All Forum Posts by: Joel Allen

@Liam Delumpa

I have out-of-state properties, but all are single-family homes that my family and I lived in for a few years and then turned into a rental when the military sent us to a new duty station.  Because of that, we have a 'hybrid' approach that we use for managing those properties.

We hire a leasing agent to manage all the items up until the point the tenant moves in (photographing the home, listing the home for rent on the MLS, coordinating showings, accepting applications, screening tenants, accepting security deposit, etc).  On the tenant's move-in date, the leasing agent meets the tenant at the property, provides them with the keys and a welcome package that we provide, reviews the lease with the tenant, and conducts a walk-through inspection with the tenant.

As soon as that walk-through inspection is complete, the leasing agent officially hands over management to us and we are self-managing for the remainder of the tenant's occupancy. Since we have previously lived in the homes/areas for 2+ years each, we have built a trusted group of contractors (plumbers, HVAC, electricians, etc) at each location that I can call whenever a maintenance issue needs to be addressed.

This 'hybrid' approach allows us to have the necessary boots on the ground during initial tenant on-boarding & exit. We pay the leasing agent a one-time leasing fee once the tenant is placed, and it eliminates the ~10% monthly property management fee.

@Bill B. is exactly right.

Most borrowers have an escrow account tied to their mortgage. You may have seen the term PITI (Principal, Interest, Taxes, Insurance)….those are the 4 components of a monthly mortgage payment, assuming there is an escrow account.

Real estate taxes are typically due annually and insurance payments are typically due semi-annually (may vary by taxing entity or insurance company).

The mortgage loan servicer sets aside the tax and insurance portions of your monthly mortgage payment into an escrow account, and then distributes those amounts to the insurance company and tax authority when the annual/semi-annual payments are due.

@Eric Grunfeld

Some cities make crime data publicly-available via websites that the police department maintains and updates.  It looks like the Las Vegas Metro Police Department has a fairly extensive Open Data Portal which allows you to view crime maps of various areas of the city, search crime frequency by zip code, and see weekly crime reports.  Link is below:

LVMPD Open Data Portal (arcgis.com)

@Wydell Jones

Once you purchase the fourplex and move in, you'll complete the Residence Homestead Exemption Application (Form 11.13) and select the '100 Percent Disabled Veteran' option on the form.  You'll then submit that form to the Harris County Appraisal District.

The form does require the homeowner to state whether any portion of the property is income-producing, and then indicate the percentage of the property that is income-producing.

The Harris County Tax Assessor has a really user-friendly 'Military Help Desk' page with additional information & resources about the exemption at:  Harris County Tax Office (hctax.net)

Note:  The info above is specific to Harris County, since you mentioned you wanted to purchase in Houston.  If you end up purchasing in a different county in TX, check with that county's tax assessor office for specifics.

@Jennifer Kessler

Amanda Han (CPA) wrote a blog here on BiggerPockets a few months ago which was a good read. It provided an overview of taxes on STRs and discussed some strategies for reducing taxes on an STR. Link is below:

Reduce Your Taxes with Short-Term Rental Properties (biggerpockets.com)

@Jordan Naeem

Welcome to BP and thanks for your service.  I really like several aspects of your plan:

1.  You have a realistic timeline for achieving financial freedom.  A steady, methodical approach to growth often has more longevity.

2.  You have a really good W2 job that you intend to keep.  That will make finding financing for future deals much easier.

3.  Your plan to kick-start your buy-and-hold portfolio by converting your current home into a rental once you upsize allows you to retain your advantageous owner-occupied financing on the home.  You also understand the nuances of the home and the neighborhood since you've been living in that area for a while.

@Jahshim Snyder

You're right about the primary residence requirement, but VA loans can only be used for 1-4 unit properties. Your post mentioned that you're planning to purchase a 7-unit with your VA loan.

If you want to pursue the 7-unit, you want to discuss with a lender to see what commercial financing options may be available to you.

@Christopher Roper

One of my neighbors recently has some tree trimming and a tree removal done by The Real Stump Busters Tree Service here in San Antonio.  He had good things to say about his experience with the company.  A quick look at their website looks like they’re licensed and insured (which I would require if I was hiring a company to do tree work), and highly-rated by customers.

@Corey M.
I’ve found that military renters are overwhelmingly great tenants that who pay on time and take good care of the place.  

Don’t let this one instance change your investing strategy...it may have been an anomaly.  In fact, a Rand Corporation study of active duty Air Force members found that the average tour length (length of time in one location) is 53 months for enlisted Airmen and 34 months for officers.  I imagine the other military branches are fairly similar.

It’s worth getting to know the specifics of your nearby military base.  As an example, some bases host large 1-year schools for military members.  So, those students will likely only be at the military base for a year before moving on.  Understanding these nuances about your specific location can help better manage your expectations about average length of tenancy.

Source:  https://www.airforcemag.com/ai...

@Greg Cook

In my experience, it's not worth it. I had home warranties on two of my rental properties for two years but after running the numbers it didn't make sense to keep the home warranty. It cost approx. $50/month per home (plus a $75 service fee each time they sent a contractor to the home). My observations were:

1. Read the fine print! There were a LOT of loopholes built into the contract of what the home warranty wouldn't cover. Many home warranties require you to pay for upgraded coverage for items such as refrigerators and garage doors. There are also annual coverage limits that cap the amount of repairs the warranty will cover on each system.

2. The contractors that were utilized by the home warranty companies were (in general) not high-quality. The home warranty company wants to repair the issue at the lowest cost, so they choose contractors they can get at the lowest price. When they sent contractors to the homes, I'd look them up on Google Reviews, Yelp, etc and most times they were about 2 out of 5 stars.

3. The turnaround times of the repairs were slow. It often took several days for the home warranty company to get a contractor out to the home, even if the repair was for a critical system (e.g. HVAC stopped working in Maryland in January).

Bottom Line: Instead of paying for the home warranty, I'd rather set aside the $50 per month as part of my monthly repair/CapEx. I can coordinate higher-quality contractors and do it more quickly than the home warranty company does....and after totaling all the costs, I can do it for cheaper.