All Forum Posts by: Johnny Hastings

There was an episode of Kevin Bupp's Real Estate Investing for Cash Flow podcast that discussed this exact subject in detail, with an expert; it was perhaps an hour long. If you could look through his feed of back episodes, you'd likely turn that up.

From what I remember, many of these types of folks are on some kind of disability, and they work through organizations that help them find housing and provide some financial assistance. You could do some digging and see if there's such an organization in your area. It seems like a rather lucrative niche to get into, if you could get tied up with the organizations that provide that assistance. 

Sorry for the somewhat vague response, but if you can find that episode of his podcast, then I guarantee you'd have all the info you want.

Hi @Michael Henry! The Point market seems rather over-priced. B to C class larger multifamily rentals go for over $90K per door. It seems a bit nuts. A new one in Point went up on LoopNet last week, and it's a decent example. It's a college housing property, so not the best example; I've seen 4 units built in the early 90's now filled with Section 8 folks where the seller was asking $94,750 per door! Things are more affordable (and sensibly priced) in Marathon county, which is where I have been focusing mostly. 

Have you looked into portable dishwashers? They have usable counter tops on them, and can work like small islands. When it's dish time, you roll them over and hook them up to the sink. Not ideal, certainly, but it's an option. What's on the far wall in that room? One of them could sit anywhere in there, and be rolled over to the sink when needed. 

I have a 12 unit in Mosinee WI, and this happens all the time! What's happening with renters here?! 

When anyone moves in, I have them sign a smoke detector notice. It effectively says that they'll be responsible for keeping it functional, and that if they don't want to or can't deal with it, that they will let me know so I can keep it functional. That typically means putting a new battery in it, versus taking it down and throwing it in a drawer. I'm not sure if that provides me any legal protection, but at least it shows that I tried to make them aware of it, and of its necessity.

I'd say that about half the time, when a tenant vacates, the smoke detector is gone (sitting in a drawer or on the fridge with no battery). It feels unsettling to me as well, and I haven't found a good solution to this. Whenever I'm in any unit for any reason, I make sure there's one present and functional. 

When I catch anyone without one, or they vacate and I ask where it is, it's always that same excuse: 'It always goes off when we're cooking.' 

I'd like to find a good solution this as well, though thus far other than paying attention to things when I'm in the units (which honestly isn't that often), I don't know what to do. I noticed at the store the other day that they sold some labeled to indicate that they won't have false (aka cooking) alarms. I am going to try one of those next time I have this issue, but right now can't say whether they'll do the job better or not.

Everything you've laid out here seems sensible. Here's some things that stick out to me.

Make sure you insist on inspecting each unit, don't take their word for the fact that they've all been updated.

You don't say it, but I'd guess the laundry income is from coin-ops? That number seems a bit high to me, but I've seen it fluctuate over time with different tenants. I have a 12 unit with coin-ops. The most I've ever pulled in a month is $350, but usually it's in the $200 to $250 range. I know it's small beans in the big picture here, but you may want to be more conservative with that one.

Insurance seems low. I have a duplex here in Central, WI, built in the 80s, in great shape, insurance is ~$1,400. You could call for a quote on that. It'd be a good time to meet and get a relationship going with an insurance agent if you're going to get into this business!

Your assumption on the water bill is correct. Do a google search on a RUBS (residential utility billing system). That's what you're looking for there.

I don't know if snow removal or landscaping are worked into property management contracts or not, since I've been self managing. I can tell you that plowing isn't cheap. I have an 80' drive with a small (4 car) parking area at the end, and every time it snows over 2" I get charged $55. That adds up quick, and really gets in the way of winter cash flow! If you're living there and doing this yourself, obviously it doesn't matter, but for future calculations you should consider it. If you want an exact price, call a local plow guy; have him swing by and give you a quote on the property you're considering. At least you'd have an accurate number for that for future reference.

I think you're correct that you aren't going to get the place for 33% off asking price. That scenario doesn't seem plausible. 

