All Forum Posts by: Benolyn Craig

If you do not think you will be able to move this property, then I would walk away. However, if it is a good deal then you should not have to worry about an investor picking up the property. The thing that would concern me the most is why you would not be able to pick up the property. I am very leery of wholesalers who are not able to purchase properties if they do not move.

Memphis, TN is a great cash flowing states. Most of the properties can be purchased, renovated, and refinanced for pennies on the dollar. The average income in the Memphis area is much lower than the national average and a majority of the city rents.

Have you considered wholesaling properties in your area? If you are not comfortable with putting a property under contract, you could help a wholesaler sale their properties. If you would like to help wholesale properties, PM me your information and I will be happy to help get you started.

By having ownership in a property management company, I know how important this service is to investors. Here are a few questions, I would make sure to ask potential property management companies:

1. What is the tenant placement fee
2. What is your maintenance fee?
3. What is the monthly management fee?
4. When do you get paid?
5. Do you mark up the cost of the maintenance bills to the investors?
6. Am I provided a copy of the invoices you receive on my properties for maintenance?
7. Have them provide you a copy of their property management agreement and lease.
8. What is their eviction policy? Some PM companies charge the investor additional fees for their time in the eviction.
9. Find out about their property management software.
10. Do they use a collection agency to help the investor collect any judgments or rents?

Your property management company should provide you a service that will help you maximize your real estate investment. In my opinion, a good property management company will be able to tell you at any point in time what is going on with your property.

Also, I would try to find a property management company where the owners own their own investment properties. I believe by them owning their own investment properties, helps them relate to investors during the bad months of investments. If they tell you there are not bad months in investing, make sure to run.

I use www.phone.com and have been very happy wtih their services.

First, I would recommend you talking this over with your CPA. It seems odd to pay yourself the full amount of rent, when you will be taxed on this money. I would make sure to ask about the tax consequences for moving into a rental proeprty verus renting another place for 6 - 12 months.

Welcome to Bigger Pockets!

In mylease, I have them write down eveyone who will be living at the property even if they are not signing the lease. This has given me other sources to track down past due money.

I have been in property management for 3 years and own 10 investment properties and I find home warranties to be a waste of money. In my experience, the home warranty companies normally do not repair the problem and the repair person they send out is always up selling a service for their company. This leaves an unhappy tenants and an investor still paying out of pocket to repair the problem. Not to mention, you end up wasting the fee for the home warranty and the charge for the repair person to come out and not repair the problem.

Instead of the home warranty, I would suggest build a list of vendors that will give you a reasonable price. You can check with your local REIA group for vendors or make a post on bigger pockets for vendors in your area.

Contracts are extremely important when it comes to contractors. In my contracts I have the following main points:
• Scope of the work to be done
• Agreed upon price and draw schedule
• Timeline
• Clean up after yourself clause
• Not responsible for subs
• Insurance

I believe the scope of the work, price, and timeline are the most important to getting the job done. If you do not have anything in writing, it seems that a contractor will forget the first three items quickly and your will be over budget and will not be meeting your deadline. One way I make sure my deadlines get met is by applying a 10% penalty for not finishing the project on time. The contractor will have to deduct a 10% per day until the job is complete. The only time, I have not had my project completed on time is when I did not have this penalty in my contract. However, the scope of work , price, and timeline may change during a project but always have a change work order request to stay on track.

You must state to clean up after yourself because contractors seem to drop caulk, paint, and other materials all over the place. Not to mention, they will leave their cigarette butts, lunch, drinks thrown through out a house. The trick to making the accountable for their mess is to have in the clause they will not be paid until the cleanup crew if finished. If the cleanup crew has to spend extra time scrubbing the paint off the floor, you have stated in the contract that the contractor will be deducted this charge from their final payment.

To help keep from a sub contractor putting a mechanics lean on a property; you must state you are not responsible for the subs or payment to the subs. I have seen in experience a contractor run out of money and then the subs are filing mechanics lean on property. Also, you will want to state that you are not liable for anyone getting hurt at your property. However, you will have to check in your state to see what insurance is required.

Just remember no job is too small for a contract and to get the job finished timely and on budget you must have a contract.