All Forum Posts by: David Lee Hall, III

Such an open ended question:

1) learn how to run comps

2) learn how to estimate repairs

3) learn how to estimate market rents

4) learn the styles different investors use to buy (such as 70% rule, 1% rule, etc.)

Once you have these 4 down you can determine what prices are investor friendly.

Next, you need to sell the home. Learn to use public records and look at nearby records for non owner occupied properties. Take those owners and contact them. You can also use Facebook groups for the area, Craigslist, or BP marketplace.

You can shortcut many of these steps using software tools. But you may also be relying on them as opposed to actually knowing your business. The tools should be used to raise your game not be your game. 

Lots of the tools out there from Realeflow to Propstream to List Source have the ability to pull cash buyers of properties. You then market to them the same as sellers. 

#1 can just be a savings account- don’t do something silly like a brokerage, that is gambling and you can lose the money

#2 I self manage my units and have a few I manage for friends. For mine I have a reserve savings I put money into. For my friends, I keep the managing fee and any expenses and return the rest to them. I advise them to set aside some for turnover, repairs, vacancy, and capex, but we are all adults here and I am not babysitting them. I do not hold repair funds for them. I will them what is needed/deduct from rent. This is the same thing the private firm I eventually fired as my PM did with me, so I took on that practice. You may want to keep a small deposit of $250 or so and an automatic approval waiver for repairs under that amount so you aren’t spending your own cash on lots of minor repairs when starting out, but in the end you will just take it back from the rent roll the next month.

 Actually this depends on location. For example, Butler and Westmoreland counties here in western PA do not have this information. (The counties just north and just east of Pittsburgh.)

I might argue those counties do predate civilization but then there would be no excuse for Fayette County (locally known as Fayette-nam as in Vietnam) which actually does have sqft records.

Or then you get Beaver County that hasn’t done An assessment since 1983 and half the data is just wrong. 

🤷‍♂️

Google Earth has a ruler tool. I use it all the time to measure building dimensions. 

So I just fired my PM last year, so went through this with a few tenants:

- Tenant contact information - 6) Do I need each occupant's contact information or does the primary applicant's phone number and email address suffice?

Every person aged 18 or older should have their contact information and government issued ID collected. 

- Proof of tenant’s renters’ insurance coverage

Yes. Make sure it is current.

- (PMC said they cannot provide the tenant application as mentioned above) Copies of the tenant’s application, lease, all signed addendums, and any renewals.

You should have a copy of the lease from when they moved in an signed it (at least I already did). I didn't care though since I was going to be self managing. I had them complete a new lease with me and all of the associated intake documents just as if it was a brand new relationship.

Property inspection reports along with corresponding photos

I did a new one in conjunction with the new lease

Maintenance records for the last 6 to 12 months

You should already have this. At least my PM, while authorized for any repair under $250 would always send me said repairs for accounting purposes. 

Tenant financial ledgers and financial reports
Owner financial ledgers and financial reports

Again, my PM had provided these over time and I could pull it whenever I needed from my portal. There wasn't a need to request it. It sounds like you did not have an owner portal for your PM company. This could mean that they do not have the basics such as this covered and you may be starting from scratch.

HOA forms and agreements

As the owner I would have expected you to sign any HOA documents not the PM. 

Copies of all property keys or door codes

I would recommend changing the locks just as you would with a new tenant coming in. You don't know if the PM had their own copies of keys would could be a liability. 

Simple future solution: flip the shelves every tenant. That way the weight will keep them from bowing over time. 

You aren't required to fix something like that (as least not in PA) but it is also a fairly cheap fix if you think you want to keep the tenants a long time. Of course I am assuming these are your typical adjustable shelves on entry level cabinets that you can remove. A single sheet of 3/4" plywood and a skill saw could replace any severally damaged ones in an hour. 

If they are not the type you can adjust/take-out, then it likely is a lack of face framing combined with humidity and weight over the years. You may be able to straighten them with some clamps and straight end and attach some 1x2" fame framing for support. 

Even a cheaper option would be to take that plywood and simply sit it on top of the existing shelving to provide a flat surface. 

"Sliding" can also be taken care of with some rubberish linears - something you can get for a few bucks at Wally World and can install with a pair of scissors in <15 minutes. 

I guess the real question is how bad is it? If they are reporting it within the normal move-in period, I would try to accommodate them, but wouldn't go overboard. 

So, being conservative, a "typical" investor is going to buy 70% ARV minus repairs. So $125k -> $87.5 minus repairs = $57.5.

I assume you have it under contract less than this amount. 

Make a flyer for the property w/ a couple pictures, your comps, asking price, etc. - bring it to REIA next Tuesday at the Greater Mason Temple 6-9PM. You will meet tons of investors and probably can get a good lead on a buyer. Brian Snyder runs it and he will partner with folks if you need help finding a buyer.

When I was using Tellus for all of my screening I would send a quick thank you but the unit has been filled. Easy enough with copy and paste and I could hit 100 people in 10 minutes. If it wasn’t for the ease no way I would have responded to them all.

I don’t remember what happened to Dr Kevorkian. 😀

It is a slippery slope. Contract law predates the existence of the USA. It can be argued that state by state rules for marketing property is from a wonderful job of lobbying by NAR which has a vested interest in keeping that monopoly.

There likely is some case law in certain states regarding this - hence Jon and Steph’s recommendation.

There also would need to be a complaint and a question of does a DA want to go after one guy - there would probably need to be a bigger picture motive.

Not a lawyer here, but I have had lawyer’s review my buy contract and they never had issues with the right to market clause (and one of the lawyers is a broker too).