All Forum Posts by: Eric Schultz

Jared Smith It depends. Where is the property located? Is it in an A/B area or a C/D area? Carpet “islands” in the bedrooms are fairly manageable if the rest of the square footage is hard floor or vinyl. If it is normal to have carpet in bedrooms in your market (i.e. cold weather climates) than you might consider doing it.

Brandon Arnett Anything that takes cashflow out of your pocket as an investor is annoying: vacancy, maintenance & repair calls, cap ex, tenant turnover costs, tax & insurance increases, evictions, etc. What you might consider as “headaches” would be extended vacancy, inherited tenants, excessive maintenance calls, late rent, mold, pest inhabitation, insurance claims, tenant turnover process, eviction process, non-responsive property managers, and the list can go on. You can get ahead of most of these issues by buying properties in B- or better areas, having a thorough inspection done, doing a strategic rehab prior to placing a tenant, selecting proper insurance coverage, hiring the right property manager, and then staying in regular communication with that property manager.

I forgot to mention that the tenant should be responsible for changing furnace filters per the lease agreement on a single family property. This is typical of the Indy market.

Great breakdown! Yes, the tenant should be responsible for snow removal, landscape maintenance, replacing light bulbs & replacing batteries in smoke detectors per the lease agreement on a single family property. Paint, flooring, plumbing and kitchen appliances are probably the most unpredictable on the list. These items all depend on the tenant’s habits/behavior and how long they live in the property.

Dominique Mickles Even with a conventional loan you do not need to source the cash from a checking or savings account. It can come from a brokerage account or even a loan from a whole life insurance policy with cash value. You just need to provide statements demonstrating the funds have “seasoned” in the account for 60 days or more.

Wiey Underwood If you are just looking to get your money working for you while you save up more, self-educate and practice analyzing deals than you may want to consider investing in notes. Something like AHP Servicing will pay 10% preferred return. There are many more note funds out there that are paying 8% - 10% return right now.

The best thing to do is get a quote over the phone by providing basic info on the property: address, year built, square footage, beds/baths, # of levels, basement/crawl space/slab on grade, cosmetic finishes, etc The good news is Michigan’s geographic location is one of the very few states with low potential for natural disasters, winters aside. This should help on insurance costs. Make sure to get coverage for loss of rental income, 12 - 18 months minimum. If the tenants burn the place down you want to make sure you can cover the PITI and other misc expenses while the property is being repaired / rebuilt.

Jen Pothilat You may be aware of this, but simply listing the property addresses in the trust document does not avoid state probate with the listed assets. You need to “fund the trust” by transferring the title from your name to the trust’s name. The same goes for brokerage accounts, savings accounts, etc. You can do a title transfer with a title company that is local to each property. There are fees associated with a title transfer, but the attorney would be charging you these same transfer fees plus their hourly rate on the time involved. That appears to be the case with the attorney’s fee that you mentioned. Also, a revocable (living) trust and an LLC are two very different things when it comes to asset protection. The living trust protects your assets from the state’s probate process and predetermines who will take ownership / control of the assets upon death. You and your trust are considered the same entity in the event of a lawsuit involving any of the named assets in the trust. Creditors can access your assets in this type of trust. There are more advanced strategies of using combinations of irrevocable living trusts, land trusts and LLCs for true asset protection. Definitely consult with an attorney in this space to learn what makes sense for your situation as the upfront costs to set things up adds up quickly.

That deal sounds more like a liability than an asset.

Jonathan Schwartz Between your list and everyone’s responses so far, you have enough data to crunch. Just remember that your “boots on the ground” team is the critical piece to your investing success out-of-state.