All Forum Posts by: Jeff Bridges

 I think you failed to understand his message. He was stating that shooting out 100 offers a month only requires the knowledge of sharpening a pencil. It's more targeted opportunities that expand the focus beyond the merely x% of asking price that lead to generating a profit. He wasn't telling you to go learn how to sharpen a pencil:) That seems like a perverse interpretation of his response.... Maybe review it one more time without the misconception that he was going after you....

I'm making a few bids on properties in Aberdeen, MD (north of baltimore, MD). Harford County, MD. Looking at 3/1 properties. Does anyone have any landlord experience in this area? Is there neighborhoods to avoid or stick to? Any good property management firms in this area that you would recommend? Rehab Contractors that might help in rent make ready for places I do end up buying? I'm DC-area based so I would need to have a PM and some remote support besides my occasional visit during the rehab stage. Thanks in advance!

Here is a good article on how to vet and pay contractors. If you vet a good contractor, you're less likely to have to worry about them walking away from the job after securing your money. You'll need to negotiate a draw schedule based on project milestones, with the last payment happening after all work is completed.  Most people take the total project cost and divide it into thirds or fifths, with that first portion paid up front. Universally saying that you will only pay someone $300-$500 up front won't necessarily work for HVAC contractors installing thousands in hardware or granite countertops. They have to make sure they don't get taken by investors without sufficient funds to complete rehab projects. If you write this down on your contract along with your expectations, there should be fewer surprises during the project as far as payment expectations.

https://www.washingtonpost.com/blogs/where-we-live...

another discussion about contractor payments:

https://www.biggerpockets.com/forums/67/topics/138...

I don't know MA laws, but if you have a fire alarm system in place, code likely required it be installed during construction and working at all times. The only way to prove that you were in compliance with this is through evidence of annual inspections etc. Think about liability should a fire occur and the fire alarm was not in working condition. I'm sure the fire Marshall will come if requested to perform an inspection, however they can also uncover various other violations that might require immediate attention and $$$. Once they inspect, you can't ignore their violation notices. Why don't you consider calling up a few fire safety and sprinkler vendors and request a free site survey to get a quote on an annual inspection cost. They also might give free advice over the phone on what local requirements are without bringing on additional pressure from a fire marshall.

Who is doing the management of these 3 units? Assuming one of the investors or a professional management firm is going to manage. Add 8-10% of the total rent as management fee to your own expense calculations. This should be done regardless of whether you manage yourself to see if it can be profitable with a property manager in place (no one will do this for free, even if one of the investor owners chose to take on this role).

This article might help you figure out which items will count for depreciation vs. deductions come tax time. Gutting your bathroom sounds like an improvement as opposed to a standard focused repair for something broken. Think "reasonable and necessary repairs" to the property for normal rental expenses.

http://www.houselogic.com/home-advice/tax-deductions/tax-deductions-rental-homes/

I'd go with neutral only if the colors you chose in specific rooms were very eclectic, difficult to match to a wide range of furniture, and might be a turnoff to a wide range of renters tastes. If you choose to keep colors, ask applicants during open houses if the colors look appealing to them or may have been a turnoff to them so you can see if you need to re-paint after initial open houses to increase interest... You always cover the HOA. Utilities are tenant cost and you want proof of utilities in tenant name prior to handing over keys, no exceptions. HOA fee has no impact on tenant responsibilities or their rent and does not need to be mentioned to them except to follow the HOA rules and regulations as part of your lease. The rent is what the market will bear.

If you rent your place out, be sure to follow the below link which contains a guide from BP to renting out your house very carefully, not cutting any corners on tenant screening to avoid future possible headaches. Never be desperate to approve any applicants that don't give you warm and fuzzy after doing the full screening. It's ok to leave it vacant instead of putting bad tenants in. Consider getting a property manager if you are not interested in dealing with the items below and treat the tasks like one would a business. Good luck.

http://www.biggerpockets.com/renewsblog/2013/01/04/how-to-rent-your-house/

If you are to deduct, take photos of each item in need of repair, then get written professional proposals. If those proposals are under SD amount, then have the professionals do it and save yourself time and effort. Write out a quick statement to tenant for all costs and subtract from SD. mail remaining balance if there is one or show that additional funds are owed to you if those repairs exceed SD amount. then mail statement to them certified receipt and email etc. Include all original proposals for repairs and original move-in inspection report showing good condition. If they sue you, you have move-in inspection, photos of damage, professional proposals showing cost of repairs and your statement of move-out repairs and costs. You'll have adequate resources to present to judge if required. Remember you are not obligated to save tenant money by personally doing work in lieu of hiring a professional. They lost that option when they chose not to take care of it prior to move-out.  But if costs to hire a professional to mitigate damage are still under the security deposit amount, I suggest you go with that route as that provides a third party to verify that there are damages present and cost you money to take care of them vs. tenant perceiving you as making up damages and repairs which you supposedly repaired. Good luck!

I'm in MD and mine charges a flat fee of $500 for contract preparation, but they offer a $200 discount if I close with the title company they are affiliated with, so it would be $300 if you ultimately close the deal. They charge $250/hr for any involvement in contract negotiations beyond initial preparation, which is about regular attorney hourly rate. I shopped around and called several title companies to inquire about their attorney contract prep fees, compared reviews and ultimately found the one I have. It might help if you reached out to a few title companies and compared rates and see if they offer a discount on contract prep in exchange for closing with them. You might benefit from ones who deal with real estate law on a regular basis vs. your normal affairs attorney, but your call.

I'm just offering business and long term perspective. These questions are mostly for you to answer. How long has the business been in business? Are they profitable? Can you ask to see their books or basic numbers to see if they are profitable? If the business were to fold, what would the new value be of your property? Does the price account for this risk to your income? Would there be another business besides coffee be able to replace that tenant? What if you are overpaying for the value of the property based on current rent numbers when the reality is that once this tenant leaves, expands or fails, you will have no means to generate income for the property unless you redevelop the land into better retail etc...