All Forum Posts by: James Galla

@Steve Miller

Sounds like a cool deal - cash advance via equity. You ought to account for capital expenditures, rental rates, and other factors to see if that purchase price is worth it.

Essentially, you'd be stuck at a fixed rental rate, depending on your purchase price and would be subject to interest charges if you leveraged the property to pull out the equity.

@Kevin Hoff

Just a heads up - you ought to find some boots on the ground. Since you're OOS, you're prime for two big problems:

1. Overcharged services/mismanagement from a property management company; and

2. Buying a property in a bad area

Local boots on the ground lowers your chance of buying a losing house and increases your chance of accountability from the property manager.

Anyways, good luck.

This sounds like an issue that comes up when you don't properly screen your tenants.

@Bryan Creed

The problem with many management companies is that they have a conflict of interest when it comes to service calls. Up-charging the cost of servicing the property is how they crowbar money out of you, so they aren't going to be inclined to tell a tenant "no."

You're bound to have a similar experience when turnover time approaches. They will go through the property and upgrade it as much as humanly possible so they can get those up-charges.

Given that context, you ought to verify whether they are real service calls or whether they are something you could consider as inflated business for the benefit of the management company.

Then, you also need to consider the tenant. Maybe they are too picky. From experience, I have no issue telling a tenant no. They understand the property is rented "as-is" and understand that if they break something, they buy it. There aren't any superfluous upgrades to the property under the guise of fixing something.

@Gordon Olson

The income you receive comes from your tenants. So, after your expenses, it's generally yours.

Taxation depends on your business structure, elections, and type of transaction. See your accountant.

@Kyle Root

Your free time and sanity is probably worth more than cleaning someone's toilet after your 60 hr/wk work schedule.

You ought to look at the end effect - sure, you might save a couple bucks now, but what are you going to do with your next property? Are you going to manage two properties or more? And, would you have the time for those extra properties? What do you do in an emergency? You work 60 hrs/wk, but are those hours flexible? Given those considerations, I don't think you'd find it worth your time.

I think it would make sense if you had extra time and a goal of self-managing your portfolio. Here, your time is strained and realistically, you may not be able to take on management of additional properties.

@Jeff Byrne

Start now so your tenants pay your student loans. Otherwise, you'll delay starting by a period of years.

@Remington Lyman

Might as well get your license.

Watch this video from the Ohio Dept. of Commerce Div. Of Real Estate. On the plus side, they say they are open to questions, so you might as well call them and ask.

https://youtu.be/9fi54S8nwUA

If you couldn't, I'd imagine that many landlords would be stuck with permanent squaters.

Your lawyer should be able to handle it.

@Taran Garza,

You ought to first guage where they are in their acquisitions process. They might not be set up to acquire anything at the moment. Or, they might not want to leverage anymore in order to acquire. Find out whether they are even willing to consider doing a deal.

When you establish their business posture, then I'd start finding a deal. So, you find a deal and package it nicely with exec. summary, and other info. This way, you don't waste your time finding deals for investors that aren't even going to consider them. Although, I think you should have deals on deck (assuming you are trying to be an extremely proactive agent), regardless of who the investor is.