All Forum Posts by: George Azita

Investors' profits are earned when the property is purchased based on the property's projections. With prices at their current high level there is minimal profit and greater risks for the exact reasons you explained. Therefor, if you can't hit a homerun with today's prices I would rather hold onto my money and wait for a sure-thing vs. wanting to earn less per hour for my time than I can earn wiping tables ad a fast food establishment. Real estate is not always the best place to dump our money into. There are times we need to sit back, avoid being anxious and wait for as long as it takes just like an alligator.

Every real estate investor, newbies and pros, should read 'The Encyclopedia of Commercial Real Estate Advice' by Terry Painter. You can get the book on Kindle for $29, it is written in a manner that is fun to read, has a wealth of information that even pros can use for refreshing and has great advice for even single-family investors. I've been investing in real estate many years and still learn something every day. I never read a book about real estate as great as this one.

I agree with your predictions about a recession vs. a crash and agree that investors should hold onto their cash vs. blowing their wads of cash by buying properties with minimal potential for great profits. I agree that buying properties right now would be okay if such animals exist, but I would rather hold onto my money and wait to see if I can buy add-value multi-unit properties in the future that will return both cashflow and appreciation.

I have my cash in an online trading account sitting on the sideline waiting for a market crash where I can buy stocks with good value currently selling for around $10 and will get these for around $2 to $3. I invested heavily in these stocks in February and March 2020 when COVID caused the market to crash and made 300% to 400% in 12 to 18 months on all 5 stocks I purchased. Then, if a great property falls in my lap I can get the cash out of my trading account in a few days.

The software is something developed for personal use and software that every investor should delve into if not just to see for yourself whether or not you are covering your bases. The software should be a free shareware where multiple professional investors work together to improve it for every investor's benefit. The software does so many things it takes several hours to explain. It will never be perfect and may not be totally accurate, but it is fast has does everything you wish Excel could do. I totally rely on the software and compare the reports with marketing packages, compare with what brokers representing both sides come up with and the software is better to use because when you have people with their own personal agenda helping you with the calculations then the results are most-likely lopsided.

 I started investing in real estate in 1968, got more into real estate from 1973 to 1980 and sold all my properties. Then, I got back into real estate in 2001 when rental units were selling for $67k per unit, purchased 5 buildings with about 110  units,  purchased 10 homes in Idaho, already owned 3 in Massachusetts, purchased one in Denver, purchased 28 homes in Las Vegas between 2008 and 2010 for 30 cents on the dollar, quadrupled all my rents since I purchase my properties. Today, properties I purchased for $2 million are work close to $9 million plus I paid off every property I own and have zero debt leaving me with a ton of cash I don't know what to do with.

I don't need to see addresses, but it would be nice to see all the numbers for the property(s) you are considering and I will put the numbers in my software. You can get a free copy of by searching Google for Bestline Plumbing, scroll down the home page to MS Access Software and download it.

You need to be very cautious in regards to what you think you are learning from the so-called experts because people who earn money by giving advice tend to explain only the positive things that can happen in an ideal world. You rarely see a wannabe guru teaching you about all the horrible things that can make your deal go bad a little while down the road and a guru rarely teaches the entire abundance of items you need to factor into your projections that you need to do before you purchase a property.

My point is; don't get over-excited after buying one property until you see what happens down the road. You claim you will be earning a cashflow of $380 per month, but I will bet that you will not earn earn anywhere near that amount because there are many things you most-likely did not consider e.g. an expensive plumbing problem, roof, fire, failure for tenant to pay rent, or a number of other bad things that will eat up your $380 cashflow. 

A high percent of investors project that the maintenance for a single family home will be 8% per year and if you are collecting $13,200 per year then the average investor predicts that your maintenance will be $1056 per year, but that is nowhere near close to what real maintenance expenses are. Just about everything on this planet has a life expectancy and everything inside and outside a home has a life expectancy. One year, your water heater goes out and in California the average cost for a 40-gallon water heater by a professional licensed contractor is more than $2200. There goes 2 years of your projected maintenance. 

