All Forum Posts by: Jerry Jenkins

How do you schedule rehab without knowing when property will be vacant?  How do you schedule an Open House if property  is not even closed yet?  AND you do not "know" eviction laws for the county you are buying in?  Sounds to me like you have a real problem not knowing a realistic timeline for your project.  Checking occupancy, tenant laws, eviction procedures ALL should have been done long before now to have any realistic ability to make plan.  You do NOT have a "timeline or schedule" sounds more like a "dream"of how you hope to have it progress but that has a zero chance of success.

You are missing several things to make it an option.  First, it is not Real Estate agents that might be looking fo a faster, easier close because they represent the interest of either the Buyer or Seller and they are the ones who need to read, understand, and sign docs.  Second, there are 50 states in the United States and EVERY state has different laws so there is no way for one "simple" system to cover all 50 states, all types of sales, all types of financing.  Next, what if a signer has a question in the middle of your "simple process"??  Who is there to explain the numbers, the state law. requirements on both parties?

Instead of focusing on the debt; I would recommend talking to lender to see what your debt to income ratio is, how solid your income is, what other expenses you have, and decide what price point you can afford to buy. Once you know what price point you can afford that will determine what options you have as far as a single family home, a 4plex, etc.  

Once you know what types properties are in your price range then you need to research real estate laws, tenant laws, STR laws or restrictions, rental income both long and short term and appreciation rates for your local area. That will determine which type of property, how to manage it, and how to get the best rate of return from it.

Research your local market to see what the best real estate segment is and deciding if you are willing or able to manage that type of property.  Real estate always changes based on local laws, job and population growth or decline, and the current case of the market.

As a Realtor for over 9 years, property investor for over 30 here is what I used to decide on a vehicle.  I goggled best MPG SUV and several years ago came up with a Toyota Highlander Hybrid.  Then I searched prices nation wide and found that here in Las Vegas that car used would cost around $20k to $22K depending on milage so I found one just outside of Atlanta, GA for $14,500 with 96,000 miles.  Paid couple hundred dollars for plane ticket, flew out ,had dealer meet me at airport, test drove car and drove it back to Vegas.  It now has 221,000 miles on it, still gets over 25 MPG, had original brake pads replaced at 173,000, and oil changes every 5,000 miles.  Large enough to haul a client and I have had a Billionaire and his wife ride with no complaints a few times.  Also the back is large enough that I have even hauled refrigerators to rental properties, strapped ladders and mattress to roof rack.  Most expect the vehicle to last to over 300,000 miles. 

 I also used to hold Open Houses every weekend and for my open houses I put out 25 signs, 6" folding table, 2 folding chairs, printer, computer, and internet hot spot.  When people walk in to my open house, I had a COMPLETE office setup so if they did not like the house, the floorpan, the size, etc. I could pull up other listings to find them what they were looking for in their price range and then set times to show them other houses.  You can not provide that level of service with a Telsa or compact car.

Do NOT buy a vehicle for how others will perceive you because that will last about 5 minutes when you start talking to them about real estate; the real reason a buyer or seller will choose to work with you or not is the VALUE you bring to the transaction and not what you drive.

As a Realtor and with 30 years experience as an investor here is what I suggest for new agents just getting started.

Read the following books...

The Richest Man In Babylon for financial management 

The Go Giver for building a real estate agent business

The Millionaire Next Door for learning which career field actually generate wealth and why.

The Wealthy Barber for different ways to be successful in real estate investment.

The one thing you need the most is experience so once you get your license try to join a team where they can teach you the ropes, introduce you to other investors and allow you to see how the real numbers work, what a good deal looks like and how to manage it.  The real estate market cycles so what works this year may not work next year and you need to know the complete cycle, when to flip and when to sit on the sidelines, and how to find deals, sales, and contacts for all phases of the cycle.

As a resident of Las Vegas since 2006 and a Realtor since 2009 a few thoughts.

Land.  Not unlimited supply;  We are bordered by an Indian Reservation to the north west, Nellis Air Force Base and Apex commercial zone to the north and north east, Red Rocks National Park on the west, Boulder City to the south east has a moratorium on new construction.  Along with eh fact that most public land and even some inside city limits is owned by the BLM and is sold off in small parcels.  We do not have a lot of "vacant land" that should be zoned for residential housing.

NV has no state income tax, low property tax, and so we are getting lots of retires coming here to avoid CA tax rates.  I do not either either state changing their tax model so the flow will likely continue.  Ad to this the lack rental restrictions, environmental restrictions, land lord friendly eviction laws, and you get a market favorable to rentals and investment.

I agree that we should not be seeing appreciation rates over 20% like we had in the past but for a city of 2 million we only have roughly 4,000 houses on the MLS market and have 4,700 under contract this month so less than 3 weeks supply of listings. SFH went up 18% in the last year. I expect that to slow down but to be over 10% over 2018, 2019.

