All Forum Posts by: Chris London

The sewer tax is a tax and not a utility (not to be confused with sewer & water). So you would pay for it. For the dryer vents, I'd recommend marking it on your calendar and scheduling it yourself and paying the company directly. I would suggest leaving the tenants with as little additional responsibility or side payments as possible if you don't want to be disappointed. 

@Mike Bussing, I'll write in favor of the deal.

Don't forget about the potential appreciation on the property, principal paydown by the tenant, tax benefits and ridiculously low-interest rates. 

I think too many people only calculate cash flow. If you need the cash flow for your monthly living expenses then yes, of course, but if you're buying the property for your retirement 20-30+ years from now you get so many other long term benefits not achievable by other investments.

Your insurance rates may have been factored for homeowners insurance vs a landlord policy (property & liability). I pay approx 1/2 that rate for my rentals.

The others are correct though, you factored light for repairs and missed Cap ex and vacancy. I did see your reply regarding the new roof etc and feeling good about the 5-year lease.

Good luck, let us know how it goes.

-CL

@Jeff Lundeen great post topic! 

After 20 years all throughout So Cal and after getting married and having my 1st kid in Santa Monica my wife and I decided there was in fact no room for the middle class in the beautiful state of Ca. We discussed Seattle, Colorado, Austin, Fort Worth, Northern Va., NorCal (for her parents), and we settled on Raleigh North Carolina. We're specifically in the town of Cary which is often turned into the acronym, C-containment A-area R-for relocated Y-Yankees.

I see a lot of people here from NY & NJ often to escape the high property taxes and cost of living. It's not often I run into too many others from California.

I will say as someone else joked earlier in this post. Our state is full :)

I would suggest looking at rental websites and looking at all the truly terrible photos. My favorite of course is the photographer (or their arm) in the bathroom mirror. I bet if you asked these photographers they would say something very similar to what the majority of people in this post have said...I do it with my cell phone and it's fantastic!

Photography is what sets our rentals apart from other rentals and companies. It starts with making sure the blinds are all open and you get as much light in as you can. Use a tripod and a wide-angle lens. Use photo-specific software to both correct crooked pictures and properly brighten your pictures.

If you can't or don't want to do this all yourself you should hire a professional photographer. In my area, I pay about 1/3 of what you mention above for photographs (no drone or video). You'll have the pictures forever.

@Brian Bonetta it's interesting, where I live in Raleigh/Durham it is difficult to find properties that hit the 1% rule. I'd say we're more at .6%. However, we experience 3-5+% annual property appreciation.

About an hour from me is the town of Greensboro where you can certainly find properties that hit the 1% rule, however from what I can see they have extremely limited annual appreciation.

What separates a house as an investment compared to say a stock is that you have 3+ different ways to make money on a house (an investment property specifically).

1) Appreciation. Paper wealth that you don't realize until the house is sold and all fees/taxes are paid.

2) Cash flow. This is why people chase the 1% rule

3) Principal Paydown. The amount that the tenant puts toward the equity (principal) that becomes the owner's equity.

+) Tax advantages.

So, the 1% rule is great if monthly cash flow is your primary goal, however, don't forget to look at appreciation also to see more of the whole picture.

When I started (I'm in a seller's market) and I knew I wanted to shotgun out lowball offers I decided to get my real estate license. Best thing I ever did. 

Each offer took approx 3-4 hours. That was an hour to find the property and run the numbers, 1-2 hours to drive to the property and inspect it (inc crawl spaces and attics). Then another hour to write and submit each offer. I quickly realized that every property I looked at was closing at or above list price. I quickly changed my tactic, however in the 1st year I wrote approx 50 offers (150-200 hours of my time) to buy only 3 total properties. 

Learning the process, being able to talk to listing agents on a professional (inside level as a fellow agent) having additional resources like the MLS had helped tremendously. I enjoyed managing my properties so much I became a residential property manager working with like-minded investors and fellow BP members.

The more you can get involved with the process yourself whether it's buying or managing the property I think the more you will enjoy your results.

Best of luck with your house hunting, I hope you find success.

@Manny Lamarre at the end of your question you asked if it was worth trying to sue for past rent due or cut your losses short?

Yes, here in my home state of NC at least, here are the options.

1) Send to collections. If you pay a % you can expect to pay 25%-60% of the collected debt.

2) Take to small claims court. Right now, with Covid 19 you might find some difficulties.

3) Negotiate with the former tenant a payment plan in exchange for not doing #1 or #2 above. I have some colleagues that have had the best success with this option. It might look something along the lines of a written document where they pay you 25-50% of the total bill over the course of 12 months in exchange for a signed doc releasing them of their financial obligation.

@Ebony Brown I started out, like many on BP in the following order:

 1) Listen to 'Rich Dad, Poor Dad to find your motivation

 2) listening to the BP real estate podcast to find what avenue or real estate investing speaks to you.

3) Surround yourself with people that share a common interest.

Good luck!

-Chris

1. Mission/Vision
2. Company History
3. Company Links (CRM, Docusign, PM software)
4. Templates (templates for every situation).
5. Directory (employees, vendors, owners) Some will be in your CRM and some in your PM software
6. Tech how-tos (CMA, PM software training)
7. Marketing strategy
8. V/A contact and training 
9. Fees/compensation (if someone is taking over for you have their compensation outlined).

@Dan B., Quicken loans, Equity resources, you can try refinancing with the company that currently holds your note, Our local credit union offered a competitive rate.