All Forum Posts by: David Moore

@Alex Gadbois

I have a couple thoughts on this. First, way to go to have a reserve and recognize your need for it. I've had a very tough time finding anything good on MLS as well. I have a good real estate (investor) agent, and he occasionally has very good deals. About a year ago, I followed the Buffet rule and decided to market to owners of multifamily properties only. I had four rentals at the time, and some equity built, and the marketing got me two leads, one of which we closed on in February. I am starting the marketing again, this time looking for between a 4 and 12 unit building.

I want to market where others are not marketing.  How many letters do you think owners of a $1 million dollar building get from investors?  Not a lot.  And yet, nearly every deal I've seen in my market where a building goes for $1 million, goes for no money down.  It is entirely seller financed.  

We are marketing in the 400K to 800K range, and I've got about 25K in the bank as well.  If the deal is good enough, it will fund itself.  

I'm totally on board with @Natalia Collins on this.  In your lease, make sure it says you maintain systems that your state requires.  All others system are non-essential.  I don't repair washers and dryers, because my lease says they are there for tenant convenience. Same for dishwashers.  I would advise against supplying a tenant with anything other than basic services.  If they want a microwave, they bring one in themselves. The less stuff there is, the less there is to break, the less calls you get. 

If the tenant pays on  time, doesn't give me grief, and has been a long term tenant that treats the property well, you think I'll fix that washer and dryer, or help them with other non-essentials?  You bet I will.  

I also train the tenant.  Make them part of the solution.  We had a call a week ago that a tenant reported a sewer pipe leaking.  Hard to call an expensive plumber on that, since the prior tenant who just moved out, reported nothing.  We had the tenant do tests of all water systems, and found the problem is with the toilet, probably not seated right.  My handyman will fix it for $25 bucks.  The tenant learned we will make them part of the solution, to build their confidence, but also to train them when and when not to call us about stuff. 

Plumber, and only because they are good - Weld and Sons Plumbing....very solid work, reliable, punctual.  

Electrical - Stafford Home Services.  Price and work were excellent.

@Stone Teran

It's not really about needing cheap labor.  It's really about taking a risk to help someone.  Let's also be careful not to stereotype homeless people as drug addicts, alcoholics, etc, even though some may be in that situation.  There are lawyers, doctors and other professionals who are drug addicts and alcoholics as well.  

@Thomas S.

I certainly sympathize with your position.  Who among us hasn't been had by someone holding a sign, or asking for a handout.  I don't rely on licensed contractors to mow lawns, paint, change out door knobs, clean an apartment for obvious reasons.   And yet, that kind of work takes me a ton of time.  In Toronto, the story may be different.  Here is a guy with skills, who needs a break, and I applaud anyone who takes a risk and gives him an opportunity.    It takes risk to invest in our fellow man.  The important thing to remember is 'I could be that guy'.  And Greg, I don't think it is accurate to say the reason they need help is why you cannot help them.  We can help them.   

@Michael Delpier

I'm in the same boat as @Stephanie Medellin.  We make our rental houses in top shape, put money into them early to make properties desirable and easy to rent, and easy to maintain.  Meanwhile, my own house has badly outdated kitchen, gutter damage, paint needed.  Yep, same story.

I struggled with where to put this, and when I started in market place, it just seemed like the right place.  I own several properties, but I am visiting from our of state.  I was at Riverside Park in Tulsa today when I met a quite nice homeless man named Bill.  What surprised me was that Bill is quite skilled in the type of handyman traits I'm always on the hunt for in the Twin Cities.  Bill explained in detail he knows how to lay linoleum, paint, and do general repairs, the pain in the butt stuff that I always have to handle myself (like repairing screens, replacing door knobs, changing out faucets, cleaning an apartment).  

If you have an apartment or two, or property that needs these type of repairs, Tulsa OK pals, will you consider giving Bill a chance?  You can IM me with any inquiries.  I have his phone number and can send along that to you, with great news at what someone of his skill level is willing to take for compensation.  

Hearing his story, and I'm all sure we've heard stories, is one of a guy who has had some tough breaks, but wants to work, and he has some good skills.  Please consider giving the guy a chance.

On the block where I own my four unit, one owner charges $500.00 below market, because he wants to keep the same tenants.  Right next door, a new investor bought the building, and filled the place charging rents $400.00 higher, with a sign on his building stating the rents.  The book value of the four plex charging market rents increased $160K over the other building, on that difference alone, due to cap add.  

I think your understanding of why the low rent comp is not a good comparison makes sense.  I'd exclude that one from my comps.

I raised rents on the four unit we acquired in February by $140.00 per unit due to sky high water bills and rents so far below market.  The existing rents are still in the lowest quintile for a 2 mile radius.  I'll raise rents another 100 next April.  In your market, rents at $1200.00 means you left a lot of money on the table, only going to $850.00.  Rents in a two mile radius of my property have a mean of $1050, with a range of $850.00 to $1200.00.  I am aiming for the mean.  Next April, I'm raising rents another $100.00.  A factor for me is not how the tenants feel about it.  It is the risk/reward of retaining the tenants I have.  When I raise rents, I send a letter explaining where my rents lie in relation to that 2 mile radius, so they are informed that they won't find a better deal.

My advice.  Next April, hike those rents toward that mean.  You will have the needed funds to maintain your building well, which is great for retention.  And making money off an investment is a good thing.

@Carl Petterson

I put terms in my lease (well, my lawyer did) that states the tenant is responsible to keep the unit in proper repair.  I think it was good, though, she called you.  I think she tried to fix it herself, and messed it up.  I've installed a good number of toilets...it is a good skill to learn, and not too tough.  Handymen are not always available.  Put it in your lease that tenant is responsible to maintain the provided equipment, so she doesn't call you every time the toilet gets clogged.

To me, paying the bill of $200.00 is inconsequential, regardless of the expense of the plumber.  Because it saved you time, well done sir!  That is something most of us truly struggle with.  The tenants I have that cost me more in maintenance...I make sure they know they are my source of funds to pay for these repairs, and their rents will be affected.  

One more thing.  I don't sign two year leases.  After 12 months, it is month to month.  That means with at least a 30 day notice, per MN laws, you can raise rent in any given month.