All Forum Posts by: Jeff Bridges

Every market is different. You can upgrade to oblivion, but your neighborhood can only support a specific rent regardless of house nicely appointed it is. Use your budget to make smart upgrades but also think about hardening the rental against tenants. Maybe go check out an open house or 2 nearby for a similar property to get some ideas on how nice you need to be for the rent you want to charge.

things like using satin paint if you choose to paint, adding doorstops to protect walls behind doors. Consider "like new"/refurbished appliances from nearby smaller appliance store if the ones in the kitchen are dated or past their lifecycle. Black sometimes might be much better value than stainless but you have to check availability and might get lucky. Maybe add simple cabinet door hardware/handles to prevent cabinets from getting grubby and add some class. Only do countertops if they look worn or very dated...

links on hardening rentals:

http://www.biggerpockets.com/forums/52/topics/68041-how-do-you-harden-your-rentals

http://www.biggerpockets.com/forums/311/topics/75451-bomb-proofing-rental-properties

My take: I don't like how they haven't moved in and already have issues with the unit in its current condition. Most landlords say sorry, the unit is rented as-is, no upgrades available. Brand new washer? It already meets pretty strict energy standards and is 3 months old, sorry! Dishwasher? They never even tried using it yet and are already asking for a new one. Those barely use any water and are not considered energy hogs anyway on the grand scale of things in the unit. Now if the kitchen is looking dated and you are having trouble renting in general, might be worthwhile, but that's a personal judgement call. it still works fine and can be replaced very quickly when it fails otherwise.... You are wise trusting your gut and avoiding complicated buyback programs or other shenanigans. They are free to order a replacement dishwashwer with professional install at their cost and it remains in the property afterward.

I don't understand. This doesn't seem like a very expensive lesson. Maybe I value my handyman hourly rate at around $40/hr as reasonable, so your "lesson" costed you $100 in my eyes. I still see this as a positive where you sacrificed some of your budget to support family members and they actually came through with the job. It could have been a more interesting lesson if they really didn't actually know how to paint, charged you $500, then you had to pay someone else $$$ + new paint supplies to redo everything that they had previously done. But in general, you are right that hiring family can be riskier than hiring professionals.

I'd follow the BP screening guide:

http://www.biggerpockets.com/renewsblog/2013/01/27/tenant-screening/

then use an online background/credit check service and get payment directly from applicant. Only start the below process if they have met your initial criteria for applicants so you dont waste anyones time:

https://www.mysmartmove.com/

the two sister applicants sound much nicer with stable jobs. 2 people and one dog instead of girlfriend/boyfriend(suuuuure he won't live there....)/2 kids/ 2 aggressive breed dogs. that's twice as many live beings creating wear and tear on your unit for the same price. The above thoughts shouldn't need to be your basis for disqualifying them, since I disqualify due to aggressive breed. Many insurance providers will not cover liability associated with aggressive breeds and some cancel policies if they are found to be on the premises. I know of a very sweet agressive breed dog, but that same dog lost its cool when it saw a chihuahua and got loose and bit the dog causing all sorts of issues... Not the norm, but if that should happen, your insurance might not protect you. check with your provider.

HOA board members need to operate in the best interest for the HOA. As a board member for my HOA, I learned that we should only invest our funds in short term bond/ money market funds where risk of loss of original principal is low, even if such instruments don't keep up with inflation. Any other types of investment in ETFs etc where risk of loss is much higher, board members could be held neglient in investing HOA funds recklessly if that approach resulted in the loss of original principal. The only scenario where they could begin to invest in funds other than short term low risk investments is where every single unit owner signs off on investing funds elseware in writing to approve a riskier investment approach in order to CYA.

your next step is to read this BP blog article:

http://www.biggerpockets.com/renewsblog/2014/04/04/warning-newbies-stop-wholesaling-now/

I don't do any wholesaling but maybe this can give you some advice...

There is a free account and there is a premium account , the latter of which I recommend trying. They advertise their number and send you the recorded voicemail via email link from the verified lead. If the lead is a dud and didnt really have any interest, you get refunded no questions. each lead is $10. There are good explanations on their website and a list of sites they list on. free one includes zillow, hotpads etc, but the premium adds a couple more and will only charge for those premium site leads. normal site leads wont bill you any cost.. You determine the max amount you pay each month so they will stop taking premium leads after a certain cap you define... When rented, you switch the button to unlisted and it takes them all down within 24 hours so you dont have to go to each site. it also takes 24 hours to populate to all the sites when you first activate the ad so be patient.

My own locally applicable assessment is that the weather has been subpar up until mid March especially due to those march DC/MD snowstorms. Just as people have delayed their spring home purchasing as a result of the weather, they have also put off potential moving opportunities for rentals. I think this weekend is a good time to advertise an open house by appointment on sunday 2-4pm and update/ refresh your online ads on craigslist and other relevant sites. also consider using rentlinx.com to post an ad on a slew of premium sites simultaneously and pay $10 per premium valid applicant lead. I've used it with success in the area. highly recommended. Just set you max limit per month at around $50 so you don't overpay for too many leads... $50 is worth the potential of facing an additional month of vacancy. Sometimes CL alone doesnt magically turn up a host of callers...

@Alison watch your math. At your figures, your break even point is 3.3 years:) Thats certainly not a bad amount of time to break even, however I want to put some caution up with your actual figures. You appear to have forgotten closing costs which can be around $1500 and are funds you need to bring to closing. also, you're rehab estimates are likely too low. Finally, I hear townhome and think condo/HOA fees. You need to triple check if you need to add that to your costs. The listings unfortunately dont always have all the info you need like true taxes and actual HOA fees to make informed decisions and could really mess you up if you trust everything that IS actually shown there. Also, I'm thinking of a few neighborhoods that this listing might be in and those might have some red flags for new landlord/investors. If you want, you can PM me more details about the listing or neighborhood and I can provide a little more assistance. You don't have to share the actual listing if you don't want to, but I can help you find real figures. I'm a Hyattsville-based landlord as well with a focus in PG county so I know many of the areas...

I personally look at annual cash on cash return and look for ways to commit the least amount up front for the most cashflow.

Lastly, have you found a lender willing to lend you 30k on an investment property? finding lenders willing to lend for under 50k is tough. Its doable but, some of the big guys will pass on it...