Raiders, Golden Knights , Aces, and talk about a professional baseball team and basketball team might be coming.  This is not only the players on the teams but also the staff, the support, the families, and even some fans of the teams that are adding to our growth.  The teams will also add visitors coming to watch their team play here while gambling.

I refuse to buy in CA or Seattle simply for the time and cost of evictions, taxs, and regulation.  I do not know those markets but there is nothing that I have read or seen that makes them interesting to me.

There is never going to be a one answer for all situations when it comes to the debate about commissions. Some states charge an agent to list a property on their MLS system while others do not. Some sellers markets allow 1 % listings to sell quickly while in a buyers market a listing agent may pay over 1% for marketing to get the offers to come in. As a Realtor I will never list for 1% in any market but other agents in my market do. They say they will list for 1% but that is all they do. They do not market the property, hold open houses, negotiate contracts, and refer all questions to the seller for them to handle on their own.

I now have about 3 different "business models" working in las Vegas. There is a new company call ed Open Door that markets that they will buy any house, close on the sellers timeline, pay for the moving truck for intern moves, and cover all closing costs without agents.  What they do not tell you is that they pull comps to determine "fair market value" deduct for "non-standard paint or flooring" so they deduct the cost of a complete repainting, compete reflooring, and then deduct about 30% of fair value and that is the cash offer they present to sellers.  Once they close then they have an in-house agent that will list and resell the house after being painted and carpets replaced.  Quick easy sale without Realtors but you net around 60% of market value.  Zillow is even now talking about acting as an agent for both parties in a transaction.

You are missing my first 3 questions I always wanted answered before I even start looking at A house.

1.Is the city/community population growing or declining?

2.Are jobs growing or declining?

3.What has been the appreciation for that neighborhood over the last 10, 5, 1 year?

Before looking at numbers for a rental property I first need to decide if this is a neighborhood or city that I want to invest in.  Focusing on the numbers for a certain house is good but if you have great cashflow in a neighborhood with decreasing property values then you better have a 10 year plus hold gameplan and some places will never go back to their prior prices.  I would rather buy in the best city for growth with minimal cashflow rather than great cashflow in a declining area.  Remember that there are 4 different profit sources for any property and I want all 4 working for me.

The real problem I see here is not about grass.....quit focusing on grass, cost to cut, her divorce, being nice or not.  The REAL problem is that as the owner of rental property you need to shift your mindset from "this was your home' or tenant has problem A, B, C, D, all the way to Z.  

You have now started a BUSINESS and the business needs to follow a clear, planned, managed method of operation.  You have terms in the lease that are legally required to be followed by ALL parties and if you do not shift to a business owner mindset from your current "past home" you will not manage your business in a professional manner.  This time it is divorce, small kids, and loss of riding mower.  Next time it will be job loss, or unexpected car break down, or job loss, or on and on and on.

The REAL question is are you going to manage your business in a professional manner by following and enforcing the terms of your lease or are you going to fall for every sob story a tenant gives you as an excuse for violating the terms of their lease?  Being "nice" is going to cause you far more headaches and expenses than ANY other catogory of expenses a rental property has.

I have had rental properties for 30 years and EVERY time that I allow a tenant to move in without full deposit, accept late rent,  agree to wave late fees, unmoved grass, etc. it ALWAYS grows in to a bigger more expense problem for me AND the tenant.  Good tenants fix their own problems BEFORE they become your problem; let tenants create problems for you does NOT get better over time and only teaches the tenant that you bent once so they expect you to end again, and again, and again.

Your business, your choice on how you manage it.

Yes, Parkway Villas in Clark County.  Story is when they developed the community, they build clubhouse and pool on the center island of the community.  On the Southside of the clubhouse, they built 4 1bed/1 bath units with one having direct access to the clubhouse for an on-site manager's quarters.  2 were designed for Porters and 1 was envisioned for rental to unit owners that needed additional space for visitors.  When the community was mapped they did not map the center island since it was common area but instead of paying cash to the attorney that did the development work and wrote the CC&Rs, they sold him the 4 until and gave the 99 year land lease to avoid the remapping costs.

Now that I am the lease owner with a $12.00 a year rental cost; I need the HOA Board to sign for the remapping request at the county since they are the recorded owner of the parcel. The CC&Rs state that ALL unit owners have the right to condo but without HOA Board approval I can't move forward. I have another meeting at the next board meeting and it is on the agenda but there is no guarantee that this will be approved so I might be fighting the battle for longer than I want since the condo market is climbing at a faster rate of appreciation.

Currently rental income market value is $700 per unit, $2800 a month with a total of $640.00 monthly HOA Fee that pays water, sewer, trash, guards, and insurance on the structure. After taxs, etc. net cashflow is roughly $2,000 a month so it has been a decent hold but I can get better returns and appreciation from the condo plans I have.

Are there any private lenders that would be willing to lend on my current equity?  I am going to be selling within  year regardless if I can complete the condo conversion?  If so, what would the numbers look like?