All Forum Posts by: David S.

@Nicole A.

In my market, it is a little slow.  So I show as soon as I can, even if not 100% complete.  I can't lose valuable time by waiting for 100% completion.  And like Steve said, the nitpickers will show themselves.  I do find that some people get a little happy that work in being done on their potential home.  So in that case, the place being painted while they walk through is a good thing.

@Nicole A.

I run by business like @John Underwood, line for line, just like I wrote that.  However, as the unit count goes up and other obligations in life are running my time down to zero, I am leaning toward getting more help with the process.  If you feel that your personal life is running low on time and you can afford it, then why not get a little help by having a PM fill it.

Like @Steve Vaughan said, I do think that there should be a guarantee.  I know a landlord who self-managed everything but the tenant placement.  His "friend," a real estate agent would place a tenant for one month's rent.  Problem is that the "friend" was just placing warm bodies in there with no real background checks.  So every 2 or 3 months, the landlord would have evict and  pay turnover costs as well as a new tenant placement fee of one month. I told the landlord that the RE agent should guarantee one year of a tenant staying and paying.  The 2nd , 3rd, etc. tenant placement fee should not be paid, or a refund of the original amount should be due.

One way you can hedge your bets on getting a good tenant is that FINAL APPROVAL of a prospective tenant must go through you, the owner.  All reports and background checks should be made available to you before tenant placement.

I can't take credit for this great idea as it was brought up by @Levi T. He stated that you could put an ad on CL to see if any hungry real estate agents would be interested in doing part time PM work. 25 SFH in your rent range are easy to manage. I would estimate 5 to 10 hours a week at most? A salary of $20k a year equates to $55/hour if you average 7 hours a week. That would still be less than the $45k or so a PM company would charge. You might even take it a step further and solicit from multiple sources to find someone such as Indeed, contacting all of the RE agents and brokers you know, etc.

Not interested in part time?  Maybe you can pool together with other LL's and hire someone FT for more properties to justify a FT PM.

@Steve Vaughan 

It sounds like in your area, Section 8 is great to work with.  I think Erik hit the nail on the head with the quote below. My market is horrible for Section 8.  If a tenant causes damage, you are out of luck getting the tenant to fix it or pay for damages.  The Section 8 office will make the landlord fix the tenant damages or the house will be taken off the program, leaving you to evict the tenant.  Just 60 miles down the road, the Section 8 office gives the tenant 5 days to repair damages or they lose their voucher PERMANENTLY. Also, they make sure the deadbeat BF does not move in or again, they lose the voucher permanently.  There is at least a 3 year wait list to get on it, so they don't want to risk losing it, even temporarily. You can't get anyone on the phone at my local office.  Further, some of the inspectors have a jealousy or power trip factor going on, so they will find something or simply make something up.  They nearly got me on the last one.  They required that I replace a door to the outside storage. No problem-that is easy to replace a door.  Only issue it was an odd size and had to be a special order with a 5 to 6 week lead time.  I only had about 2 weeks for re-inspection. Luckily, I was being proactive and changing out these particular doors on another 2 units.  So I had both the LH and RH doors on hand.  If I didn't have those doors, my elderly tenant of 12 years would have been forced to move as there are no signs of intelligent life at that office so I am fairly certain an extension would have been out of the question.

Now, I only rent to Section 8 if I rented to that person before and if they were good tenants.  I can try to put up with the local office for them.

Good or great landlords in my area don't do Section 8 just for these reasons and more.  Section 8 here is usually Class D or worse areas.

Originally posted by @Erik W.:

It doesn't bother me to get a bunch of postcards/letters from wholesalers.   These are possible contacts of you are looking for deals.  Also, you can take the best material and use it if you decide to do your own direct mail campaign. I get every other type of junk mail so one or two more pieces is not life shattering.

In my market, getting a decent MLS deal is like winning the lotto. Real estate investing is en vogue now and EVERYONE is doing it. My banker is flipping houses. My maintenance man is flipping houses. Even my AC guy's Sunday School Teacher from his childhood is flipping houses as well as every other Jack, John, and Jill. And a lot of these folks are outbidding seasoned investors then losing their shirts because they paid too much. Personal network is the go to nowadays along with DM and wholesalers (good ones).

Sorry, you can't legally go in. If it is occupied, you shouldn't even leave the street.  Foreclosure is a very stressful process that someone is going through.

I think Sheriff's Sale's should be left to the more experienced investor. You take major risks that there are issues like foundation damage, termite damage, electrical, etc. An experienced investor will leave a little contingency money by getting the property cheaper. Even then, the risk is there to lose money if the unforeseen issue exceeds the contingency amount. Too many people get carried away with the bidding process and even go to MLS prices.

