All Forum Posts by: Bruce Lynn

Some won't be as good as you, they won't be as detailed, they don't read into it as much as you.   However they are more time efficient than you.   So do you value your time more or your expertise more?  Sounds like in your situation you have more money than time.   Leverage that.

http://www.IncreaseLeverage.com

@Michael Lucero   that's probably enough experience at the price point you want to buy.  You want deals where some repairs don't matter as much.  I think most of the times inspectors are for properties where you are paying top dollar....that's where it makes a difference.   I don't know what you have to pay in CA for tax properties....if you have to pay close to market or not.   I'm hoping you can get significant discounts.

@Patsy Waldron   What I meant was they are not collecting any fee from you now for the work they are doing?  They're not collecting a fee on a vacant unit or do you have a clause like this:

Service Fees: Each time Broker arranges for the Property to be repaired, maintained, redecorated, or

altered as permitted by this agreement, Owner will pay Broker a service fee equal to: (Check one box

only.)

(1) % of the total cost of each repair, maintenance, alteration, or redecoration.

(2)The service fees under this Paragraph 12E are earned at the time the repair, maintenance, redecoration, or alteration is made and are payable upon Owner's receipt of Broker's invoice

If they are making money off the repair or each time they are meeting someone there to give estimates, then yes I would expect them to work harder and faster.  If they don't have a clause like that and they're doing that work for free, then you're getting more than you paid for.

I personally think if you want them to do all this work as part of the leasing fee, you're expectations are too high, but that is where we may differ.   You just have to refer back to property management agreement to see what it says.

@Jose Lira If you're taking cash for assignments you might not need SSN but you will need some kind of tax ID.  You want to report it and pay taxes on it.

@William Hochstedler   Now you make it even more complicated by throwing in the lien situation.  I'm thinking the liens might not get wiped out if the original owner is still part owner.  This is just going to mess things up for lots of people....and maybe the taxing entities too.

If you don't need the money, I think you are right.

1031 is probably a fantastic idea.....that means a qualified intermediary holds the money...and you take that money and turn it into more or different property.

Rent in CA is often low in my opinion.

Here in TX for example I would expect probably $8000/month or so on $850,000 on good quality properties.

Appreciation is good here now, but that probably will not always be the case.

If you manage yourself, look at the lease.  See the notification period.  Typically 30-60 days.  

Here's kind of the flip side of your request.   Just something to think about.....not saying you are right or wrong or your property manager is right or wrong....just flip side of the request.   So read with an open mind...  In some sense you're asking them to be your general contractor, not a property manager...and in some sense you're asking them to do this work for free.   I'm thinking you haven't paid them anything for the vacant unit, but asking them do do work.  To me I'm thinking this is not make ready work or get it rent ready work....replacing the panel is renovation work.  Maybe you've contracted for that....I don't know.   Maybe they have called and called and called the contractor to come out....maybe it took 2-3 weeks for the contractor to come out and give you a FREE estimate you don't like.  Maybe they have been out 2-3 times to meet contractors who did not show up..again for FREE.  You might be lucky they're not charging you trip charges.

At first I thought....around here it is pretty standard to charge 10% property management fee and 1 month's rent to get it leased....so $75/door is 15%...but then I'm thinking $50/month to take all the calls, collect rent, pay for software, pay for licenses, pay taxes, pay for bank accounts, checks, and everything else they pay for...with high expectations from the owners....that's not much take home for the headaches...so now I know why they charge a minimum of $75/door....and that's probably not enough.

Maybe you can change property mangers, but I don't know that you get satisfaction from the next one either.  I've never met raving fans of property managers.  If anything no one seems to like their property manager.  I think that is just part of the business.

I'm thinking if you want things like panel changeout.....call the contractors yourself....line them up at 10-11-12 and meet them out there yourself....get the bids and choose one.  Don't depend on your property manager to do stuff like this for you.  Let them do the simple stuff, paint, carpet, rekey.  Anything more than that, do yourself.   I'd also say I've never met anyone who is happy with the repair costs the property manager charges for repairs.  That's just part of the game.   You can replace toilet flappers for a $3 part and 10 minutes of time, but you have the property manager do it, it's $75-$100, but that's the tradeoff.  You don't have to drive an hour away or take the call at 8pm or deal with whatever inconvenience it causes.

