All Forum Posts by: Daniel Z Fang

@Jim Cummings It's an impossible question. As an analogy, sometimes people ask me whether I would go through medical training again if I knew then what I know now. I am a different person now than I was then and the current me has the privilege of knowing what I know now only because I went through the training. The obstacle is the way. There's no one path to getting education in REI but I wouldn't know what I know now if it weren't for owning Turnkeys so for that I'm grateful. There's only one path and it's forward.

@Caroline C. Thank you

@Jay Hinrichs Thank you. Very good points

@Will Fraser Thank you, I appreciate the insight

Hello bp community,

After closing on a SFH turnkey property with a well-known provider in Memphis, my tenants stayed for a full 2 years. I collected about $300 / month in cashflow with relatively few repairs/maintenance issues. At the end of the 2 years, they are now moving out with plans to purchase a property of their own. During turnover, the turnkey provider quoted me a repair cost of $3100, including a 15% markup. There were pictures included and everything looked to be cosmetic. To offset the $3100, we were able to collect about $700 from the security deposit. That leaves me with a bill of $2400 which is 33% of my cash flow for the past 2 years. Obviously this doesn't include principal paydown or appreciation. Is this a fairly common scenario? Turnover cost breakdown below. Some of the prices seem ridiculous (e.g. $100 to program two garage doors? That's a $20s from Amazon).

I started with turnkey to get into REI, but now with a little more experience under my belt, I'm considering selling my turnkeys at a loss and moving on to something with more meat on the bones.

Exterior - $225
- pressure wash
- remove damaged/torn window screens
- remove all stickers from all windows
- repair hole in soffit to the right of chimney
Main Interior - $825
- repair/replace damaged sheetrock
- wipe down and clean all walls throughout house
- wipe down and clean all doors, trim and baseboards and throughout house
- touch up paint on walls
- touch up paint on trim and doors
- replace missing/broken blinds
- replace missing/broken doorknobs
- replace missing/broken light switch and outlet covers
- replace missing/broken light bulbs
- make sure all doors open/shut properly
- make sure all windows open/close properly
- replace air filter
- replace batteries in the smoke detectors
- remove all trash from attic
- clean and paint all bars and shelves in closets
- clean all AC vents and return vents
- make sure all drawers and cabinets open and close properly
- make sure to clean out all drawers and cabinets
Living Room - $10
- clean and paint fireplace with black high heat paint
Kitchen - $55
- wipe down and clean all cabinets, inside and out
- touch up paint on cabinets
- paint under sink
- tighten loose cabinet hardware
- caulk sink, floor, counter
- replace broken trim on ends of countertops
Laundry Room - $10
- clean and paint inside washer box
- clean out dryer vent
Half Bathroom - $25
- wipe down and clean all cabinets, inside and out
- touch up paint on cabinets
- paint under sink
- tighten loose cabinet hardware
- caulk toilet, sink, tub, floor
- tighten door handle
Master Bathroom - $75
- paint cabinets inside and out
- tighten loose cabinet hardware
- caulk toilet, sink, tub, floor
- fill in missing grout in shower
Hall Bathroom - $35
- wipe down and clean all cabinets, inside and out
- touch up paint on cabinets
- paint under sink
- tighten loose cabinet hardware
- caulk toilet, sink, tub, floor
Stairs - $20
- paint handrail
- paint banaster
Garage - $25
- pressure wash garage floor
Locks - $300
Yard - $175
- cut, edge, weedeat
- trim bushes
- trim up trees
- clean up fencelines
- haul off all trash
- Remove grass from cracks in concrete
- remove all loose limbs and debris
- clean out flower beds
Flooring - $275
- clean all carpets
Carpet Cleaning Estimate: $275
Garage - $100
Program two new garage door remotes
Pest Control - $85
- pest control needed: General pest spray
Trash - $350
- remove trash at the curb
Cleaning - $120

Hello bp community,

I recently had a property appraised by a lender and the property appraised slightly under purchase price. I disagreed with the appraisal due to the particular comps that were picked and offered different comps to the lender. The lender considered but ultimately decided that the appraisal value would stand. We wanted the property anyway so I brought extra cash to close. After close, I received notice that the appraisal was revised with the "cost by value approach" section adjusted significantly with depreciation decreased such that the overall value of the home increased significantly above the original appraisal price. Despite this change, the final appraisal value remained the same. Why was there a need to addend the appraisal to modify the cost by value approach and do I have any recourse at this point to argue against the original appraisal value? It's likely water under the bridge, but I've never seen an appraisal changed after close. Thank you!

Hello Bp community,

Do you have any general investment principles for determining how much leverage is enough leverage? I'm pushing up against my max DTI and with tighter lending restrictions, lenders will be a little nervous if I continue to buy properties. It has made me wonder whether I ought to pay off (or pay down or recast) some of my properties. I'm aware there are multiple strategies to get more cash if needed but also aware there are risks to being over-leveraged. Curious to hear your thoughts, thanks!

@Trey Rittenhouse

Learn learn learn! Don’t jump to shelling out money early on no matter what folks promise you. Education is literally free and will save you thousands down the road. Be patient with others and with yourself. These concepts take time. Thankfully you’ve got time. Good for you for starting early.

@Binod Gupta

Time is money so if you have a demanding job, REITs are probably the best way to add some real estate exposure to your portfolio while working a full time (or more than full time) job. If you want to add individual homes, try finding a reputable turnkey company and reading a few books on analyzing properties so you're not taken advantage of. Otherwise, most other strategies will take time and investment on your part. Unless you're planning to quit your job, work significantly at REI on the margins, or partner with someone who can do the groundwork, you're probably not going to be wholesaling or driving for dollars or flipping or any number of great strategies to add value and generate revenue.

@Minka Sha

I lived in San Diego for almost 10 years and you’d be a fool to sell something in that location unless you needed the cash flow. This is an appreciation play. If you can handle the neg cash flow I’d hold for as long as possible. Back in the 80s, Del Mar was the old PB with two bedrooms renting for $400/mo. Now you can barely find a single family home for less than 2 mil. There’s only so much California coastline.