All Forum Posts by: Bridget Krause

@Jennifer Torino

These numbers seem extremely high to me, obviously we are in very different markets but it still seems high. Are you able to dig in a little more and be your own general contractor, as well as take on some of the work yourself?

You need to take away the huge cost of the general contractor. This guy is just going to hire sub contractors for you. I'm the general contractor on all my projects. Get 3 quotes from roofing contractors, plumbers, hvac, electrical, kitchen cabinet guys, drywall, etc. In the beginning, you don't necessarily know you are getting taken advantage of. I let the contractor know when he walks in the door that I'm not trying to waste his time but I do get 3 quotes. They usually respond with, I'm okay with a little competition. As soon as they say those magical words, I know that they understand that I want a fair price.

I also wouldn't shy away from taking on a little work yourself, when I say a little, I mean a little. Try taking on painting, you don't need a whole bunch of special tools, and it will save you a lot of money. Don't try to be a super hero in this area, especially if you are working a full time job. But at the same time, it's okay to get your hands dirty.

Last but not least, understand how to source materials for cheaper. Homedepot has a bidroom for contractors/ business owners. Anything you buy over $1500 you can send to the bidroom. You can order/ pay, and have your contractor pick them up.

This may not be a bad deal, just sounds like it needs more planning. Best of luck!

@William Merone

Money orders can be cancelled, but does take some time for it to happen, it varies depending on where it was purchased. I would let them know that you need proof that they started the process. In the mean time, send a notice for non payment because the tenant still owes you. You can't just be out a month's rent because they claim it was in the mail. Maybe, they are telling the truth, but maybe they aren't. Starting the eviction process sooner than later is always better. You don't want to wait another 2 weeks waiting for proof to find out they just stopped paying.

@John Lanser

The first property I bought I asked a retiring landlord how he did it. He said in this neighborhood if you don't knock on the door on the first of the month, it will never be in the mail. For a few years, I did exactly that. It gets old real fast chasing down rent payments. One tenant will have it on the 1st of the month, 2 on the 3rd, 3 on the first Friday, 2 on the 10th, and 2 on the 2nd Friday. Before you know it, you are running around the entire month collecting rent and burnt out. I wish I could say as you scale this just isn't reasonable, but the reality is, it was never reasonable. I should have never played this game even with one tenant, especially for as long as I did.

Most people in D class neighborhoods don't have checking accounts or debit cards. So my best option was CashApp, they have a card that can be ordered through the app and it can be loaded with cash. This App has been wonderful! It has saved me countless hours throughout the month. I know right away if they have paid on the first, I'm never told it is in the mail. This is the only form of payment that I accept now.

With all that being said, I also use Tenant Cloud for applications, background checks and marketing available properties. I wish I could utilize rent collection there too, but I just can't for D class neighborhoods.

Hats off to you for getting systems in place to make your life easier, I wish I would have done it sooner.

@Hunter Wolfe

Try a local bank instead of a big bank. Local banks and credit unions are more willing to make exceptions than big banks. Don't give up with trying conventional ways before going to private money, let several banks tell you no before you go to private money. Private money will always be more expensive, you definitely want to lock in lower rates if you can.

@Dustin Sanders

I look at equity as being cash, I can access it anytime I want with a cashout refi. I just choose to leave it in the house because getting a .25% interest rate at the bank just doesn't make sense. If I did pull it out of a house, it definitely would not be sitting in a bank, it would be used to purchase another investment. So my answer to partners or potential partners would be never will I have a million in the bank, I would be a bad investor if I did.

@Diane G.

When in doubt, contact your lawyer for issues like this. Every state has its own laws which have some gray area and can be explained by your lawyer, or maybe there isn't any gray area at all. Everyone is going to have an opinion, but opinions from BP won't matter when you are in court getting sued. This is not a BP question, it's a lawyer question.

I had a possible tenant a few years ago apply for one of my houses. Everything on paper looked good. When I showed her the house, she told me her kids had been taken away by Child Protective Services. My first thought was, if she's not taking care of her kids, she definitely isn't going to take care of my property. I did not know if this was a legitimate reason to deny someone. So, I picked up the phone and called my lawyer.

Your lawyer isn't going to charge you for a 2 minute phone call. I would rather have a clear understanding and be safe in my decision rather than be sorry with a fine, lawyer fees, and court cost.

@Anthony Vander Meer

Yes, I just raised rents on July 1st lease renewal, nothing crazy, just $25 to cover an increase in taxes and insurance for the year. I have 4 more lease renewals in August and September, I'll be doing the same for those as well. I'm not trying to put additional funds in my pocket with these increases, just trying to break even with the increase in taxes and insurance.

@Felicia Jackson

When I first started investing I researched Flint, Detroit, Mount Clemson, Lansing, Saginaw, Port Huron, and Pontiac, all the lower end markets in Southern Michigan. After considering the amount of risk compared to upside potential, Flint didn't come anywhere close to making the cut. Actually, the majority of these cities didn't.

The only city in the lower end market that I found would make a come back was Pontiac. My predictions, have turned out to be correct, even more so now that Amazon is building there. Look in Oakland or Macomb counties, they have cities like Hazel Park which is up and coming, Madison Heights, and Warren. I would even check out Pontiac, you can still buy rentals for reasonable prices. Amazon will help stabilize the city even more than what had already been done the least 10 years.

If you still plan on investing in Flint, just know it is going to be very hands on. I just re-evaluated this market last year to see if anything has changed, and it hasn't. I had the opportunity to buy a 36 unit apartment building and I walked away from the deal.

I can't tell you how many times I've seen first time investors buy in a bad area thinking they are just going to rent to section 8 and everything is going to be ok, they are first time investors and last time investors all at the same time. They end up having such a bad experience they don't ever invest again.

You can do better then Flint. Keep researching, you'll find another city. Best of luck!

@Matthew Odou

There are really three things that I would take into consideration.

1. All states are either tenant friendly or landlord friendly, I would not move to a market that is going to favor the tenant. You are going to go through evictions and you will want the court on your side. I live in a tenant friendly state and it makes things more difficult than it has to be. When I got started, I didn't even know there was such a thing as landlord or tenant friendly states and it matters when you are in this business.

2. I would choose a market that has more than one industry supporting it. I'm in the Metro Detroit market and everything is really one industry, everything revolves around the auto industry. Whenever a recession hits, we are always one of the first states hurt economically, and the last ones to recover. This will make a difference in keeping units full. Look for a market that has multiple industries supporting it. When a recession hits, it will help with stabilizing your rentals.

3. The last thing that is important is knowing section 8 market rent for the areas you are considering. Will you be able to rent to section 8 at the rate you need in the area you choose. I know there are a lot of negative perceptions about section 8 tenants, they are not all true. About 10% of these voucher holders are just like you and me, they take care of stuff and don't destroy everything. You screen these tenants just like everyone else, no special treatment or exceptions, if they don't pass your screening don't put them in. The section 8 vouchers that pass your regular screening are the 10%, they will stay for years. The least amount of turns in your property the more money you make.

I know that I didn't give you a specific market, but these three things are more important than you know. This will at least give you criteria in order to eliminate markets when researching.

@Deborah Repaskey

This is an easy no. All my properties are in D class neighborhoods and I wouldn't even approve this applicant. If they haven't paid their previous landlord, what makes you think they are going to pay you? I promise you, they will become an issue real fast. You aren't desperate for a tenant. I would rather leave my unit empty an additional month to get the right tenant that will stay for 7-10 years, rather than put ther wrong tenant in. You will end up in court having to evict them. Save yourself the headache and move on to the next application.