All Forum Posts by: Jonah Hartsburg

Wonderful! You are at an advantage; hold it as it potentially appreciates and the market rent increases, at which point you can reevaluate whether selling it as a flip or holding it would be more advantageous. 

At a minimum, assuming the cost estimates are correct or you can put in sweat equity to compensate, you should have a primary house with equity, no PMI as you mentioned, and little to no money left in the deal.

I'd highly suggest reading through chapters 14 and 15 of The 4-Hour Workweek. I'm sure there are numerous books dedicated to this subject, but Tim Farris discusses "Filling the Void" and some common auto-pilot habits people fall into once they have extra time on their hands after achieving their definition of success. 

Congrats! What a wonderful position to be in.

Thanks for sharing, Troy! This is exciting, and I do hope to hear how it works out. 

Similarly, I started investing while I was getting my license and have been extremely grateful to have it while growing my portfolio. The last time we moved primary residences, we were able to work in a bonus house plus commission, all while keeping the former residence as a long-term rental! 

Just from the details provided, the only thing I'd suggest is to keep closing costs in mind, both on the front acquisition and eventually the refinance. If the rental rate is sufficient, that's only if you want it to be an ideal BRRR with $0 cash left in the deal. What is the estimated rental value when the renovations are done?

 

 Yes, I'll send you a DM.

In an acquisition, the cap rate is the return on investment as if the cash invested is equal to the purchase price. The cash-on-cash return is the return on investment given a particular financing situation, or in other words, minus your mortgage payments. 

Capitalization Rate = Net Operating Income / Purchase Price

Cash-on-Cash Return = Annual Cashflow (or NOI - Annual Debt Payments) / Total Cash Invested

Hi Doug - I was looking through local posts and noticed this one had gone unanswered! I hate to sound like a broken record, but Stessa has features to track these data points. I assume your manager sends you a detailed monthly report that you could input to Stessa. With 17 doors, that seems a bit tedious. You could outsource this data entry or convert the owner statement to a spreadsheet and batch import. 

As others stated, I think communication, maintenance expenses, and rent collection are the top complaints. I'll add a couple more to the mix: the erosion of trust due to dishonest or deceptive practices, accounting errors with an owner's funds, exorbitant mark-ups on maintenance, poorly handled repair situations, extended turnover times between tenancies, and occasionally, just downright traumatic experiences linked to the previous management. I've picked up on this sentiment when owners express the need to "start fresh." 

I'd suggest starting by setting up a dedicated channel for your preferred mode of communication and letting your residents know about it. You could easily manage a significant volume through a free Google Voice number and an email address.

Considering that most residents lean towards email and text rather than phone calls, you can periodically check those messages or any voicemails left for you.

As your business expands, you might want to consider implementing an efficient property management software. This way, tenants can easily submit maintenance tickets online, and you can reserve the phone number for urgent situations.

If your business continues to grow and you find yourself reaching capacity, another option is to hire a cost-efficient, general administrative virtual assistant. They can handle the front-end communication, allowing you to focus on more critical decision-making tasks.

My insurance agent brokers with an insurer on my flips who is different than the insurer on my rentals. The policy just covers basic perils for the estimated value of the home. This approach suits me because my main focus is on safeguarding against catastrophic loss, rather than filing claims for minor incidents. 

Additionally, for what it's worth, I've noticed that my projects often extend beyond my initial estimates.

It's a difficult time for leasing in Indiana; Cold weather, holiday travels, Christmas spending, high interest rates on credit cards, and so forth. 

Below are some key alterations to increase the units' marketability:

Listing presentation - Photos, description, etc.

Listing syndication - Zillow, Realtor.com, Apartments.com, (dare I say) Facebook marketplace, etc. 

Lead processes - How quickly is the first response to incoming leads? What are barriers to an application being completed and are they appropriate?

Tenant requirements - Are the requirements too stringent and out of line with competing listings? 

Price - Naturally the top reason as long as the items above are reasonable. Can you settle with a slightly lower rate that would offset the expense of a longer vacancy at a higher rate? 

You could also offer rent specials, such as half-off a month's rent if the lease begins by a certain date, one month of free utilities, or a refundable application fee upon successful move-in. It's a numbers game coupled with a bit of luck. Keep moving forward. It only takes one person to get a unit filled!