All Forum Posts by: Fred Cannon

@Shawn Marschke. It may be hard to get lending using an LLC. I have partners and we use a conventional mortgage company. Also rates and terms tend to be better with a conventional lender than a private lender. Not sure you need an LLC until you reach a high number of rentals. You can get an umbrella policy with your insurance that gives all the protection you need. I would invest in a good CPA and a good insurance agent first, find a good mortgage broker that will help you secure the loan and for me I want to put down at least 30% to insure the best terms and the Best Buy. The deal you get on the buy will determine the return you get on the property.

@Shedrick Boyd Shedrick I am an investor in Condo's as well as SFH. I love my condo rentals because they are easily maintained and bring a good ROI. I also rent short term but within the guidelines of the HOA. I market my short term to professional travelers, mainly in the medical field. There is a growing number of nurses, therapist, etc, that are filling positions all around the country, fulfilling a desire to travel, and making a lot of money at the same time. I usually lease for 90 or more days, I have never had an issue with rent collection, or with vacancy since I began to converting to this model. I only buy one bedroom condo's in exceptionally nice areas. When I buy I completely remodel, mainly tile flooring, upgrade bath and kitchen countertops and appliances. Must have for travelers is washer/dryer in unit. I would encourage you to start with a one bedroom in a good location. Find a website to advertise that caters to professional travelers, I don't do VRBO or AB&B because I want longer than a few days and I don't want to clean all the time. My places are not for vacationers. I expect Denver would be a great area to use this model.

@Sheena Drake. Better check the covenants. I believe they don't allow rentals until after a certain amount of time of ownership. Also they have a set minimum for lease duration so AIrB&B may not go on there. I live nearby and look at a one bedroom a couple years back and moved on after reading the covenants It's a great area but be sure you read the rules and regs over a few times regardless of what HOA you buy into.

@John Ringgold I charge a $200 cleaning fee upfront in addition to the deposit. My deposit is $200 less than the monthly rent This way I don't get stuck with a dirty condo and don't have to ding for a half cleaned place on move out. Before I started doing this I always found uncleaned spaces that were not noticed upon inspection. Now it's no worry. They move out and I get cleaning service in next day. Saves me a lot of hassle. I only have one bedroom condo's so it's very simple. A lot of times I just do the cleaning myself if I have the time. Just takes 2-3 hours at most.

@Scott Goulet if your PM is making more than you then you are working for them. You should listen to your wife and manage your own Propertirs. Doesn't mean you have to do the work just that you need a team of people to fix problems. I manage six properties myself that are a 6 hour drive. I hardly ever need to go onsite, just make a phone call and everything is taken care of. I get first rate response because I am a return customer that they can count on, it's all about developing a relationship built on trust. I don't think you can trust your PM

@Matthew Wilson similar thing happened to me in 2008. A short sale of condo listed at 28k. I made offer thru agent and got back a verbal OK. Three days later agents calls and said bank needs 33K for the deal. I was pissed but it was still a good deal so I bought the property. I have made good Cash income for 12 years and property is now worth 95K. So look down the road a bit to see if it's going to work out. If this is in a good community, waterfront and dockable it has a lot of upside

@Joe Splitrock. Yes everyone has a different strategy. I have moved away from SFH and focus on 1/1 condos. Just makes my life a lot easier. Of course there are some HOA rules but with most SFH's these day you have HOA as well. Neighborhoods don't like rental properties, condo owners don't seem to mind. I never have to worry about the lawn, the roof, the sprinkler system or eviction of families with kids. Not much Upkeep once I buy and remodel. To each their own, most investors shy away from condo's.

@Billy Cha. It is my policy to do a new lease every year and always include a modest rental increase of @ 3% for someone I want to keep. You should not ever renew a lease without increasing the rent, it will cost the tenant more to move that paying the extra. The other side of the coin is during times like we are in it may be a little harder to find a good tenant. I present the increase by saying due to increases in taxes and insurance I will need to raise your rent by a modest amount to cover my expenses. If they decide to move then you can get the current market value.

@Liam Martin the penalty for early withdrawal is very harsh. Does your 401 have a provision to make loans. That would be a better strategy I have used loans against my 401k to buy a few properties.

@Thomas Ingrao I like to think I am an investor sometimes. . I try to buy one property per year. I don't lowball offers because i find that to go against my beliefs. I also sell a property every year. If I get a lowball offer then I will not entertain that person again Just the way I do business. I don't use an agent. I research the property myself and in I like it I go to the listing agent. They get both ends of the commission and will represent you better. I try to list my properties as FSBO and offer 3% commission to realtors with a 1% bonus if they get asking price. Most will take that. Realtors work for themselves and have a reputation to uphold. Lowball offers are not in their best interest.