All Forum Posts by: Carlos Quiros

The reason the PM contractor bid is higher is most likely the PM will be managing the rehab as well and that is not done for free. Get the PM bid and your guys bid and compare.

@Carlos Quiros we run into this all the time.

You can ALWAYS find a cheaper contract! Bet you any amount of money...

The problems are:

- Do they want half down?
- Will they disappear with that money?
- Are they properly licensed and insured?
- Are they willing to add you to their insurance as "additionally insured"?
- How do you know the quality of their work will meet your expectations?
- How are you going to monitor the project remotely?
- How do you know they will complete in a reasonable amount of time?
- What are you going to do if they ask for more money because they add repairs they "missed"?
- What warranty are they offering?
-Etc.

Your profile states, "New to Real Estate" and your naivety shows.

BTW - don't trust your PMC either! They should give you a line-by-line priced bid with supporting pics/video. Depending on the scope of the project, you should request periodic pics/videos showing/confirming the quality of the work and timing is on schedule.

Hello @Carlos Quiros,

Instead of choosing the property first, I recommend starting with your financial objective and working backward to what and where you should buy. I will assume that your financial objective is a reliable income.

Reliable Tenant

You will only have a reliable income if a reliable tenant continuously occupies your property. A reliable tenant stays many years, always pays the rent on schedule, and takes good care of the property.

Reliable tenants are the exception, not the norm. And you'll need many of them over the years you own the property. To maximize the odds of always having a reliable tenant, buy a property that attracts a tenant segment with a high concentration of reliable people.

How do you find a tenant segment with a high concentration of reliable people? By interviewing multiple property managers. Let me know if anyone would like more information on interviewing property managers.

Once you identify a tenant segment, determine what and where they rent today. From these properties, you can derive what I call a property profile. A property profile has at least four components, as listed below.

• Location - The locations where significant percentages of the target segment are renting today.
• Property type - What type of properties are they renting today? Condo, high rise, multi-family, single family?
• Rent range - What the segment is willing and able to pay.
• Configuration - Two bedrooms, three-car garage, large back yard, single-story, two stories?

You can give the property profile to any realtor, and they can find conforming properties.

Carlos, if you buy a property that matches the property profile for a tenant segment, the majority of the people who apply will come from the segment you are targeting.

However, not all the people in a segment will be reliable. Only a skilled property manager with years of experience can consistently select reliable tenants. I've worked with many property managers in Las Vegas over the years, and I only know of two with this skill.

You might be thinking of saving money by managing your own property. You can't afford to do this. One bad tenant will cost you more than a property manager for years.

If you insist on managing your own property, I recommend you work with a property manager and get a reliable tenant in place. After the first year, take over the management. This way, you have a good tenant, all the necessary contracts, and the processes in place.

Carlos, I hope this helps.