As far as I've heard foreigners cannot buy land, homes, condos, etc in Burma.  Foreigners can lease, probably with a lot of restrictions.  At some point they were working on condo law for foreigners.  I can imagine it might look like Thailand condo law, where foreigners can purchase up to 49% of the condos in a building.

My first thought is there is a lot of risk.....lots of things changing.   Probably 100 other places with much less risk to buy.

Buy what you know.  That's the Warren Buffet way to get rich.  Speculating is a great way to loose money in real estate and other investments.  Be wary of people who think they can get around the law.  Sometimes it works, but often times it doesnt.  People have lost investments in Mexico and Thailand and probably other places too.  Sometimes it is tolerated until the next government power comes in, and they decide to enforce to the letter of the law.   To me forming a company to own land, giving a citizen 51% of the company to be legal, but foreigner voting control or some other way to skirt the law is in fact skirting the law.   So you might be able to set things up or someone convinces you they know a way around the law...but you can have everything confiscated after the next election.   Occasionally some of these types of governments even want prison time and fines for trying to skirt the law, not just land confiscation.

This doesn't make sense, but then sometimes government thinking doesn't make sense way too often.  So chances are I would not want to bid down in most cases.   Do you really want to become an undivided joint owner with someone who did not pay taxes?   What happens next year?  County auctions off the 5% you didn't buy to someone who pays 95% and now has undivided 95% ownership of 5% that you didn't get last year?   This is a good way to create a nightmare.

In some very unique situations I suppose you could speak to an attorney and see how you could partition off what you bought or force a sale.  You have to see what attorney fees would cost you and time and risk involved.  In probably too many cases, would be easier and less money to just buy the whole thing and not bid it down.

1.  You're thinking all the homes are vacant and it is safe walking around?

2.  Personally I like occupied vs vacant.....better chance it is livable...

3.  I look at roof...how old...how does it compare to neighbors...will it last or will it need to be replaced.

4.  Windows...broken or not, replaced or not, any alignment issues (foundation), do they lock?, can I keep them or will they need to be replaced.  Again also looking at neighbors.

5.  Electric meter....is it there, what's electric look like...new panel or old....is the power connected from utility pole?

6.  Paint...will I need to paint and if so how much?  Trim only?  Entire wood house?  How much prep is needed?  Any rotted wood that needs to be replaced?  Any squirrel or rat damage?

7.  What's the neighborhood look like?  Is this house better or worse?  Are the neighbors happy you bought it and will fix it up?  or do they see it as a chance to get new appliances and an outside HVAC unit at your expense?   You can fix the house, but you can't fix the neighborhood.

8.  How old or new is HVAC unit?  Is there HVAC and window units.  That can indicate it's not working.

9.  Depending on the age of homes...or location...what kind of sewer...city or septic....if super old..have they replaced sewer lines to the street?  Have the neighbors done it?

10.  Who lives there?  Owner or tenants?

11.  Occasionally you can talk to owners, tenants, or neighbors.  Neighbors usually tell you the most.

12.  If you can get behind the house, like in the alley if it has one that is good too.  Sometimes the front looks great, and the back of the house is gone.

This probably sounds mean, but I'm thinking if you think you need an inspector to go with you, you shouldn't be buying.  You don't know the risk.  You don't know the repairs.  You don't know the costs.  I'd be surprised if one goes with you for 1/2 day or day for price of lunch.  You might flip it....ask if you can assist him for a day or every day for a week and you buy lunch.  Then you see what they're looking for....and perhaps the differences in all these things..new roof vs old vs one that needs replacement...so you know what to look for.  You can get a sample report, maybe they will help you guess at cost of repairs.

Be a Buffet.....buy what you know.....or be the best value investor out there to buy cheap enough to fix what you don't know.....price in risk....too many investors don't.

If you find a checklist somewhere, please let me know.  If not maybe we can create one.