All Forum Posts by: Dave G.

Agree with ZERO carpeting.

Ceramic tile installed correctly, meaning no air pockets in the thin-set upon install and cure, will outlast most everything. Porcelain tile is even more bullet-proof. Anyone that has installed tile know how much harder it is to cut porcelain tile versus other tiles. 

@Jack Budd Congrats on being financially responsible with your college expenses and pursuing a degree that the market will value vs a stupid history or English major. Speaking of your major, I would recommend Finance or Supply Chain. I am a program manager for a large aerospace company and we are constantly looking for good finance majors and always short good supply chain folks. Every business needs finance people, and almost every business has a supply chain that needs to be managed. 

In terms of your real estate investment plan, sounds pretty good to me. Do the apprenticeship and be a sponge, learn every last thing you can from your uncle. We all should be so lucky to have a close successful relative that could have mentored us at a young age. Don't rush the learning process, listen to your uncle's dos and donts. I think long term, you'll want to be a buy/hold investor. I know of no persons on the Forbes 400 list that made their billions flipping homes. Use that as your day job and accumulate rentals over time. You might want to do the BRRRR method which there is lots info described on this site.

You have not indicated what state you're in. I would highly suggest that as you graduate you consider moving to a business-friendly state that has a net in-flow of resident from a solid local economy and job growth. Do this before you get married and have kids etc since it will be hard to move later with that kind of baggage. My undergrad diploma ink was still wet when I bugged out leaving Chicago for AZ many years ago. I did it for other reasons than I list above, but am lucky that AZ has the booming job market and population in-flow driving my property values and rents at nation-leading growth rates. Choose a place like this to invest. Places not to invest are obvious, just look at the news, state financial health, tax rates and leadership. Top 3 places to avoid IMO, Califorinia, New York and Illinois. There are more but those places are cesspools. And with COVID driving a nation-wide experiment that has essentially proved the effectiveness of telecommuting / working remotely, you'll see a reduced demand in expensive and population-dense locations as many professionals will no longer be anchored to where their employer's office building is. 

Good luck in your pursuits.

The lease agreements are going define the course of action. If the new tenants have not yet signed a lease, then there is flexibility with keeping the current tenants if you desire. If there is a new lease already signed, you could talk to the new tenant to see if you can mutually agree to cancel the agreement and they look elsewhere.  

All of my properties have HOA fees. I don't know why you would want to try to tell a prospective tenant that they are responsible for the HOA fee. Why stop there, tell them they also have to pay your property taxes and owners insurance. Obviously this would not be received well, you'd probably never rent the place out, at least not to a quality tenant.

So, I don't think you're asking an HOA question, I think you're asking what you should market the property for.

For a vacant property, I market the property right at the average rent that comparable properties are getting leases for.

For an occupied property with a good tenant, I will temper rent increases to not drive the tenant to non-renew. So this may mean a slight rent increase, but pointing out to the tenant that they are below market. This often works and it's win-win as moving is disruptive and expensive for the tenant. Tenant turnover is expensive for an investor as it comes with maintenance and vacancy expenses. The only thing I hate more than vacancies is evictions. 

What do the lease agreements say for each unit? If there are no lease agreements, then you'll need to follow the laws of your state. 

You haven't provided many details, but so far this sounds messy. You better be sure the numbers work to account for no income during the eviction process and clean up after they're out.

How do you plan to make money from vacant land? I think you ought to look around a bit and compare how many people achieved wealth from vacant land versus rental property. It's not even a close call and there are reasons for that. 

Regardless of your chosen path, you need to spend a lot of time on this platform and it's podcasts researching and learning before you move an inch. 

@Mark Navarrete

A good read on evaluating a market, or searching for the optimum market, is Emerging Real Estate Markets by David Lindahl. The best I've ever read on the topic. I think he's been a guest on BP too.

We have a real estate investor in the white house. If it gets to him, it will be vetoed and need a successful 2/3 congressional vote. Not likely, but not impossible in this charged day & age I suppose. 

@Hanif Ahmad

Agree with relative points made by @Bill B.. I have considered this with my own current residence and continue to come to the conclusion that it is a rental that i do not want to own. 

In addition to points made above, where I am at in Phoenix, a $500k home could be considered something of an "executive rental" and people paying $3500/month are gonna want everything perfect all the time. I have expensive travertine flooring and granite countertops thoughout. Those things are difficult and expensive to repair when the children occupants start to take their toll (it's a 5 bedroom/3 bath home). When it's time, I'm just going to sell and move on.

Good luck in your choice.

@John Chace Yes, you have multiple problems here. You'll get better info from this site if you indicate the location of your property. There are different laws/executive orders affecting rentals that vary by location. So for me in AZ here's my responses:

The COVID restrictions are near-term only and not a major problem. After our Gov exec order expires next month, I think its back business as usual.

Having no written lease in AZ means they are on M2M and can be given 30 day notice of non-renewal. Or, give them the good old "raised rent eviction" where you raise the rent significantly and they just move out on their own because they don't want to pay that increase. 

Going forward of course, you'll want a solid lease. And it should define specifics on parking rights, use of common areas (smoking), storage space and access rules, etc. All my properties are specifically identified as non-smoking inside the unit too. For a multi-unit property, I would prohibit smoking (unless unlawful) anywhere on the property including outside. Make the tenants go to the public sidewalk or street where they won't bother other tenants, inside or out. 

Good luck.