All Forum Posts by: Joe P.

Your lawyer should be working in your best interests. If this is truly the case and all of the above checks out, how is your lawyer serving your interests in this case? Honest question.

Keep us posted. A property for sale for 20k tells me a couple of things (depending on the neighborhood) -- its severely distressed, the tenants are squatting, the neighborhood is garbage, or the seller is desperate for cash. I would put bets on it being one or more of the first three, versus the fourth.

Why do you want a 20k property? Realistically...how much of a slice of hot garbage is this thing?

Heath - you can be pennywise but pound foolish in this situation.

Your carpet was installed before this tenant moved in so its a depreciated value. I'd find out what it would be to get new carpet installed and charge her for the clear damage. Sadly with carpets they are cheap flooring, usually get abused. You'll have to eat something there.

Other stuff -- make two lists for your handyman. One is stuff that's wear and tear and well-documented with price. Then, a separate list to cover tenant damage. Tell him to get to work, take copious pictures (hopefully you have pre-rental images as well AND walkthrough comments) and then take it out of the security deposit. My guess is it won't be much.

People have a false sense of litigation. Litigation in my uneducated experience exists to make people whole in cases where they are not. IF someone wants to spend time taking you to small claims court over a $300 security deposit damage cost, let them. You'll have your ducks in a row and a quick case. Worse case? Judge says meh, not enough here, give 'em $300. But the people who threaten to sue typically don't because they A) don't have the means and B) just use it as a threat.

Treat people equitably and fairly (I always ask myself with most decisions -- if someone sent this e-mail, made this phone call, took this action with ME, how would I approach it?) and you'll be fine. If they caused actual damage and you can prove it, charge them, get it fixed, and get a better tenant in.

Awesome - hold off on paint until you've confirmed the odor is GONE. Give it a few days even because it can come back. I have two cats and one was very territorial to start, so I know exactly what you're dealing with. They typically spray right along where the drywall meets the trim. DEFINITELY replace that trim if you can. If you need to, cut sections off of the drywall and replace it. When the drywall comes off you should see if you need any spray behind that...could also turn the insulation different colors. Better to spend the time/money NOW and fix that completely. If you move in a tenant and they have even a whiff of that (usually it happens after they move in) they're going to be pissed from the start and give you a hard time. I would also not rent to anyone with cats on your first set of tenants because those cats will pick up right where the last one's left off, negating all of the good work you're doing.

Without knowing anything about your properties or how you run your business, I forsee 3 possibilities:

1. Impostor syndrome

2. Greener grass syndrome

3. Actual problems with your business/rental

Lets take the third item -- if you don't have the cash flow you're looking for, mountains of problems, trouble sleeping, start to analyze if your problem is money, management, or both. I have a management problem in that I, personally, don't want to manage tenants. Just don't want to. I want to manage a PM, I want to manage contractors, but I have no interest in speaking to tenants. So, I know what my problem is, so I spend money to solve that problem.

Now if its #1 or #2, the only thing that solves perception problems is data truths. It goes back to my first point -- either you're hitting the goals you've set for yourself, or you are not. We cannot control the outside world, so we have to do our best to prep for it (reserves, insurance, proper operations) and keep our cool.

I take an (almost extreme) view of my properties from a data standpoint. I track every dollar. If I'm not meeting the goal I set for myself at onset, I try to find the gap, or seek to put my money in a better investment.

If you paid 40k or less for your properties, they're renting for $900 a month, you've got about 50% of that set-a-side for each property for various expenses per month (roughly...I'd like to do more...but lets start at 50%), you're paying all your bills, taxes, running correct and appropriate systems -- you should be good. The gubment is putting money in your pocket every month. Don't look a gift horse in the mouth -- make sure its well-fed, its groomed, and is content. Not many things are as close to a "sure thing" as that.

I came back to this thread since its blowing up my notifications (haha); @Justin Johnson what was the source of the smell? Are the numbers you provided ($1400 per month rent) based on both units being rented or just one?

Either way, make your checklist, start tackling items one at a time. Hire out what you need to. But the point is to close the gap between present state and rental state as quickly as possible.

You're in Boston and next to SF/SoCal its probably one of the hottest markets. It's going to be super competitive to find multi-unit properties that are good purchases. That market could change, but I doubt it will anytime soon. The influx of healthcare/pharma companies to the Boston area has jump-started a major property increase in values and dropped inventory.

If you're able to be mobile after college or have good seed money, consider close areas (especially via transportation) that are more advantageous for investors. I like the 1% rule as a good barometer for evaluating success in investing. A 100k house should rent for $1000 so find the areas where that is true (or hopefully better) and it's a great way to approach a house hack.

Nate - do you live rent/mortgage free right now? Consider this -- house hacking is a great way to get started because (assuming the property meets the criteria) you can buy for low money down, have someone cover part or all of your living expenses, have someone cover part or all of your home expenses, and have someone begin to build your equity for you.

If you're analyzing properties and the conditions are met, it's a great way to get your foot in the door. Saving money on your expenses allows you to save money in general -- $1000 you aren't putting down for rent or mortgage can be $1000 towards improving your current property or putting towards a building fund for the next property.

The negative cash flow is something to look at -- personally if I were doing this I'd like to keep my dollars in per month as low (preferably neutral) as possible. So if its negative 10,000 a year, for example, that seems like quite a bit to me.

I'll preface my response with I am an amateur investor, have never wholesaled, and don't know much about demoing, tree damage, etc., so my comment is more generic in nature. Take it with a grain of salt.

How much money could one realistically make on a property like this? I think the key to a wholesale property is good bones, bad cosmetics. You buy at a discount, sell for a discount but profit yourself, and the discounted price allows a flipper/investor to make their money. Happiness all around.

This property looks like its in a very rural location, with a piece of the house literally bursting at the seams due to tree damage. That side of the house is attached to another side. If it needs to be demoed, where's the value? The land in a super rural location? A demo gone wrong could drop the entire house. What about electrical, shared plumbing, gas lines? I mean there is a lot going on here. Unless you're picking it up for free, I just don't know where the value is. It would have to be at such an absurd price for you, because if I am investing in that property, chances are it would have to be an absurd price for me, too. :)