All Forum Posts by: Jacob Sampson

 Besides, that's only part of the picture.  Competing with PM owned properties for top tenants.  Realizing that the PM hasn't stepped foot in the property for an extended period of time, which has lead to avoidable maintenance.  competing with the PM owned properties for priority of maintenance people.

Obviously 100% of PM's aren't bad but when the vast majority of investors feel a certain way there is probably a reason.  Not unlike some dude getting divorced 5 times and still blaming it on the spouse.  If the idea that PMs are bad didn't get so prolific by accident.

 it's likely, his own property or the property of one of the owners of the PM. 

I haven't ever done it before but I would guess there are pretty slim margins.  Any of the value you are adding would have been handled by the contractor the new owner will use to build their home, so there isn't much hassle that the new owner is being saved from.

My experience (none first hand) is that land is a speculative play (I think over the next 10 years the city will grow out this direction) or a full development play (I build the home or commercial buildings on the property and then lease or sell).

Lastly, without any other details, you accumulating a big pile of sweaty cash is never a bad way to finance a deal.

 I stand corrected.  I wonder if there is a report on areas with the greatest number of investors getting crushed, would it be a similar list of locations.  I just don't have big enough balls to play in that game, I guess.  I have to have cash flow.  

I can tell you that when prices were tanking (not nearly as much in my area) I didn't care one bit because rents stayed the same or improved.  In fact, I loved it because my property taxes were also going down.  If I had been losing value and not generating cash, I would have been pretty frustrated.

It states that 5-7 years is about how long the run-ups last, on average, I would suggest getting in and out because we are into the 5th year at this point

I will need to do a search on BP to see how many non-PMs are pro PM.

I would be interested in running some numbers by you, off-line or at least private message.  I'm certain, I'm not over paying but also, there are other issues, stated in my post above, that go beyond whether or not I can remain profitable.

 That's possible, there seem to be countless reasons not to use a property manager.

1.  I would be willing to bet that If I questioned 1000 investors greater than 60% would be somewhere between "I hate property managers" all the way up to "ehhh".

2.  If a PM has their own properties or the owners of the PM do, then there is, absolutely, a conflict of interest.  So, even if I am profitable, I'm probably losing margin to the best tenants ending up with the PM owned properties and the PM owned properties getting priority service.

3. Taking 50%-100% of first months rent for new tenants, then charging a marketing fee for posting an ad on Craigstist, taking 6%-10% to answer the 2 calls a year I might get per SFH... I'll pass.

OK, maybe not countless reasons, but there are 3 that I think are significant.  

I'm not sure what the correct answer is to this question but I would probably echo @Nicole A. that seems like reasonable advice. I have 1 LLC for my 16 units and a good umbrella policy.

A more direct answer might be, if you have 3 LLC's for each property that may be too much.

I would call the police and your insurance company.  Nothing forces you to actually move on the claim if the numbers don't work out.

@Iman Yu

Congrats! That looks like a reasonable first deal.  I hope you have continued success.

And @Lance Wakefield's advice is spot on.

As Warren Buffett says, you shouldn't have to crunch the numbers to determine whether or not it's a good deal.  It should be obvious.  Although, this really wasn't Lance's point, he said you should have a larger pile of sweaty cash.  To which, I concur.