All Forum Posts by: Cameron Lam

Joe great comments.

1) No idea on Venmo.  They are linked to my business accounts so not sure if that is following their guidelines.  Will need to look into it.  So far haven't had any problems.

2) 34 tenants. Total time each week is 0-5 hours for everything.  That includes showing the properties to new tenants, tenant screening, sending rent and utility requests etc.   What's cut down on time even further is I will send potential tenants to the house and if the current roommates like that person and recommend them it helps with the screening process.  I also have contractors for any problems that happen.  Tenants tell me...I forward to contractors...they take a before and after pic and then charge my account.

3)  Didn't do anything special with construction.  Did add extra insulation in between walls for better sound barrier.  I think this is a fair assumption.  I do estimate around 7% for capex of gross income(I will break it out line item by line item for older properties).  My 7% is more like someone else's 10-12% as my gross income is generally higher and includes utilities.

Tom thanks for the inspiring response.  Down the road when you do a portfolio 1031 exchange for a larger complex as you described...do you usually sell the current properties to one investor or piece them off? I'm guessing it's easier to get different buyers for different properties but wondering if you have to get the timing of the sale with multiple buyers right.  What's your experience been with this?

Dempsey this sounds like a great deal from the numbers you just posted but I think you'd have to do a detailed capex analysis on this and see what you'd be spending every month.  For instance...if the AC cost 4000 to replace and has 2 years useful life left...4000/2/12 = thats $166/mo in capex costs for the next two years.  I would itemize each big item.  Brandon turner had a post about his $40K hell house that had great cash on cash but he did not do a great job of estimating capex.  That would be my only two cents.

Jon, the turnaround time from when we put an offer in to close can vary from 30 to 40 days. I can keep borrowing as 3 of the homes I purchased were primary homes which didn't count toward the 5 investment total that the credit union has a limit on. The other loans are a mix of my brother and me on the loan and title and then were quit claimed deeded to an LLC. Without boring you with the specifics...I've used up 3 loans with the credit union and have 2 left(5 max).

My DTI stays low because I am able to use signed lease agreements to qualify as income. The credit union takes 75% of the gross rents and adds it to the income.

Closing costs are high.  Usually around 8-10K per property I purchase but that usually includes 2.25% in origination points due to my lender allowing 10% down on the properties(less down = higher origination).  I could go to 1.5% origination at 15% down but it's worth it to me to keep the extra cash.  I also recommend finding a realtor who will apply a credit to you for working with them.  My realtor gives me a third towards closing costs of his commission as I've done probably the most volume in 1 year compared to any of his other clients.  Find someone newer as most realtors laugh at this proposition.  Honestly, if I was a realtor I would offer half my commissions to everyone just to build up my client base in the beginning...

I'm from southern california as well.  Made the switch to AZ partly because of the astronomical prices in CA.  It's a different game there...all appreciation vs cash flow but a game that you need a cash offer or 50% down to even play.  My brother lived in Summerlin for a few years and I love that area.  I don't know the market well but I've seen prices that look comparable to my local AZ market. 

Someone had mentioned it.  Have you had experiences with it?  Good, bad? I like Venmo because all of my tenants already have it.

 Hi Rebecca!

My wife works part time at a daycare so while she does have a w2 from 2019 it may be somewhere around $20K gross.  We got married at the end of 2018 and at that time I only had 2 properties so this will be my first year of doing taxes with all these units.  What's your experience been with this?  I know there are benefits to having your AGI low enough so that you can apply 25% or so in passive losses to your taxable income...not sure what the thresholds are for that though.  Need to have an indepth discussion with my CPA.

Also, I know that many people like to shield their taxable income but I know this is going to be balance between keeping my DTI high enough so that I can continue to accumulate properties and not having it be ridiculously high where I'm paying extra in taxes...

 Awesome question

1.  Have only had to play referee once.  Moved tenant to another place, found a great replacement and that was solved.

2.  I look for places with more bedrooms normally.  Usually 4-6 bedrooms+ and 2-4 bathrooms.  3 people per bathroom max is my rule.

3.  Sending the cleaner in helps maintain the whole house.  I'm having a tile and grout cleaner come in to do deep detox on one of my properties and my tenants are always appreciative.

4.  My leases have a damage clause in there.  Any damage caused by tenant or associates is taken out of their deposit or billed to them for repair.  With 4-6 people in a home most people are aware of who did the damage.  Worst damage I had is a whole in the drywall from a tenant backing up into the garage too far.

5.  Yes I buy extra appliances namely fridges.  Max people per fridge is 4.  If I have more I add more.  I also get washer dryers with large capacity.  

6.  Yes everyone has keys to their bedrooms

7.  Advertise vacancies on zillow but mainly facebook groups for colleges in the local area.

8.  I charge 20-25 per garage spot.  Longest tenured roommate gets first dibs.  Then I go down the list.

Pete thanks for the kind words! Wish I could invest out in silicone slopes near you but the competition and price are so high!