All Forum Posts by: Cassi Justiz

The agents that I have met that do project management typically charge a flat fee or percentage of the rehab budget. I briefly looked into this but quickly decided it was not something I wanted to get involved in. I think it can be a great asset to your client base if you enjoy coordinating rehabs and managing people. The process that I've seen usually involves the project manager creating the punch list, coordinating multiple bids for the work, coordinating with the GC on timelines and being the go-to communication person for both parties. They also help resolve disputes between contractor and client, keep contractors on the timeline and provide regular updates on the project.

Depending on your brokerage model, you may have to set up a separate company to do your project management piece. It's definitely a needed service, it just depends on whether it's something that you want to do. 

I'm personally working on scenario 2. My reserves goal is 10k per property which would cover most "what-if" scenarios. (multiple cap-ex, insurance claim + make-ready, etc)
Once I reach 10k per property, then I can re-evaluate and determine whether it's time to start paying down mortgages or add additional units. 

If you are looking at investment property, most lenders will not allow you to put less than 20% down. Some even require 25%+. 

If you can afford to do 20% down I say go for it, even for a personal residence. Some people are okay with PMI, but I'm not a fan. It's definitely a risk tolerance thing. I would rather have the lower monthly payment than the payment + PMI.

My parents do this with a condo in Hawaii. They bought it fairly cheap, did a full remodel and now have it on airbnb. They usually go 2-3 times a year and stay for 2ish weeks at a time. As they get closer to retirement they plan to increase the lengths of their stays until they are fully 50/50 residents. When they are not there, it is an airbnb. It's income producing and they are able to write off travel expenses when they go to visit. There are definitely risks associated with this method because your income can fluctuate drastically, especially in the beginning while you are still working on building up your reviews (or in the case of a global pandemic). I would say it can work out well as long as you can afford to pay the mortgage/expenses if it is not occupied. But I wouldn't get into without a really stable safety net. 

Escrow is probably required if you are putting down less than 20%. If your lender will allow you to not escrow (and not charge you a premium), I prefer to not escrow. 

Escrow pros: You don't have to remember to pay it.

Escrow cons: You have 14+ months worth of taxes and insurance sitting in an account that you can't access. Depending on the mortgage servicer, it can be a pain to update the info when the taxes and insurance rates change. 

I prefer to not escrow, but on conventional loans you don't always have that choice. I like to pay my insurance and taxes with a credit card (for points!) and then I pay the credit card in full.

It will vary from state to state. Non-renewal of a rental agreement is treated differently than an eviction and from what I've heard, most states didn't restrict non-renewals. 

I'm not an attorney, but I agree with @Dylan B. on this. It's time to get her out.
If the tenant isn't willing to sign a lease then the current lease is still in place. I would be careful though because if her lease specifies she pays $1400/month and that includes access to the main house, then it could cause you headaches. I would get with your attorney to see what your options are to get her out. This is definitely something that you want professional legal guidance on, she's going to fight you over whatever you do so you need to do everything by the books and expect to go to court over it. 

Hey @Jason Faust, 

I am also OKC based but from what I've heard a lot of people really like Tulsa. Reach out to @Tracy Streich and @Scott England. They are both heavily invested in the Tulsa area and have a lot of great knowledge of that market. 

I'm always happy to help! 

Thanks for the shoutout @Kurt Michaelson! 

@Account Closed, I would consider this one an B class rental. When I'm looking at class categories most of the time I am looking at finishes and property ARV. I know what the standard REI nation rehab looks like and based on those finishes I'd put it as a solid B. Typically A class is going to be quartz/granite counter tops in kitchen and bathrooms with nicer backsplash, open concept living/kitchen areas, stainless appliances, updated bathrooms, nicer flooring, etc. Most of these homes also have an HOA with neighborhood park, pools, etc. For the most part, these are your 200+ ARV homes.

B class would be clean formica or tile counter tops in the kitchen or low end granite, mid-range appliances, tile or vinyl tub surrounds in the bathrooms, tub/shower combos instead of free standing tubs, etc. Neighborhoods usually go to solid schools, but won't necessarily have the HOA with the maintained park or amenities. Usually these are your 120k-175k homes. Once you get to the upper end of that price range you are may be reaching into the A range depending on finishes and neighborhood.