What's the condition of the roof? Considering all the things you've noted that the current owner has replaced, you may be able to cut the CapEx and maintenance expenses down a bit. Seems like some of the main cost culprits have been handled, at least for the time being. If you're doing remodels, perhaps the up front cap ex should be higher, then reduced once you have funds for those.

I think your last scenario of rent increases and value-add ideas all seem legit. You may have to cycle tenants through to get the increases to stick, but that's the business. I've never yet increased rent over $15 a month and not had the tenant leave, lol. I have a row of single car garages for one of my properties. The garages have space for a car or midsize SUV, and a bit of storage space in front, aren't heated, and go for $55 a month. Our climate may make a garage a bit more desirable than yours, but I think at $25 you're selling them a bit short there. 

As a preface, I have a bunch of C class apartments. Occasionally someone leaves without paying their last month's rent, I evict someone, or some other situation arises where a tenant has moved out while still owing me money. I typically just let it go. If I evicted them, I do go through a damages hearing and docket the judgement right away. Even then, I've never recovered any meaningful amount of money in these situations.

I recently got a call from a guy that runs Credit Management Control. They collect from people in these situations. 

I just had a situation arise today where a tenant is moving out, and hasn't paid December's rent. Also, she's on a month to month lease with a 60 day move out notice. That means that if I don't find a renter, she's on the hook for January and February. She claims she's moving out of state. 

I'm going to go file for eviction, mostly out of spite really, lol, as it's one of the only things I can do to her. I'm also going to try the collection people I linked above. 

So my question is, has anyone used this type of (or this exact) service before? Is it at all effective? I know in some cases it wouldn't be, because it'd be like the old 'trying to squeeze water from a stone' situation; where the tenant doesn't have any money, so it's a waste of time. This time though, I think she's good for it. 

Once all this plays out, I'll update this post with the results. In the mean time, any info anyone has on this type of service is appreciated.

They apply to property taxes.

The land assessment amount is what the county will tax you on for the land itself. 

The improvement assessment amount is that the county will tax you on for structures (called improvements) on the land. 

So you add both of those values up, multiply by your county's mill rate, and you'll get the annual property tax amount. 

Seems to me that the Tax Due amount is the tax for the year. It may be reflecting a remaining amount; depending upon whether the county is updating tax records frequently, and the current owner made a partial payment. 

You can typically find the mill rate for your county somewhere online (it's likely listed on the tax page you were looking at). You can determine annual property taxes by multiplying the mill rate by the assessed value.

I've never seen a Taxable Value listed separate like that. Typically Assessed Value is what you're taxed on. The Assessed Value will often be broken down into the Property Value and Improvement Value. Perhaps that $19160 is the assessed land value? 

Can you take a screen shot of the tax page and post it here? It would be much easier to make sense of it if we could see what you're looking at. 

A quick google search turned up this. 

Essentially, when you depreciate an asset (which you do with real property (rental real estate for instance) and attached non-real property (appliances and such) every year on your income taxes), you've offset your taxable income. You can do this for a certain number of years, dependent upon the type of property. When you sell that asset, you have to pay back the taxes you offset over the years of ownership. The sale of that depreciated asset is where the 1031 exchange comes in, to further offset that tax. You essentially swap the depreciated asset for a new asset or assets, using the money that you would have paid in taxes to make the new purchase. Then you depreciate the new asset, rinse and repeat! If you ever decide you want to walk away with cash in your pocket from the sale of an asset, you have to bite the bullet and pay the taxes. 

Seems like you've done everything right, except the project completion timing. The house looks amazing! Well done.

In this situation, I'd say trust your agent. She active in your market, and certainly knows it better than anyone on here will. She recommended not lowering the price, as she doesn't believe that will net a sooner sale. The question seems to be do you take it off the market, or let it ride to the new year. By the stats on Zillow you're getting lots of hits, and even lots of people have saved the home. I'd let it stay active. Just because no one wants to make a move right now, doesn't mean people aren't looking. Once the holidays are over, things should pick up. Also, perhaps someone will come along in the meantime. 

Stay confident! Like I said, the place looks amazing. If it wasn't in between two major holidays, you'd have certainly had offers by now.