All Forum Posts by: Jason Miller

@Account Closed  Thanks for starting this topic and the many contributors.   Sean, do you feel all apartments follow the same trends for a market or can it be broken down further?  5-20 Unit 20-100, unit and 100+??

Since its a kitchen, I recommend getting it done now, but evaluate the benefit first.  Is that $5000 new kitchen going to increase your rent to cover the cost, or at the very least minimize your turnover time?  That will tell you if its time to do the work.  In the mean time I recommend a long term maintenance plan to help budget for future renovations, upgrades and replacement.

I agree with Tyson.  The late fee is minor, how they go about collecting the late fee is important.  Also how often are your properties late, are notices timely and consistent, is eviction started right away etc etc. 

Be sure to keep a ledger of any pros and cons with this PM as they come up.  As it has been said on here, hire slowly and fire quickly.

Also, I recommend having a lawyer or contract savvy person review your PM contracts (any contract) including this one.  Make sure there is no other "gotchas".  Yes it may cost you $200-$400, but in the long run that is cheap insurance.  

Something worth noting is how they treat this contract with you, it may be an indication on how they treat contracts with tenants.  Is it poorly worded, have errors, or look like it came from the supply store?  The lease could be just as bad.

I haven't seen any cashflow deals that make sense in Denver in quite a long time.  The difference between Denver and San Francisco is available real estate.  Denver can still build plenty more and has a decent amount to grow.  I'm not even a novice on the bay area, but I'm pretty sure they are out of land.

@Jay Hinrichs agreed.  I'm a lazy buyer in the soft markets.  I let taxes hit owners and properties sit for a year in many cases prior to purchase.  I know full well I will have the same difficulties on the sale side (except my properties need no work for sale).  I have done fix and flips in those soft markets with mixed results.

@Jay Hinrichs Selling is something we are seriously considering.  I like my current Denver rentals.  They are in an are that will be adding another 30k hospital/ biomedical jobs over the few years.  Median income will increase substantially here.  The question is can I take my  equity and put it to better use?  Or do I keep these, cash out refi and put that smaller money into play.  Its a fun dilemma to have.

@Jay Hinrichs Agreed on the turnkey company.  Many lessons learned on my part.  By the numbers they cashflowed from the start.  We both know the numbers are educated (or not) guesses on the potential cashflow.  Reality is a great teacher.

There is no doubt my best numbers have come from appreciation.  That was more dumb luck then skill.  I suppose the flips I have done are shortened versions of negative cashflow plays that rely more on forced appreciation than market appreciation.  Could I do it again with reliability, perhaps.  I add in the cashflow requirement to back up my limited understanding of the growth potential of markets.

It depends on your ability to absorb the negative cashflow while either managed or market appreciation takes place and be ready with backup plans if your primary plan fails.   I think a negative cashflow for appreciation is an advanced move for seasoned investors.

Jay, great discussion.  I think its important to understand the value of appreciation and cashflow on each deal and realize both are useful in any long term strategy.

@Jay Hinrichs  I actually bought 2 of the rentals via turnkey companies.  Purchase via hardmoney and refi'd into traditional loans.  The hard money was practically transactional funding.   The turnkey company does other things and I have had some costly repairs over the years.  Those turnkey properties only cashflow now, as I have had 2 furnace replacements, 1 water heater, 1 plumbing system, 1 electrical box, and 2 major water leaks, and a sewer line replacement.

As for cashflow vs appreciation, I like the balance too.  I have cashflow properties in MO, WI and MN that are not likely to appreciate. (That's not entirely a bad thing as any tax increase would eat my cashflow) Those are merely to push my wife and myself away from the W-2.  We also want to buy in appreciation areas for long term wealth.  The difficult part is they still must cashflow.  I disagree on taking negative cashflow in the hope of appreciation.  Many folks lost their shirts in 2008 by doing that.

I got the case number from the title company and looked up the representing attorney.  Got to love google.  Apparently the judgement is not on the property bu on any Jason Miller in St. Louis or any Jason Miller who has dealings in the city.  I have to have the bank pass along info to the attorney's office verifying its not me and have the attorneys office send a written not to the bank verifying the judgement is against someone else.  that info then gets sent to the title company.

I do find it discouraging that floating liens can be pushed out there and random people who happen to have the same name, but I don't see that changing anytime soon.

@Jay Hinrichs  I purchased 4 rentals between 08 and 2011 in that market, plus my own home.  They have increased in equity around 80k each and all cashflow $100-$250/mo on my very conservative numbers.  Sold a 2/1 for 15k over asking in 3 hours In Oct of 2014.  Bought it in 08 for 90k, sold it for 160k.  I likely could have done better holding it through this year or with a better realtor, but I have no regrets since it bought me a 350/mo net cashflow duplex.  I stopped looking heavily here in 2011 when a rental i was looking at had 26 bids after 1 day.