drive.
Having a condition report is more for your post eviction damages so you have proof of the damage that it was not existent before tenant moved in. I take before and after pics. I have receipts and ect too..
There are a lot of reasons you can legally evict tenants term of lease is up is an easy one. Last document to have with you in court is your lease since it will have dates.
There have been a few tenants I wanted to follow to the ends of the earth to get my money but generally after I get my judgement and apt back its the end for me and I move on. I had one guy I had a 5k judgement on and had it sit in my filing cabinet for 5 years. Then one day out of the blue I saw him driving some really nice Jeep Cherokee and I was pissed thinking how could he borrow money when I had a judgement on his credit. So I waited for him to leave the Walmart and followed him home staying behind him at least a half block he never noticed. I found his address then I went online with his information pulled his info off his new address found out his employer and garnished his wages for 3300 dollars until he quit the job. My opinion is judgments are like toilet paper but they do 2 things stop people from borrowing money from a conventional source at a low interest rate. The 2nd thing they do is allow you to pay for court costs since the collections on these judgments are usually enough to cover that. I never get more then 10% to 20% back off of judgments. Some states a judgement is good for 20 years.