All Forum Posts by: Bill B.

I think once you see a few bills for each kind of utility and divide by the number of people you’ll get a good grip on it. You could ask a couple building owners, especially sellers. I don’t know if the utility companies would be willing/able to provide any guidelines but they might. The trick of course would be to try to convert as many utilities as possible to tenant paid as they will go down if the tenant is paying for them, that I guarantee. 

@Brady Miller

Hey Brady, I have final say on all my tenants it’s my place. They have minimum standards before they even contact me and then say here’s their credit score, income, employment and rental history, yes or no?

Any repair over $250 I get a description of the problem, even photos, a quote from their preferred vendor, and the option to have someone else I choose to give a quote or do the work. Of course their vendors know that and I do get an “abundance” of $190-$240 repairs, but I could lower it to $200 if I felt I was getting hosed. With the cost of labor I’ve told them ‘no repairs on appliance over 5 years old or not stainless steel”. I’d rather just replace/update the appliances and therefor the entire property. 

You should enjoy working with the PM, your supposed to be partners. 

Before you buy in Vegas compare it to your alternatives. I think you’ll find...

Las Vegas has very low property taxes

Relatively cheap properties prices are still below 2006 prices

A much newer average age property 20 yers is old 40 years old is ancient

Low maintenance landscaping, no mowing or major trees

Almost zero weather related problems, floods, tornadoes, snowstorms

Low maintenance stucco siding, very low maintenance tile roofs, concrete driveways instead of asphalt

No state income tax

Fastest appreciating property and highest rent increases and population growth in the US last year

Stable/increasing property values, housing values in Las Vegas have only fallen over 4% once in it’s history.

It’s pretty much the best/only choice for California investors that want to go out of state but in driving/very short flight distance. 

Retirees are moving southwest and south east. It’s Florida, AZ and Vegas. 

Anyway, I think many people ignore weather, housing exteriors and housing age when comparing markets. 

It’s probably much less ideal for anyone that lives east of the Mississippi without a good team. Good luck no matter where you choose. 

Tenants that pay late but pay consistently even with late fees. Followed up by real estate is a really slow business. There’s almost nothing to do in buy and hold. screen right and you should be golden. 20 years with 13 properties with zero evictions, 1 lease broken, zero disaster zones at move out. I think higher rents and houses versus apartments tend to eliminate some of the disasters you see in posts above that might be more common in cheaper areas or apartments? Or it’s just better screening. 

@Brandon Arnett

What’s in “costs” in your paper spreadsheet? 

Vacancy, management, repairs, advertising, maintenance, utilities while vacant, property tax and insurance and their yearly increases, is there an Hoa? Make sure the rent is realistic. If those costs are all accounted for it looks decent. Though I thought you said you weren’t going to count on appreciation and yet almost all your profit comes from appreciation. 

Definitely the right price range I think, $250k give or take $30k puts you in the fast selling range. 

@Brandon Arnett

No, I'm sorry. What i meant is a property can be "making money" with a negative cash flow.

I bought a lakefront home a few years ago in MN I plan to retire to in the semi-near future. So I went with a 15 year loan. The rental income is $2700/mo. $32,400/year. But the payments are $3,126/mo or $37,512/year. So the cash flow is NEGATIVE $426/mo or $5,112/year. But the income $32,400 minus the expenses including $11,000 in interest and $5,000 in HOA fees, $6,000 in taxes and $400 in insurance means it produces almost exactly $10,000/year in income.

So negative $426/mo cash flow can still equal $833/mo in income. Sure its gone up $150k in 3 years as we'll but pretend it didn't. I wanted it paid off. Change the 15 year loan to 30 years and the payment drops $900/mo and now its cash flowing positive $475 but the extra interest expense would be insane, an extra $125k. 

Plus, the interest is deductible now while its a rental. I don't itemize the personal part of my taxes under the new $24k married exemptions. So the mortgage interest is non-deductible once I move in, so instead ill only pay interest on it while it's a rental.

Too many people on BP count the entire mortgage payment as an expense when in fact there's probably more "profit" hidden inside the mortgage payment than there is cash flow profit they're worried about.

@Brandon Arnett

Hey Brandon. If you want to get together sometime I’ll show you a spreadsheet with my properties at my purchase price and current values and you can do the math yourself. Don’t forget, the cashflow isn’t your only profit, the principle payment gets added on. I don’t think people who need to count on a positive $100 or $200 cashflow should invest in real estate. IMHO, most people who invest in real estate won’t ahve their life changed by a $200 positive cash flow or if it was negative $200. The positive sounds better but you’re going to replace water heaters, especially in Vegas every 6-10 years, appliances, ac units, etc...

LMK if/when you have some time and I’ll share history as well as current info. 

We have them convert utilities to their name before we give them keys. All they need is a signed lease. 

Ps. Call the utilities and some will have a “landlord policy” where it automatically goes back in to your name when they move out and cancel. Otherwise you have to do that manually each time. 

New small mfh is not common in Vegas. I would either try to house hack with roommates inside your sfh or take the plunge and try a fourplex. There’s a decent gated fourplex community at Maryland and hacienda (south east/central by bulb) and a few more in spring valley (southwest)  

I love to tak real estate if you want to get together sometime I can show you what/where I invested (all sfh or bounce ideas about other areas.)

I BELIEVE they want you to have a couple years of landlordign experience before they count 75% or projected rent no questions asked. It can’t be uncommon as I acquired 10 mortgages with a monthly nut of a little over $13k while unemployed/retired and only having my wife’s nursing income. if you don’t count rental income my debt to income ratio is waaaay over 100% maybe 150%.