All Forum Posts by: Jeff Kehl

I use two different rules for cash reserves. 

6 months x monthly debt service, insurance and taxes = x

4% x gross value of real estate portfolio = y

x and y for me work out to roughly the same amount. I keep that amount in liquid or close to liquid funds.

@Daria B.

Let me first say that what worked for me may not work for you because state laws are different. In Georgia attorneys perform closings and I know that's not true in other states where I've used title companies. A purchase & sale agreement I usually make an offer on is just a contract approved for that purpose by the Georgia Association of realtors. Each state has a standard form.

But the contract my lawyer wrote up was a very simple 1 page document that stated the terms we'd agreed to signed by me and then the seller stopped by their office and signed it. They did not have their own attorney.

Your closing attorney could probably provide you a standard contract or you could get one online. Make sure it complies with state law. Maybe try the Florida Association of realtors for one. You need to think about everything that would be in a standard contract if you're acting as your own real estate agent, earnest money and what happens to it in a dispute? Inspections? Contingencies for financing? What happens if they're not moved out by the closing date?

If you attend local real estate meet ups in your area you can also likely get a contract template from someone there.

I'm not a lawyer and provide no legal advice, this is just my experience.

Mostly I buy off the MLS but I have bought several off-market. Really the process is not a whole lot different.

In one case I was rehabbing a duplex I bought on the MLS and noticed the duplex next door was vacant and needed work. I looked the owner up on the county records and sent him a letter. He was a medical professional who had moved out of state and didn't want to spend any more money on repairs. His local realtor/property manager called me and we negotiated a price. He wrote up a contract and we closed a few weeks later.

The second time was an out of state owner who I had purchased other property from. They called and asked if I would be interested in a duplex and a quad they still owned here. On this one they had a property manager who did the paperwork.

Also once on a house, the owner contacted me because I had bought a different house just down the street and they had tried unsuccessfully to sell 6 months previously. They were retiring out of the area and just wanted to be rid of the house. He was doing all of the maintenance himself and just wanted to retire to his lake house. They gave me a good discount and held a note for 20% so it was 100% financed. There were no realtors involved, my lawyer wrote the contract and closed it.

Hi @Bola A. you can find multi-family properties on a lot of the third party real estate sites now as well. Here's the list for Houston on realtor.com.

http://www.realtor.com/realestateandhomes-search/Houston_TX/type-multi-family-home

I don't think you'll necessarily find what you're looking for there but look at the listing brokers on those that are near to you. Call a few of them up and tell them what you're looking for. Good way to find a buyers agent.

Depends how much you trust them.

I actually don't talk to my PM on the phone more than once every couple weeks but I talk back and forth to her and people on the staff (team of 8) about every day via email and text mostly about maintenance issues.

There are a lot of 1-4 unit properties involved so I just work out a schedule where I drive by each of them about once a quarter. I just drive by I don't go in, a few I have never seen the interiors. If the unit is vacant and there are issues occasionally I'll meet the maintenance person there or they will more often send me pictures.

I get two statements a month with p/l and rent roll.

The exact balance of their mortgage is not public knowledge so only 2 parties know for sure, the lender and the borrower. The lender won't tell you and in fact probably legally can't. So the homeowner is really the only one that could tell you.

But what is public record is the original note which is filed with the county.

Since you have to do at least a basic title search before bidding on a foreclosure you can pick up the date and the amount of the original note. I use that and some excel formulas to figure out approximately what the balance is.

This is not exactly accurate because I don't know if they missed payments or made extra payments but lets me get close enough to know if it's one I'm potentially interested in bidding on at the auction.

There's a lot of complexity around buying a property out of foreclosure and you can get yourself in trouble in a hurry so please make sure you read all of the info here on BP about it and realize it is different state to state. Talk to a local real estate attorney if you can before starting.

@Lawrence Monyei

Hi, I'm just up the road from you a bit. In Georgia, www.georgiapublicnotice.com carries all of the foreclosure listings. They have to be published each Thursday for the 4 Thursdays proceeding the auction which is the first Tuesday of the month. So for the auction January 5th they were in the Paper December 10th and you can find them on that web site by searching that day.

Also, Cobb county has started using auction .com for all of their foreclosure auctions. So if you search Cobb county on auction.com and only look at the foreclosure auctions occurring January 5th you should get pretty much the same list. 

@Monika Haebich

I have been looking for some data like this for awhile. I have several markets I'm interested in but much like my long-term rentals I'm interested to compare markets to see which perform the best financially.

So average Occupancy by market would be great. Mostly I see people on this thread suggest you manually look at calendars to get an idea. Which works but is not very scientific and is tedious to look at a lot of data.

Next would be average nightly rental rate by the year or better yet by high/low/off season.

My wish list for both these numbers would have aggregate for the market and broken down by product type, 1 br/1ba condo, 2br/1ba condo, 3 br/2ba house. And since I'm wishing, it would be better to break this down by location as much as possible. Destin vs. Panama City Beach and then Oceanfront, Bay front, walking distance to beach.

Those two numbers give me approximate gross rents.

Harder but also on my wishlist are on the expense side to complete the proforma.

Average property management fees for full management or various levels.

Average Taxes, Insurance, HOA fees, marketing fees to AIRBNB etc., cleaning, maintenance.

For instance I would bet that cabin owners in Gatlinburg spend a lot less replacing furnishings than vacation homeowners in St. Thomas but I really have no evidence of that.

A lot of this data is probably not available but hey you asked... I think most people fall in love with a place for vacationing and work with realtors there to get this information hopefully before purchase. When I tell realtors I haven't settled on a market yet but want to see some financial data on rentals in the area I seem to never hear from them again.

@Mark Douglas Mine are typically lower in value like $120k-$180k range but I checked two of them and they are insured for replacement a little over $300k and the premiums are around $1000/annually.

The other thing you could try to get a quote is 

http://www.nreinsurance.com/. They're nationwide and I use them for a property I have in Alabama.

That seems very high. My 4 units are about $800-$1000 annually on a commercial policy with $5 million liability. I use American Family. What value are they insuring it for? You could always go ACV instead of replacement cost. I do that on some of mine.