All Forum Posts by: Savannah Leigh

OK here's an odd one...at least for me:
Had 2 apartments open up side by side one month. Rehabbed both, both on market same time.

Found 2 tenant prospects SAME DAY. Both single moms, both qualified, they picked each apartment (one front, one back). Rear one works out OK...cash each month.

Front one, she moves in April 1, and I give keys, etc. Moves her stuff in, I give her a couch or 2, good so far. May rolls around, my wife has our baby Savannah...so I do rent pickups but am kinda distracted.

May 18th or so, I realize a few (3) tenants aren't paid up...so I make phone calls. Gentle ones, saying "Just had a baby, might have missed it, but don't have record of...etc.etc." All tenants but her call and clarify ... the checks were waiting for me to pick up (they should mail em but whatever...) in one case I had forgotten that her check was deposited (got it day wife went into labor).

Dead silence from this tenant. Give her several calls and late notices, still in a mess from baby, so I decide to let it go to June 1 (We're normally "Late by 5th, File by 11th" company).

However, the apartment needs "emergency maintenance" - so I enter. EVERYTHING is there. Like she went out to work...right down to kids toys and her "personal recreational" devices.

No clothes, no toothbrushes. Milk expired on April 8. yes, less than a week after she moved in.

Cell phone dead on bed.

I'm spooked at this point. I leave another violation notice, "masking tape" trigger the door so I can see if it is opened, and go visit the magistrate.

June 1, 2, 3, no rent. Leave another "intent to enter" notice, and go in on the 5th. EVERYTHING is exactly where it was last time.

We're scheduled for eviction this Thursday.

Been managing rentals all my life...mom owned 26 units.

I've owned commercial since 1999 - an easy warehouse with my brother as the only tenant.

Been doing residential rentals since 2008. 16 units so far.

Getting into pre-foreclosure/flip/wholesale/etc. now.

Professionally, I'm a video producer/media/hologram developer, though since I can't find maintenance people as good as me (which is sad)...

I believe national code is that you need 2 circuits (can be shared) in each room...so a single circuit failure won't darken the whole room (theory).

Also, each bedroom must be an ARC fault circuit breaker (about 35 dollars), and each separate piece of countertop over 12 inches (or so) must be a new GFCI circuit (I prefer outlets over breakers for convenience).

Also, in my area you can't do any electrical unless licensed in a rental unit. So be ready to have an inspector or master elec sign off, or risk your insurance denying coverage.

Consider the child-safe outlets - built in kidproofing -

carefully label everything!

make sure to follow in-wall code (drilling through joists and studs, etc.).

Just a few thoughts

I have tankless in my house, and have no flow rate issues. Gas unit...I don't have experience with any electric models.

My experience: engineered floating laminate is easy (skills wise) and slow for an amateur. Needs an ok (not perfect) surface underneath and use the vapor barrier
for the pulling tool from lowes is JUNK. HD's is much more durable.

I don't like that it's based on particle board...wish I knew of an affordable alternative. Water can mess that up fast

In bathrooms and kitchens i use HDs floating laminate strip linoleum...where one piece underlays the rest.

Purchase/flip/hold deal:
70% ARV (low end CMA)projected sale
-10% ARV profit
-rehab if any
-carry/closing costs
- back taxes, utilities, etc.

If it's a hot area, and I think I can beat 70%, maybe I change that

For rental:
In my market, one of the few I've found you can get cash out each month, here's my basic formula:
Total rents
-30% for Maintenance and Vacancy
-10% for management (even if I'm doing it, it has value)
-$100/month profit PER UNIT
- all hard costs (except mortgage)
The remaining number is how much I can spend on a mortgage...and therefore gives me the value of the property

I'd pass. here's why:
If buying to rent and hold, not sell (even if slightly later) I couldn't care less what the comps are. I care about being able to eat while I own it;

$1200
-360 maint/vacancy
-120 management
-100 profit
-taxes (gotta guess $200/mo?)
-insurance (another $100?)
assuming tenant pays all else
this totals to $880, leaving $320 for a mortgage.

This mortgage is about $50,000 maybe. SO whatever gives you $50k current value is what you can pay.

Also, if he's paying the taxes/insurance/existing mortgage, you need proof of payment.

In my market, one of the few I've found you can get cash out each month, here's my basic formula:
Total rents
-30% for Maintenance and Vacancy
-10% for management (even if I'm doing it, it has value)
-$100/month profit PER UNIT
- all hard costs (except mortgage)
The remaining number is how much I can spend on a mortgage...and therefore gives me the value of the property

1. I second ALL of what was said above. YELLOW flags here, all over.

2. Don't believe the seller's "cosmetic" line. I have a seller calls me weekly with "cosmetic" deals - yeah, install plaster over the studs, fix the roof and patch floor holes - its visual, therefore cosmetic, right?

3. get a local agent to do a CMA (for you, even if you pay em a little). DON"T believe the owner's cma. I know when I'm doing a CMA to buy, I pick low end comps...and to sell, I pick high end comps. Not that I share them with buyers, but I do want to see the range.

I strongly suggest considering Northeastern (Scranton), PA. I don't know Pittsburgh market at all...so I can't compare.

As for viability YES YOU CAN. but you need local maintenance and (licensed) management.

IN PA REAL ESTATE MANAGERS MUST BE REAL ESTATE BROKERS unless they have an ownership share in the property (as I do with my out of state owners)

In my market, one of the few I've found you can get cash out each month, here's my basic formula:
Total rents
-30% for Maintenance and Vacancy
-10% for management (even if I'm doing it, it has value)
-$100/month profit PER UNIT
- all hard costs (except mortgage)
The remaining number is how much I can spend on a mortgage...and therefore gives me the value of the property

I did both a refi and eq LOC on two of my properties in January. Took talking to a couple banks, local banks (all I called were small locals) and it was easy