All Forum Posts by: Keith Jablonowski

Has the water heater been drained of sediment recently?   

Are a lot of people in it for themselves, and will give you advice that will benefit them, of course, that is human nature?

Does that mean that buying an investment property is not a fundamentally sounds investment, absolutely not. 

You need to buy the right property. If you think you can look at 5 properties on the MLS and find a "good" investment, you are delusioned. The investors I know finding properties on the MLS are making 30+ offers a week, embarassing offers, in hopes of finding 1 or 2 properties a month.

Others are door knocking, cold calling, spending money on mailers to find off market properties.  

It is definitely not "passive", but it is still a great investment vehicle.   If you can't find a property that cash flows with real underwriting numbers, 8-10% vacancy, 8-10% property managment (whether you do it yourself or hire someone, you still need to account for that time/expense) then don't buy it.  

In 20 years, look back at these agents, lenders, etc that didn't buy rental properties themselves and I guarantee they will be kicking themselves for not doing so.    

I'm a property manager now so it does benefit me when someone buys an investment property and hires us, but I have never changed my tune on telling someone to buy the right rental properties, did that way before when I was just another investor.  

You got it covered in a nutshell.   The operator is taking all of the risk in purchasing and rehabbing the property, handing it off to you fully rented and hopefully in good condition where there are little to no maintenance expenses at the beginning.  You are giving up most of the equity for taking no risk and doing no work. 

You are hopefully getting good cash flow, appreciation, mortgage paydown and tax benefits. If you are new, working a full time W2 and want to get started in REI then these can be a good way to do it. You need to vet the operator, but also do your own due diligence. If they are not good at property and asset management your "investment" could become a money pit with vacancy and repair expenses.

Make sure the ARV, rental rates, taxes, etc are what they are claimed to be. I would also advise doing your own inspection of the property to make sure that everything that they say is being done is actually completed and to code and that there shouldn't be any surprise maintenance costs at the beginning.

Numbers are very specific to the market you are looking at.  

Anyone can sue someone for any reason or no reason at all.   There is nothing illegal about Subject To, Seller financing, etc in general.    Would be curious to know what the exact details of this lawsuit are?

Based on the lack of any information outside the number of units and downpayment I would have to say you are completely under thinking this deal....

Regardless of SFH or Small multi-family (under 8 units) deals that come onto the MLS are going to have tons of competition right now and the price will show it. You need to find off market deals. For small multi-family one method is to find tired old landlords. Drive around look for For Rent signs and unkept buildings and call the owner. If the number on the sign is the owner, bingo, you probably have a tired landlord.

Larger multifamily will not have the same retail markup, but even those right now have so much competition that most are not selling at a PP that is justifiable to an actual investor.    There are properties to be had but they are not easy to find.  

Also if you are able to find an owner that will seller finance you can get a rate lower than the retail lending rate and make the higher prices easier to underwrite and make money on. 

Prior to closing I guess he could.  What does the contract say about breaking the agreement prior to closing?

Lots of details missing, property class, location, etc.   Cash flow is low for 4 units IMO.  Try to shoot for $100/unit/month absolute minimum.   

 IL just made it illegal to disqualify a potential tentan based on if they are an illegal alien or not.   Not sure how you would properly screen then if they are here illegally though.   Another on the long reasons I live in IL and own rentals in another state. 

https://www.mystateline.com/news/local-news/illinois-law-requires-landlords-to-rent-or-sell-to-noncitizen-immigrants/#:~:text=Illinois%20law%20requires%20landlords%20to%20rent%20or%20sell%20to%20noncitizen%20immigrants,-by%3A%20John%20Clark&text=SPRINGFIELD%2C%20Ill.,the%20Illinois%20Human%20Rights%20Act.

When we started out investing we were both working full time plus (60+) hr a week jobs.   Our property manager basically handled everything.  We would only get a phone call, email or text if a surprise repair popped up over $300 or a turnaround was needed (they would consult on any potential upgrades during the turnaround).   They handle finding tenants, leases, collecting rent, repairs, evictions, code notices, rent increases, even submitting property tax assessemnt paperwork to the county.  They also help find new properties when we are looking to expand. 

Their rate is at the top end of what you typically see, but the freedom we have to continue to work full time bringing in new money to chase other investments with is well worth it.   

Just make sure your agreement spells out EVERYTHING that this particular management company will be responsible for.   Some charge a flat rate on collected rent.  Others you pay them maybe a little lower rate but they take the 1st month rent and/or deposit on every new tenant.   Depending on the average stay of tentants in the types of property you own one over the other may be better for you.  

My opinion is if you want to be an investor and not a landlord then a quality property manager is your most important asset.   Until one day you own enough properties to start your own property management company.