All Forum Posts by: Ericka G.

Thanks @Kristina Heimstaedt and @Dylan Vargas for your input...I'm going to give this another couple of months and see how things look with our monthly cashflow.  We do have a really solid team so it isn't a terrible burden to hold these a bit longer.  I'll keep you posted.

Also, just FYI I accidentally posted this twice so there is another thread on the same topic - may delete this one to avoid confusion if I can figure out how to do that

Thanks for the varied input, gives me a lot to think about... Todd Dexheimer definitely see some capital expenditures coming. One property in particular will likely need a new roof and boiler in the next few years. HVAC and everything else is in good shape on these - roofs are what scare me Steve Vaughan Tax point is a good reminder and something I always forget about, will think about staggering the sales (if/when we sell) to avoid a big hit there - definitely planning to roll the $ into another, bigger property, though, so that will help too Josh Calcanis I'm definitely finding managing local properties easier though our team OOS is WAY better than the folks we work with locally. The ones OOS are all SFHs and I see at least one of them needing a roof in the next few years. We had a great thing going but now I'm concerned that increased competition in our niche will limit our ability to raise rents. We'll see

Jd Martin good point about inflation - I like the idea of year 2000 dollars yielding year 2017 rewards...will give this some more thought. Also - apologies for the double post! Did this from my phone and didn't think it went through the first time

For those who buy and hold - how do you decide when to fold (sell)? Here's the situation: Bought several OOS properties starting 2.5 years ago. We "chose" this location because my husband was assigned there for work and we realized there were many other commuters like him needing housing and luckily nice housing was dirt cheap there at that time. Our accidental niche has yielded financial freedom, class A tenants in class B/C areas, and great cash flow of ~ $1k per house after expenses (score!). we consistently have had a waiting list to get into our properties. We also have built an awesome team that makes self managing long distance manageable. Unfortunately, several others have recently discovered our niche - increasing competition, driving down prices, and shrinking cash flow (we're looking at $400-600 per house after expenses for Oct - our worst month ever). In the meantime, these are 1960s ranch houses that have increased ~ 60% in value since purchase BUT I'm expecting that we'll start having to replace roofs and furnaces in the next couple of years, cutting further into profits. The question: hold or fold? I'm considering folding b/c my husband has an ATL base starting in Nov so he no longer needs to commute to this location for work; AND it seems that our sweet spot niche is souring with a lot of cheaper competition... We did make one house a traditional rental with solid margins but the tenant quality isn't as good versus our niche and it has been a headache. I'm wondering if we should sell the 4 OOS houses in 2018 before capital expenditures start to hit and then roll the profits into a small apartment complex where we live. We have 4 units here and Ive found self managing locally much easier. On the flip side, we're still doing pretty well and it's likely that these houses will appreciate further as they are still well below the highs seen at the last peak. Is there a rule of thumb for how long to hold properties? Would you hold or fold?

For those who buy and hold - how do you decide when to fold (sell)? Here's the situation: Bought several OOS properties starting 2.5 years ago. We "chose" this location because my husband was assigned there for work and we realized there were many other commuters like him needing housing and luckily nice housing was dirt cheap there at that time. Our accidental niche has yielded financial freedom, class A tenants in class B/C areas, and great cash flow of ~ $1k per house after expenses (score!). we consistently have had a waiting list to get into our properties. We also have built an awesome team that makes self managing long distance manageable. Unfortunately, several others have recently discovered our niche - increasing competition, driving down prices, and shrinking cash flow (we're looking at $400-600 per house after expenses for Oct - our worst month ever). In the meantime, these are 1960s ranch houses that have increased ~ 60% in value since purchase BUT I'm expecting that we'll start having to replace roofs and furnaces in the next couple of years, cutting further into profits. The question: hold or fold? I'm considering folding b/c my husband has an ATL base starting in Nov so he no longer needs to commute to this location for work; AND it seems that our sweet spot niche is souring with a lot of cheaper competition... We did make one house a traditional rental with solid margins but the tenant quality isn't as good versus our niche and it has been a headache. I'm wondering if we should sell the 4 OOS houses in 2018 before capital expenditures start to hit and then roll the profits into a small apartment complex where we live. We have 4 units here and Ive found self managing locally much easier. On the flip side, we're still doing pretty well and it's likely that these houses will appreciate further as they are still well below the highs seen at the last peak. Is there a rule of thumb for how long to hold properties? Would you hold or fold?

Christian Nachtrieb I posted my ad on Zillow rental manager without a realtor or access to MLS. I initially set it up on my laptop and then downloaded the app so I could communicate with prospective tenants on the go. Zillow feeds the listing to other sites like Trulia and you as the owner have the ability to edit it. If your listing is on MLS your unit is probably already showing up on these sites, so perhaps that tip won't help as much in your case. My main point was that I've kind of given up on Craigslist as a good source of tenants...but it sounds like you've covered your bases on sites so it may be a price issue or perhaps time of year like other posters suggested

Christian Nachtrieb have you tried listing on Zillow rental manager? I just rented out one of my units that had been on Craigslist for a 2-3 weeks yielding a slow flow of lackluster candidates and as soon as I posted on Zillow rental manager I had a flood of excellent prospects and rented it to a great tenant within the week. He paid and moved in the day he saw the unit - head and shoulders above the folks who applied from CL. It's a free app so it might be worth a look?

Fatema Sobh thanks for sharing - I love your story! I think I saw you a couple of years ago on periscope sharing your real estate wisdom ;) glad to hear that you've continued to find deals. I also invest in the Detroit suburbs and would be curious if you could share your avg target price point, rent amount, and financing methods? Are you doing BRRRR or another approach?

I think it is impossible to time the market. The best bet is to have a well informed rule of thumb for a qualifying "deal" and stick to that. If you find properties now that meet your deal criteria, that's a win. If the market softens, you should have more and bigger wins. During the last downturn there wasn't a lot of competition because it was VERY difficult to get financing and everyone was uncertain about job stability and where the bottom really was. I remember my husband saying in 2011-2013: "we're a LONG way from bottom." Lol. Darn. In the midst of it no one has any idea what is going on. That said, even if we missed "bottom" slightly we still found some great deals (8 units) that cash flow well and have appreciated nicely. These down cycles rarely hit the same asset class in the same way, so I don't think we should assume that the next big crash will be in real estate...anyone know a good psychic?

Caroline M. For Detroit metro, try Maid 2 Clean romulus. I love them - female owned business and very reliable. They clean 3 of our furnished units monthly and do a great job. They are based in the downriver burbs but may be able to help you out depending on where your properties are located. Feel free to PM with any questions. Tell them that Ericka sent you ;)