If your furnace needs to be replaced the average cost for a forced air furnace is $5,000 to $12,000 and that is for heat only. I am a plumbing and heating contractor, called several contractors in Idaho last week and those are the prices I was quoted. So, there goes 5 to 10 years of your projected maintenance.

Then, when a tenant moves you need to paint, replace flooring, clean, repair and replace appliances, make several repairs like replace door locks. replace missing and broken screens, replace faucets,  replace cracked or damaged sinks, do yard cleaning and repairs, tree and plant trimming and the list goes on and on and when your tenant moves you get hit with total costs of about $6,000 to $12,000 and this is in additional to plumbing, furnaces, etc.

It appears that you are purchasing out of your area and you will inherit many risks and additional expenses by having to pay a property management company and because you are not hands-on for everything.

I would like to see you post all your numbers and projections and I will put them in my software and give you my opinion. I am in the Los Angeles area, have been investing more than 50 years in single-family and multi-unit properties is several states and I have not been able to find homes or multi-unit properties where the numbers make any sense for about 3 years and I hear the same story from many other experienced investors. Now, you have to wonder whether after reading about real estate and watching some videos you are smarter than the experienced investors who are backing away from buying any properties at their current high prices.

This is the last thing every new investor needs to give some serious consideration. There are many experienced investors bragging about how much money they made in real estate and they do this bragging to motivate people like you to invest in real estate. Even I made more than $40 million since 2001, alone, but the thing you need to know is other investors, like myself, purchased rental units for $67,000 and now they are selling for $300k to $400k per unit. Just 3 years ago, rental properties were literally doubling in value every year meaning you could have made 100% on your money every year, but real estate prices have actually been on the decline for the past 6 months. In March 2021, I purchased a 6-unit property for $291k per unit and for the past 6 months I've been seeing many properties in more-desirable areas for $250,000 to $290,000 when the properties in these more-desirable areas should be far more than the $291k I paid.

I've had several million dollars to invest for the past few years and have been holding off. I see hundreds of people posting about their investments, have many friends who are paying super high prices for properties where the rents cannot be increase, significantly, and I don't see where these investors have any projections that make sense. Rather than people just saying a property is a good investment I would love to have someone prove that I am wrong by having a friendly and constructive argument that consists of a thorough and complete analysis.

Stick one toe in the water at a time and wait to see how the temperature feels before you regret finding out that you based your projections on a totally incomplete analysis. It is the things you did not learn that will make you hate the real estate business and bankrupt you.

Many utility companies have some sort of legal right to bill the property owner for utilities when tenants don't pay i.e. in Las Vegas. As the property owner, I get angry when the utility companies give tenant credit for utilities and then send me the bill when the tenants don't pay, but there is nothing we landlords can do. Sometimes, I get utility bills several weeks after tenants move out and I don't think it is fair that the utility companies let the tenants get away without paying and don't give me a heads-up so I can start collecting from my tenant earlier, but I am guessing the utility companies don't care about spending their time and resources to collect from the tenants when it is much easier for the utility companies to go after the landlords who can't get away without paying because the utility companies will file a lien on the property and then the landlords will pay many time more.

You can't expect your PM to pay for utilities for your property from his pocket and you probably made a hasty and bad decision by getting another PM when the PM you had did nothing wrong. A few years ago, I did a lot of research in the Memphis area because the prices for real estate looked like a goldmine with property prices so low, but after speaking with many brokers I came to the conclusion that Memphis is The Eviction Capital of the World and the biggest problem is that a high percent of renters live paycheck-to-paycheck and when they lose their jobs (if they have one) then they don't have enough money in their banks to pay their rent for the following month. Perhaps, you need to review your business model, review the way you analyze properties, factor in losses from your tenants and don't be anxious to put the blame on your PM. 

Taking and accepting losses is only a part of doing business and has to be calculated before you buy properties. Losses have to be an expectation and then you are mentally prepared to deal with them. 

