All Forum Posts by: Kimberly T.

Future parent here.

I kind of disagree with some of the answers, like Jon mentioned above. For example, interest rates ARE a bargain right now - as long as you're using them to get a good ROI. And it IS ok to use debt/interest to acquire assets that appreciate (like houses), that also give you a ROI. This is called leverage, and can help a young person like me build wealth and income much faster than paying for an investment with all cash.

It seems like this thread is more about flipping than buy and hold type purchases, but I just wanted to throw this out there:

It's also a lot harder to find cash flow deals for us buy and hold folks. I'm sure a lot of it is investors who are willing to accept a lower ROI than they did a few years ago. However, I speculate that perhaps some of that is people doing 1031s. If you sell one property for a GRM of 16x rents, and 1031 it into a property with a purchase price of 13x rents, you can be improving your ROI even though you're still paying "too much" according to my rule of thumb (that being, don't buy for more than 10x rents). So in that case, an investor sees you paying 13x rents and says you're paying too much, but in actuality, you're getting a fairly good deal because you're improving your ROI.

Just a thought.

Wow.  Well, to be honest, they're ignorant.  You don't need to tell them that obviously (nor should you), they're just saying all that out of ignorance.  There was a thread here on Biggerpockets recently about friends/family calling people slumlords, you should find it and read it. :)  Lots of us get called slumlords and the like by people who don't know a thing about being a landlord (or worse, who tried being a landlord and failed themselves).  Investing for your future is a great endeavor, and should not be insulted.

As far as going to college to become a CPA and then quitting, well, I'm in a similar boat.  I went to college to become a structural engineer.  Graduated, got my civil engineering license, and then my structural engineering license.  Once my husband and I have kids, though, I'm going to become a stay at home mom (and also manage our rentals).  I may still do some part time engineering from home, but our whole purpose of investing while young was so that we could for me to be a stay at home mom.  Becoming an engineer was just a means to an end, but it's also a great back-up plan in case something goes wrong (like if my husband becomes disabled and can't work, or we have a financial catastrophe and lose some or all of our rentals).

We are looking to have the kitchen cabinets in one of our Scottsdale apartments replaced.  We want decent quality (plywood boxes), but it doesn't need to be fancy, just looking to update the kitchen for a good price.

Anyone have any recommendations for a contractor they've used, or a cabinet supplier who can also do the install?

My husband and I have bought a triplex and 3 fourplexes in the past 5 years (so, 15 units total).  It's becoming much harder to find good cash flow deals now, so while we're still watching what gets listed for sale, we figure we probably won't buy much (if any) more until the next recession (with the exception of likely doing a 1031 to get rid of our CA triplex).  We have conventional loans on all of them, as well as our house, and we still only had to put 25% down on our most recent purchase (6 months ago), not 30%.  We also have stellar credit.

Whether you can expect $1000 cash flow obviously depends on the rents, taxes, insurance, maintenance and cap ex, etc.  We're not getting that kind of cash flow on any of our rentals (we own in CA, AZ, and CO, so we're not just invested in high-appreciation, low-cash-flow areas like CA).  I wonder if your cash flow estimation is perhaps overly optimistic.  Maybe you could give us your expected numbers and you can explain how you're arriving at that expected cash flow.

 Mom?  Is that you?

Seriously, sounds like my parents.

Landlord is spelled L-A-N-D-L-O-R-D, not M-A-I-D.

Never have I heard of a landlord providing free maid service.

My husband and I were just discussing this scenario this week, as we will be redoing a kitchen in one of our rentals next month.  I was looking up various websites about this question, and it seems like it depends on what type of flooring you're putting down.

We have opted to put the floor down first, then have the cabinets installed, because we are doing tile.  There's no reason that we'd expect to be replacing the flooring before the cabinets because tile is durable (no scratches/dents or other issues like with vinyl).  It's much easier to install the tile before the cabinets so we don't have to make a bunch of cuts around the cabinet bases, and we don't have to put quarter round down to hide the cut ends.

As others said, though, if you're putting down a floor that you're likely to replace before the cabinets, it might make sense to put it down after.  I like the idea mentioned above about laying the flooring up to the base, then putting the toe kick on over it.

One thing I was reading about was that if you're putting down a thick flooring (like solid wood), you need to account for that by shimming the cabinets up.  The flooring will go under the stove and dishwasher, so you need the heights to match up properly so everything still fits together right.  If you don't shim, the top of your stove will be too high, and the dishwasher may not fit inside the opening.

Well, we bought right around the bottom, back in 2010. Picked up a triplex with some modest cash flow, and have been self-managing it since then (it's just a few miles from our house). Even then, it was tough to find properties where the numbers worked. Since then, we've raised rents a little on each unit, increasing our cash flow. It's still not that great for ROI, but the appreciation has obviously been tremendous. Since we plan to sell and leave CA in the next few years (might even sell the triplex within the next year as part of a 1031), we figure we struck a pretty good balance between cash flow and appreciation.

Since then, we've bought rentals in AZ and CO. We make better ROI on those, though less cash flow in terms of dollars.

As others stated, you need a landlord policy.  It's kind of like a homeowners policy, but for non-owner occupied dwellings and typically doesn't cover the personal possessions (furniture, etc.) inside the dwelling.  You'll want liability coverage (we get a minimum of $500k/property), property coverage, and lost rents.  If you just call up some insurance brokers and explain that you're buying some rentals and need an insurance quote, they'll know what you're talking about and they'll know you don't want owner-occupied type homeowners insurance (but not all insurance companies do these types of policies).

An umbrella policy provides you liability coverage above and beyond what your individual properties' policies cover.  For example, we own 4 rentals, each with their own insurance.  Then, we have a personal umbrella that covers our stuff (so if we cause a massive car accident, they won't sue us because they think we're worth lots of $$$ and make us sell our rentals, they'll just go through our personal umbrella), and a commercial umbrella that covers our rentals (so if we have a major loss with a claim higher than our liability, the umbrella kicks in up to an additional $2M in liability).

Hope that helps.