All Forum Posts by: Michael Shadow

rentometer, craigslist, local newspaper, and calling for rent signs. Some property management firms will give you vacancy rates. You can get a feel for the rates by how many for rent signs you see and the number of newspaper ads. If you drive down a street in the core of town and don't see any for rent signs then the rate is probably pretty good, if there are signs on every other building better count on offering below market rents or look for another neighborhood.

When pricing rentals you can always get your place to rent before others, you just have to drop your price low enough.

If you get a chance to post an after pic that would be wonderful.

I'm in the process of reading it now. It has some good stuff in it.

By the way, which one of you will visit BiggerPockets and read all the articles for me and give me the abridged version of everything that is going on?

-Michael

Originally posted by "d_Random":

Yikes!
After reading Mikes blog, it would turn anybody off from landlording.

Haha, you think his blog is bad, you should read his book.... but seriously it's stuff that does happen and you have to be prepared to deal with it. I got a call the other morning at 4am from a tenant that was distressed because another tenant had come home drunk at 2am, turned up the stereo and proceeded to pass out in her apt, and none of the tenants could get her to come to the door so they called the police and after an hour of beating on the door they finally woke her up at 4:30.

Try a sewer pipe backed up because a tenant flushed feminine products down the toilet and your the one that has to snake the system from in front of the blockage because it's the only way to get to it without draining 200 gallons of sewage on the basement floor, knowing that once you free the blockage you better get the snake out fast and the cap put on the clean out. (I did it successfully)

6am call because there is no hot water, thermostat burned out in the middle of the night.

There's other stories I have too and I'm a noob at landlording, I've only had tenants for 3 months.

So realize it's like MikeOH says it's not nearly as easy as the gurus say. I still work my full time job then get home, grab dinner and go work anywhere from 2-4 hours on my rentals, then come home to do 10-20 minutes of book work. Last week we decided to take a week break from working on the rentals because we got all of the essential items delt with but now we're back at it and I have around 70 items on my todo list still.

Oh yea, our week break consisted of working two nights, once because we had a heavy rain and found out a sky light leaks during down pours and another to deal with the thermostat issue listed above.

So if this stuff scares you head for another investment, if it doesn't scare you then go for it. I am so glad I went for it, despite all the negative issues I've encountered already.

Don't get too focused on cap rates and gross rent multipliers. the thing you want to focus most on is cashflow, how much cash it puts in your pocket per month. You can buy an infinite number of properties that cashflow, but you are limited on how many properties you can buy that don't flow.

The properties with caps you listed, are they on the market right now, or are they deals that have closed and sold? There is a huge difference between what's on the market and what has sold. To get a feel for the caps in your area only look at sold properties.

On another note most people pay to much for their properties so even looking at the sold caps doesn't dictate to you how much you should pay for the property.

Get their numbers and substitute them with REAL numbers and add in all the expenses they left out (management, maintenance, cleaning, adverts, transportation cost, etc) and build your offer that way.

-Michael

Sounds like it would be a good way to get the inside scoop on the property, but what about conflict of interest? Some companies have conflict of interest clauses for their employees. Other than that it sounds like a superb idea!!!

How did you find out about this "job"? I'd be interested in pursuing one like it in my area.

Sweet deal, congrats on the find! :mrgreen:

Don't buy it for it's potential rents buy it for what it is currently renting for. Depending on the market rent in your area a $100/month increase would probably land you with a few vacancies right off the bat. Using the 2% rule you want to buy at less than 210k. If the current owner paid $120 though you should have lots of wiggle room to get it for much less than that. Go to the assessment office and look up the deed info on it so you get a better picture.

AND while your there and being that it sold twice in the past 4 years I would look deeper into it. See if you can find the previous owner and ask them whey they sold the property. Might give you some more insight on the issues with the property than you would get from the current owner.

I use my own, but I shopped for a long time before I found one I like.