Electric is the most-expensive heating system and we always replace them with a gas boiler hot water baseboard system. There is a little maintenance for hot water baseboard i.e. replacing the boiler every 30 to 40 years, replacing parts on the boiler and valves and pipes corrode, but I will take gas over all-electric any day. I like the way the hot water baseboards continue to give off heat after the boiler turns off and this makes the temperature in the rooms and on the walls more even and there are less cold drafts. An electric heater that blazes can get everything as hot as a baked potato fresh out of the oven, but hot water baseboards do a much more even job. Gas is far less expensive.

I own several guns including an AR-15. Barret 416, rifles, hand guns, have a lot of experience with weapon safety issues and the very last thing I would do is allow or participate in amateur shooting since amateurs do the dummest things when they have a weapon in their hand.

About two years ago at a place in Las Vegas where people pay to shoot weapons a woman fires something like a fully-automic AR-15, spun in a circle while firing and killed an employee.

A .22 bullet gun is no safer than any other gun just because it is small because a .22 will travel 1-1/4 miles because it is so small.

Regardless of how careful I am when shooting with friends, I've had many near-disasters like when I asked my friend three times whether or not he removed the bullets from the AR-15 chamber and then after transporting the gun from Las Vegas I opened the case and found the gun was fully-loaded and ready to fire with only the accidental pull of the trigger. That was the last day I ever allowed someone to go with me when shooting.

About 40 years ago, I fired a .22 rifle at an object about 300 feet away and the bullet went into a 4 x 4 post behind the object I was shooting at, made a U-turn and broke a window in a vehicle that was behind me. Judging by measuring the hole in the window the bullet cleared my chest at the level of my heart by only 12 inches. That was the last time I fired a .22 rifle.

My point is; I am a very conscientious and safety-minded person, but guns and bullets are dangerous and accidents happen. So, why would you put yourself and others at any risk just for a little fun. There is a true story that bothers me many times every year and the story is about a man who was walking down stairs with a rifle swung over his shoulder. His two children were coming down the stairs behind him, his rifle fired a bullet, went through the heart of both his children and killed them. 

As for taking your guests ATV riding, I can write horror stories all day long explaining why you don't want amateurs and idiots on ATV's. I've owned ATV's since about 1980 and still have 14 quad runners near Las Vegas. After several very unexplainable accidents that resulted in trips to hospital emergency rooms I finally learned my lesson and stopped inviting friends to ride with us in the desert.

We've had several unexplainable accidents where guests were riding quad runners at less than 20 mph and for no reason rolled the quads and broke their collar bones. About two years ago, my wife invited some friends from church to go riding with us. So, we gave the largest and slowest bike, a 4-wheel Honda 250 called Big Red made in about 1985, and the woman was riding very well for about two hours. So, just before we arrived at our home the woman was going about 15 to 20 mph on a super straight dirt road with zero bumps and I was behind her. For no reason the woman can explain she jumped off the quad when driving, broke a finger and we had to rush her to a hospital 45 miles away. NEVER AGAIN WILL A FRIEND OR GUEST RIDE ONE OF MY QUADS.

I've also had the very same type experiences with small water craft like the Sea Do or whatever you call them I had a Wave Runner and a Wave Raider. I let a brother-in-law ride one on the Colorado river where children were playing in the water. This fool driving the quad-runner was about 55-years old and I warned him about the children and dangers before he took off. When he came back to the shore he was coming in at about 50 mph and came so close to hitting the children he cause a father to want to beat him up and I had to get between them. NEVER AGAIN WILL I PUT MYSELF OR OTHER PEOPLE AT THAT SORT OF RISK JUST TO WATCH THE ENJOYMENT OF OTHERS!!!

Our lease agreement is 24 pages and the way I wrote my lease is I went through many real estate books, websites, copied clauses and wrote my own clauses throughout the years when I had issues with tenants.

We don't renew leases because a new lease locks us in to renting to the tenant for another year and we are actually happy when tenants move because when they move it gives us the opportunity to go through the rental unit to keep it in pristine condition and it gives us the opportunity to increase the rents to get them up to the highest rent the market will bare. The increased rents after renting to a new tenant are usually well-worth the change of tenants when stretching the math over a 10+ year period.