All Forum Posts by: Josh C.

Your logic and math are completely off. Actually backwards.  
Won’t the management company make less money when there aren’t turnover costs and no lease up fees to collect? And wouldn’t the owner make more money with additional income from late fees and lower turnover expenses. Love to see how you think extra turnovers are good for the owners. PM companies make less money when they have to chase rent and go through evictions. I wish all the tenants never moved out and paid rent on the 1st. I wouldn’t have to hire staff and would just play golf all day. Lol
Additionally, problem tenants aren’t the owners problem anyway, they are the PM companies. So your PM company has to call and text the tenant a couple times to collect? Why would the owner care? He/she still gets paid, and then some added revenue with late fees. They don’t charge by the hour, it’s a flat fee.  To think every tenant needs to fix in this perfect box is short sided thinking and not 5 year cash flow thinking. This is the exact “Boss” thinking that doesn’t capture real bankable dollars and instead captures your ego. Now if this was a newer tenant or dirty tenant I’d probably agree with you, but not a 4 year who takes great care of the place which is this situation. 

Side note since you brought up rip off, what sort of property demands on site management for only 25 units? Assisted living or the like is reasonable I guess, no idea and not my space, but surely not a normal rental. 

Less directed at you and more directed at some of the replies of ensuring broom swept at closing or demanding rent on time or else you serve papers. As a property manager who manages hundreds and hundreds of homes and personally own some I can tell you without a doubt that homes with 4 year tenants that care about and treat the place like their home are very profitable, plus the tenant is happy and feels at home. About as win win as can be had in the rental business. To not only lose that situation, but add a turnover and vacancy cost, additionally during the current climate is a poor financial move. I don't understand the mentality sometimes of the group being so quick to kick out long term tenants over smaller infractions. It's contrary to cashflow. Our company works very hard to find long term tenants and understand their value to the ROI of the property. Now, we file several evictions per month at our company and don't tolerate bad behavior, but that is not the picture you painted. You painted a great tenant who is late on rent often. If cash flow is your goal I'd strongly recommend you get a spreadsheet out and calculate your current situation over the next 4 years (assuming she stays) vs 2k turnover and 6 weeks vacancy that happens every 2 years.
I see you are newer and I’d like to give you the perspective of this really is a people business and taking small concessions here and there and getting a good working relationship with your tenants is good for the tenant and extremely good for your bottom line. 

Sometimes I wonder if anyone on here wants to make money providing quality housing or just wants to be the boss and control people. You have a tenant that “takes great of the place and been there 4 years” and she is all caught up but the last 20 days. You would be insane to kick her out in general times and absolutely manic with curtain conditions.

What do you think a turnover cost is on a place that hasn’t been turned in 4 years? How long will that turnover take? Add those two numbers up and decide if a great long term tenant who pays a little late and probably extra rent with late fees is worth that. Plus you have no guarantee your next tenant is any good and won’t trash the place. Penny wise and pound foolish. Long term tenants are typically a little entitled yes, but no turnover cost are well worth the super nominal headache. Tell her kindly you need rent by the 5th or whatever the lease says and go from there. If she leaves because you played hard ball you probably cost yourself 5-10 grand at least over the next 5 years in added turnover costs and vacancy. Especially, this being your first one and not having a good handyman or GC or anything for that matter. Just silliness.

At least in Indianapolis you want long term tenants paying you rent and to lower expenses like turnover costs. That equals cash flow. But if being 100% in charge is more important than cash flow kick her butt out and you can tell your friends like Will Farrell did “Gator don’t play”

@Michelle Dong

At 16th st there is some developments happening. You only have one street so I don’t know how far North or south you are. But some good pockets potentially in the of progress. But to say it’s an established neighborhood would be an exaggeration.

Good luck!

As said above, that’s too general. Can you give major cross streets? As a property manager we manage a lot over there and really can change fast. I’d be happy to give you my opinion if you gave some cross streets.

I think you are right. C/D depending on the street. If you like the west side I’d push you more towards speedway and eagledale and not haughville or marrs hill. Way less tenant drama. Or Pike if you can afford it. We get great tenants in Pike.

If the A class drops in price and the B and C class renters want to live in A class where do the current A class renter live? Seems like classic supply and demand. If increased demand from renters from A class, B class, and C class all wanting A class buildings how do prices go down? Now I’m from the Indianapolis where A class rents are $1400-$2200 and not crazy 5k a month, but that logic doesn’t make a ton of sense to me.

In general Airbnb hosts are more savvy than the general seller who is being wholesaled. I would think it’s unlikely that’s a good list anyway. Doubt they will give away their equity.

@Stephen Foltin

I don’t agree with your cash flow numbers. If you don’t have a tenant for just 3 or 4 out of the year you don’t cashflow. One tiny maintenance or really anything will kill that very tight spread. Even on a new build something will happen. Just call it what it is. You want a nice place to live. No problem. Just don’t dress it up to be an investment because it’s not a cash flowing rental.

Great advice above about living way below your means and making good money young to be super set up in mid 30s. I lived in a duplex and rented the other side when married and kids and did several live in flips in my twenties and those early sacrifices paid off unbelievable.

@Jason Ma

1) 4-10 depending on area, I feel like lots of things being priced at a 7 cap right now.

2) actually this has more to do with zoning than permitting. If zoned right not much the city can do unless it’s something really off the wall. The people building downtown aren’t the normal apartment builders for the most part and use government programs and leverage different than us average joes. But that’s a whole other topic.

3) impossible to know. Silly to try to know. I’m in the middle of my largest purchase and banks and appraisals are a tad slow, but everything else is moving forward as the deal makes sense. Maybe a hiccup in economy, average people need an average place to live always. I wouldn’t want to buy $1900/month fancy condos right now, but normal rentals aren’t going anywhere and thus won’t drop in price.