All Forum Posts by: Will Barnard

Having "name and/or assigns" is sufficient enough, but it never huts to add a statement in special provisions stating that buyer has the right to assign the contract so that it is spelled out to the buyer. In most states, all contracts are assignable unless noted otherwise.

Good point Jon. That would be a third option. This is why communities such as BP are so beneficial. An option I left out was added by someone else "in the know" :superman:

Thank you Randy. That sounds like good advice.
For those you are not familiar with SERIES LLCS, they are not available in all 50 states (yet), but as they become more popular, I believe they will be. They are a great form of asset protection/liability protection and allow the user to reduce/minimize entity formation costs. Contact a CPA for info on how they work and in which states they are available.

Josh Wrote:

That has been my point all along. In fact, it is my only point. The rest of the entire discussion is in defense of MikeOh's attacks, regardless of his denial of them. In addition, if you do follow the rule, you may not be sure you are looking at a good deal. Case in point, the investor in FL with the high taxes and insurance said they needed a 70% rule. That has been my point. Other areas may only have a 40% OE, or a 35% OE, or a 60% OE, etc. etc. As you said Josh, there is no "one way to invest and no one rule to follow."

JOn, I agree with most of your post as well as there are many factors which can reduce or increase, for that matter, rental property expense ratios. If you own 5 doors or 100 doors, it all depends on how you operate your busienss and where you are investing. End of story!

MikeOh Wrote:

Nationwide,

I have not insulted or badgered you. You have repeatedly posted inaccurate information and I have corrected it. In the rental property business or any other business - THE FACTS DO MATTER! It would be absolutely immoral on my part to allow inaccurate information to stand without being challenged.

Again, you deny the insults and attacks on my knowledge and business. Deny all you want, your posts show the truth in your choice of words as well as your tone. Many others have noticed as well and I continue to receive PM messages stating the same thing about you.
I have not posted any inaccurate information. You have a persoanl opinion and experience about a 50% rule you made up and I do not agree with it. You do not agree that other landlords can operate in a differnt manner and have lower OE results. That is your opinion, it is not FACT. The only immoral thing that has consistantly occured is your obsurd accusations and assumptions.

You need to re-read the thread as I explained as plin as day, why there is not national data on residential property operating expenses nor is there a national average. Even if there was, a National average does little good to an individual investor.

Josh and Jon, I agree 100% that there is 0% chance of MikeOh coming to any agreement here. He is hell bent on his opinion which is his right, but I can not see why anyone needs to use his 50% rule or any other rule in order to be successful. This will be my last post in any response to Mike or any of his attacks or whatever he wants to call them. I will however, continue to give my knowledge and experience to anyone who wishes to have it.

Best of luck to everyone in all endevours.

You owner finance for 500K and now it's time to refi, your property is now worth 400K. Your stuck, your property is worth less than what you paid, would the bank still refi your property? You still owe 450K to the seller.

What happens now when your LTV is not low enough to refi?

If you owe more than the property is worth, you can not refi. You are stuck with the property until you receive appreciation or let it go to foreclosure.

As far as your 50% rule goes, there is no right and wrong. I am not wrong in my posts or in the way I operate my business. You can continue to be narrow minded and see only what you want to see, or you can open your eyes to alternatives and other people's results. As far as the data you mention above, those figures are for commercial properties of apartment buildings (multifamily commercial) not residential. You clearly are wrong again and continue to confuse commercial with residential. In many cases, commercail apartment buildings have owner paid utilities, business taxes, greater tenant turn-over ratios, etc, etc, etc. Comparing those types of properties with residential is comparing apples to oranges.
Get off your high horse Mike. I grow tired of your insults and your constant badgering! I do not prey on newbies as you attempt to portray. On the contrary, I hold there hand during the entire time they own the property purchased from me. Tell me one other person or company that is willing to do that!!!
Quite the contrary, it shows a complete and fundamental understanding of the business. So sorry I said 45 dyas rather than 35 days. I certainly hope the 10 day exageration did not look bad upon YOUR business.
Give me a break. You want to argue over 10 days?! Either way, my point was that you have a much higher vacancy and eviction rate than I or any of my investors have every experienced - PERIOD.

MikeOh Wrote:

azlandlord wrote:

You really have a way with people don't you?

I am actually glad you asked because sounds like you could really use something new if what I have read is all true. Dealing with that kind of tenant day in and day out wears on you. Obviously gives you a bad attitude too.

Good luck getting anywhere with him. I agree that dealing with that type of business would eventually wear down on anyone. Mike refuses to have an open mind on others opinions or personal experiences and will continue to preach his 50% rule as the only way to do things in all investements. Continuing this conversation with him will only waste more of our time. It appears our efforts our futile and the only reason Mike would want to hear your strategy is so he can pick holes in it for you.
Good luck!

Please show us the data to these findings! You make outrageous claims and yet can not validate them with any evidence other than your own personal experiences.
Clearly you have no understanding of my operating expenses or anyone else's. My duplex listing shows the expenses I know an investor will have. There may be other expenses not listed and it is up to the individual investor to identify them. Please show me any residential re investment listing that shows evry single expense you experience and claim everyone else has. Let's see it!
RIDICULOUS! It does not matter to me how my business "appears" to you, however, it is obvious you have no idea of what my business is. My new construction units offer cash flow regardless of what you claim, and they have middle income tenants in areas where we WILL receive appreciation over time, unlike the depreciating values in OH. I have done my due diligence in your area and it has proven to have very poor demographics. While you claim to have 40% equity at purchase, which is a myth at best, you are holding properties that are decreasing in value, not increasing. You specualte that your $100 per door cash flow will always be there. What if you need to drop the rents $50 per door to get tenants. See ya later to half of your cash flow. How about the possibilities of you having a flood wipe out your investement: while you wait for the insurance company to pay out, you will have vacancies (100%) and holding costs for a long time. If you hold properties for long enough, certainly this can happen and thus, by YOUR methods, you need to figure that into your calculations.