Also, then there is the title issue.  I have seen firsthand of bidders bidding on 2nd liens and homeowner association liens on properties that have a 1st mortgage and on partitions of a property. You may end up being the proud owner of a very expensive lien and no control over the property.  If you are not adept at performing a title search, you should let your title company do a title search before you bid.

I think the first thing you need to find out is what everyone else is charging.  And do the same.  I like the idea that   @Ryan Murdock  said.  If you are having trouble getting them to commit, run the credit and background after they have passed all other prescreening checks i.e. proof of income, minimum income. You would be surprised by the number of people who only make 1.5 to 2 x rent and think that they can afford your apartment. Also, you may not want to burn $35 for every tire kicker that walks through the unit, so getting the deposit shows commitment (if it is customary or law NOT to charge a background check fee).

I also like @Steve Vaughan suggestion to do all of the free checks you can.  Find out what free databases you have access to.  Some landlords luck out and have access to eviction and criminal records for free or low costs.

I have met a lot of people who don't want to pay the application fee in my area, however, it is customary for the tenant to do so.  What I have found out is that when most prospects hear "credit" check, they get scared and move on.  I make sure to let them know that I could care less about an overdue medical bill and that my focus (depending on asset class of the unit) is on past due landlords and utility bills. 

I may pay for materials upfront but not advance money.  Do you go to work and expect to get future money when you show up?  Probably not.

I stay ahead of the money, meaning if they complete 25% of the work, they would be eligible for a 20 to 25% draw.  There is a high incidence of contractors starting a bunch of jobs, then effectively disappearing.  One reason is that they may like work booked in advance for at least several weeks, but that is at your expense as they may be absent from your jobsite for a week.  Or they are thieves and take your money.  Or they have a personal problem...I heard every excuse in the book. By doing this system, if they pull a Houdini on you halfway through the job, they are replaced quickly and you are not out of money.  A lot of folks fork over their money, then they have no money to pay a new contractor when the original one doesn't show.  Then the jobsite is shut down. Possibly permanently.

Sometimes contractors gripe about this system and I just move on to the next one.  They are not taking me for a ride. 

Yes, I do know that good contractors want to protect themselves by getting advance money. However, I can provide references of my contractors and subs that I pay if the job is completed and not screwed up. Or I can provide a credit report to show that I pay.

Another point.  When a contractor does work for local, state, and federal governments, they often have to front material and labor costs.  Then they wait for their money. And wait.  And wait.. and if the entity finds issue, they may get a reduced payment.  Or they may not get paid for YEARS. Point is they don't show up and demand 50% from the governmental entity-not going to happen.

Like @Maricela Chavez and @Christine Kankowski I have a fine set up each and every time a tenant refuses a showing.  Mine is quite steep, a couple hundred dollars per refusal. I put this in my lease after running into this situation.  Some tenants expect you to lose a month's rent when they move out-it is not their money so they don't care.  When they have THEIR money involved, there is a different tune.  At some point of multiple refusals, they will owe you money upon move-out.  These clauses, of course, must not conflict with your state or local laws.

It seems that the property manager does not want any conflict hence their relaxed attitude for showings.  You may be stuck this time absent the clause and the actions of the property manager, but make sure you have the clause in the lease and a property manager who will enforce it next time.  If state law supports it, you may have access to the deposit.

What you said..."I am an investor looking to buy a 3/2 for a rental."

What the agent interpreted, "I am an investor who wants you to put in 20 hours a week putting in 100 offers at 50% of list price."

Ok, I am not saying the interpreted sentence is what you actually meant.  Here are some things you can do to get help:

1.  Find a HUNGRY agent just starting out. ----CLUE------A hungry agent will answer the phone and return phone calls/emails.  Established agents don't need to act as a buyers agent (which is a lot more work than being the listed agent) or necessarily need new clients.  Many established agents need to vet a buyer before investing their time into them.

2.  When you find a hungry agent, give them parameters to set up an automated search that updates you with new listings every day.

3. You do the work analyzing if the property is a good deal. You can't really expect an agent to analyze 20 deals each day. I have a notification of EVERY property that hits the market every day. It is a lot of work going through that. I do this because sometimes filters miss good deals. I do have separate filters for multi-family and REO's.

4.  Look for off-market deals.  Direct mail is one option.  Network with other investors in the area. Sheriff's sales. etc.

Good luck and happy investing.