All Forum Posts by: Jon K.

My rental portfolio had a tough month this month. Out of 19 rentals, I had to replace an entire HVAC system, a furnace in another property, a flat roof, a refrigerator, and a dryer. I also had three vacancies and two non-paying tenants. On the surface, this objectively sucked.

This is the first month in a very long time that my cash flow isn't covering the mortgages. And that's fine, because I have reserves and this is a long game.

Now that the month is coming to an end, I had the urge to add up the principal portions of all 19 of my mortgage payments. What I found was despite all the challenges, when you include debt pay-down I only "lost" $678.31 this month. That is truly incredible. I think it's easy to get lost in the grind sometimes and it's good to take a step back and appreciate what you have accomplished.

The Book on Managing Rental Properties by the Turners

You can establish a HELOC on investment properties, not just your primary residence.

Regardless of how good of a job the flipper may have done, periodic repairs and capital expenses like a new roof every X years are part of owning a rental.

Whether or not this property is a "good" rental is subjective and is based on your own criteria. What I would encourage you to do is to compare how much cash you currently have invested out of pocket in the deal and also calculate what the cash flow is for that property.

Cash flow is the income (rent) minus all expenses: mortgage payment (including principal, interest, taxes and insurance), average maintenance costs, capital expenses (new roof, hvac, water heater. Average this out to the best of your ability to a monthly amount), vacancies (you don't collect rent when the unit is empty, and also there's a cost to prepare the property for the next tenant), and property management.

Then, calculate your cash on cash return. That is, how much cash flow are you receiving per year, divided by how much cash you have in the deal. That number will give you something to compare to other investment vehicles that will tell you if this capital is better put somewhere else (if there is actually capital to deploy after a sale). You also have to take into account things like depreciation which will offset some of your gains come tax time, appreciation (the natural appreciation of real estate tends to track inflation), and debt paydown (over time your tenants will buy this property for you because part of their rent pays your mortgage).

Rental properties CAN be an excellent vehicle to build long term wealth. If you're 25 and have a 30 year mortgage and the cash flow is acceptable to you, just remember that you'll own this property free and clear by age 55 unless you pull equity out or refinance the loan.

If you sell the property now but don't have the money to fix the roof you could either sell it "as is", or give the buyer a concession off the price to replace the roof. If you choose to go this route, talk to an agent and they will be able to better advise you as to what to do.

Hello Josh. My advice is to find an investor-friendly title company and talk to them. Many are owned by or employ real estate attorneys that will know the local laws in that respect. Often times they are willing to provide free advice (sometimes even in the form of a sample contract) in exchange for your business down the road. Hope this helps.

Hello @Aidan Holroyd, I'm an investor (that also wholesales) in Baltimore Md and am active in all the markets you mentioned in your title. Happy to collaborate. I'll send you a PM.

I've never used investor lift, by why pay to dispo? It's not hard to build a buyer's list. Every major MSA has multiple Facebook groups for investors and meetups where you can find buyers. You can also use a tool like propstream to find cash buyers in the same neighborhood as where you got a contract.

My personal experience was that there is a difference between a "Regular" accountant or bookkeeper and one who understands real estate. Years of headaches and thousands of dollars in expenses from having someone untangle what the last guys did later, I can now confidently say to seek out those who have real estate knowledge.

Check out https://foreclosuresdaily.com/. Can PM you a connection to a rep there if you'd like.

Check out The Only Woman in the Room: Knowledge and Inspiration from 20 Women Real Estate Investors by Ashley Wilson.