Mike fails to understand that a large majority of mebers here are not full time investors requiring cash flow in order to put a roof over their heads. The creator of the site, Josh, has said he is not a full time investor, infact has said he considers himself a newbie. James C., a large contributor to this site is not a full time landlord, Wheatie has stated he only owns one SFR and he is a top contributor and moderator. He has also stated that he uses a 40% rule in his evaluations and I do not hear Mike jumping down his throat and claiming that Jon is ridiculous and pretending 10% of expenses do not exist. The reality is "in the real world" that there is no national OE average and evry investor should consider the investment on it's own data, and not any rule of thumb or averages. Averages mean nothing. Media quote: On a national average, real estate is down over the last 12 months by 11.3%. This means nothing as it pertains to each individaul investor investing in one particluar neighborhood.

My advise to Mike is to eliminate the narrow minded thinking and stop making outrageous claims that 50% is the national average on OE. The only disservice to the newbies is Mike forcing them to believe that if they do not use a 50% rule, they will fail, no matter what the business model and no matter where the investment is located. That is just RIDICULOUS!

Originally posted by "RAMSFO":

Forgot to mention this... Rental expense average every month for the properties they own in City "XYZ".
Ram

Unfortunately, getting operating expenses averages across the country does the individual investor little or no good. The only measurment needed is on the indiviual unit in that individual town for that individual investor. Of course, if we could compile data for each city and have city averages, that may be of some assistance, but the investor would still need to plug in their own numbers of the performance.

Ridiculous! You clearly do not understand my operating expenses. I do not rent to crack heads, low lifes, and other scum types. I have never had tenant damage in excess of the deposit, and I have had only one eviction (an inherited tenant in a low income area, which by the way, I will never buy in again), and my vacancy factor has been less than 3%. My rental income per door is a minimum of $800 and the surity deposits are always higher. Yours are $400-$500 or so, so you have much lower security deposits. My tenants are family oriented people, with middle incomes, who take pride in where they live. They have NEVER vandalised my units. A large majority of my units are new and do not have big ticket item expenses. My exit strategy gets me out of the unit before these large expenses(new roof, new ac, etc) occur. Besides, for the last time, those are capital expenses not operating expenses.

I do not pretend that expenses do not or will not exist. I prevent them from taking effect in my business. You may argue all you want on what I do and do not have for OE, but you will be wasting all of our time as you can only assume and have your opinions.

You insist on posting my duplex unit numbers so you may critique them. The numbers posted are of the expenses I know 100% for sure that exist. I can not or will not assume that every investor will have a certain vacancy factor, ore if they will have an entity expense, or if they will have any other expenses. It will be up to each individual investor to take the cash flow show, add in any other expenses they know they will have, and reduce the listed cash flow accordingly. That is what everone in the "real world" does. I do not expect them to use your 50% rule. If they choose to, that is fine for them, that does not mean that their expenses will hit that mark just because they were to use that rule or any other rule. That is why my point is to not use rules, but evealute each investment and crunch the numbers accordingly. Your rule can not possibly work on every re investement in the US or anywhere else.

Wow! I am away for a few days since my last post and come back to find three additional pages of responses. What a hot topic again. I am glad to see that there really are others on this forum who do not agree 100% with Mike's 50% rule he made up. I was beginning to think I was alone on that.

Here is MikeOh accusing someone else of not understanding something again. Typical form him. James is a business owner and has been for many years as he stated, and yet he does not understand OE? RIDICULOUS!
James, you make the 1% eviction rate per month seem low. That is 12% a year which is extremely high. With that said, having such a large rate of evictions will also incurr large vacancies. Mike uses a 10% vacancy factor and yet his eviction factor alone makes the vacancy at least 15% just on the evictions as it takes at least 45 days for him to evict someone. Add in the regular occuring vacancies he experiences and his vacancy factor is even higher. Mike will paint a pretty picture and deny these figures when it comes to his business, but his posts and the numbers speak for themselves.
Thank you Jason! Unfortunately, it must be to Mike.
Thank you James. This has been one of my main points on this topic the entire time. Mike can not point you to such statistics as they do not exist.
Here is a statement from him he repeatedly posts:

News flash Mike, you do not have personal knowledge of OE of hundreds of thousands of units acrosss the country and the results are not collected , printed, or published by any source whatsoever. Your comment stems from your OWN personal experience in YOUR business, not everyone's. Perhaps your local investor friends also experience the same results. Keep in mind that you invest in your local area and have no experience abroad. Attempting to pass off your own experience to the newbie and seasoned investors here on BP as "the rule" is not only RIDICULOUS, but obsurd.

Of all the investors who invest in residential RE across the country, none of them report their financials to anyone exept their own accountants and in their IRS tax filings. The IRS does not publish these results either as that info is privaleged and private info. So how can you claim that over the entire US, all the OE average 50%? To answer my own question, that figure you use stems from your own personal results and is your own opinion. Other investors will encounter lower expenses, others, higher, and others will hit your 50% mark. End of story.