All Forum Posts by: Ke Nan Wang

LOL love @Eliott Elias's enthusiasm,

I would agree 99% of the time. 

However, if you are a go-getter and DIY property owner and would like to save PM fees, just knowing that there is the suboptimal way of property management and there is the try and true industry standard best practice of property management. You can "save" a few bucks, maybe initially by doing #1, and really spend your time and develop the skills, learn the systems to get up to a professional PM level. If that's your intention, you want to do it to save some money, knowing you may not be doing it at the optimal level, can afford to learn some costly lessons along the way, you can do #1. There are countless people around the world are doing #1 and not being a professional PM, the chances are, you can too. The benefit of DIY long term property management is that, unless you are extremely unlucky straight out of the gate, most of the time, the lessons/sticky situations come very slowly, sporadically, which allow you time to learn. There aren't that many emergency situations in the PM world. So you can take your time. And most of the time, if you place a good tenant, you are pretty much on autopilot until the lease come due so the PM fee you are paying it's simply an insurance.  

With that being said, no one can put 10 years of experience, attend property management seminars, constantly studying, refining people reading skills, people management skills, implementing best property management systems, updating their knowledge on laws and policy changes, etc in a short post. There are good book and free online courses on this subject too. So if you are an aspiring DIY landlord and don't want to pay, we would also expect you to do your homework, study up, and only come for some free advise AFTER you have done your homework. Not expecting us to do your homework.  

Different municipalities have different policies. In my municipalities, the utility bill stays with the tenant when it's under their account. Even when the tenant moved out and didn't pay their last bill, our municipalities chase after the tenant (or the account with the person's SSN). In the past my lease had a clause that in order for the tenant to get their security back, they have to send me the paid receipt of their last utility bill. It was a clause I borrowed from a lease that was from a different area. After I learned how my municipality does business, my lease no longer has that requirement. 

Usually if the tenants don't pay utilities, the company will shut it off. So if they want water/power, they have to pay. 

I guess if your municipality puts a lien on your property before they shuts off the utilities, then maybe you do need to take control of it and bake that into the rent.  

Imagine this, if you have $5M, there comes someone you don't know, and asked you to fund this deal, would you lend your money to "yourself", who has no experience, no network/people connection, no track record of successfully managing similar budget projects, no money down, no skin in the game, passable credit score, haven't done a single family development project, let alone a multimillion dollar undertaking. 

The answer should be very obvious. 

There is like 99% of the things involved to pull off a project like this you aren't even aware of, hence you are asking this question. 

In the realm of possibility, can you be the one out of the billion to pull of a project successfully within budget, on time, profitable???? It's possible. But would you bet $5M on a 1/billionth success rate outcome? I doubt it. 

We are all young and naïve before and I don't fault you for dream big, but there needs to be a reality check. Here are some constructive advises for you: 

In order to get funds from any savvy investor who has earned that kind of money, if your project pass the sniff test (it currently nowhere near does), they will examine your project more closely. Also just imagine those people get pitched by many other people with investment opportunities too so you are just one of the many. So now you need to think in terms of, how am I going to present this deal to them to get their attention? 

Do you have a track record of past success?

If not, are you bringing someone with a track record of past success? How is your business structured with your partner? What contribution do you bring to the table? 

How much money (skin in the game) are you bring in to the project? If you aren't bringing anything (creative finance people would love to preach use other people's money), what's preventing you, if things go south, simply walk from this project and leave everyone else money hanging? This is one thing creative finance people don't discuss enough. Who is covering the risk? Are you just scamming people at this point? Basically convince people they will get something, sure when things do well, everyone gets paid. What happens if things don't go well? Do people who pitched in the money just get screwed? 

If you have the above two and the investors are still interested, then they might look at your plan and do a feasibility study and see the likelihood of success and whether they will lend you the money. Usually it's probably 60% for a project like this big. 

Hopefully this brings some insight to your plan and there are much more to do and hope you do take initiative and become successful and come write a story here to prove me wrong. 

I use neither because I do this everyday and have real data from my local market. 

I just tested one of my vacancy unit with the BiggerPockets rent estimator and it's not accurate. 

I've listed for $2250 and now lower to $2190. 15 days on market today so it's kind of slow for me. BiggerPocket is showing around $2500. I've also seeing them using comp that's from my 2020 listings. I didn't see anywhere they let me to set the time window for the history of listings. 

In reality, it's a general guide but to get a rent comp, just open up zillow and pretend you are a tenant poke around and see what's available on the market. That should be a reasonable comp for you. If you see a listing that's above the average listing, check it out and see how long has it been on the market and how many contacts/applications. If you see similar comps on the market that's consistently less than 30 days on market, then you should feel pretty good about the general rent comp. If you see lots of rentals on the market that's over 30 days then you need to concern about your investment move.

If you are trying to figure out how much rent to list, unless your place has lots of amenities that attracts tenants, I would start with something that's either equal to or lower than the median rent price in the neighborhood. If you have a premium property, start with a premium price with maximum curb appeal and professional photographies. If you aren't getting showings, then start lowering your price. 

In real estate, everything is fine until it’s not. Ultimately you, the investor is responsible for your own investment. You can blame others for their mistakes, you can discipline them, fire them, try to work things out. But in the end, if all things failed, you accept the mistake and write it as a lost, learn from it and move on. 

I don’t expect the cost of the repair is worth to hire an attorney for. If not, the best you can do is to work things out with people outside of the court. If you go into a situation pointing fingers, you will make others become defensive and accomplish nothing. 

Or you can bluff and threaten to sue, just not my style. 

I would write it as a loss and do better hiring the next PM. 

Nicely done Joe. 

I'm just curious would you improve your purchase price if you have worked with wholesalers in your market. 

I used to only purchase investment properties from MLS. This year, I've started to develop relationship with a number of reputable wholesalers from my market and I was able to get many more deals where I simply can't find on the MLS.

I kept telling myself "only have I knew this before.."

Nowadays I rarely buy stuff from the MLS because they just look so "retail" to me :) unless they are in a killer location and I don't mind paying premium for.

Nevertheless, congratulations and well done!

sorry this is happening to you but no matter what, the PM is done and needs to be fired. You need to cut loss right now and move on. 

Several way to do this:

1. Find a new property manager, hopefully you've learned your lesson and be able to find a decent one. Depend on the state, the PM can initiate eviction right away. Or you can find a real estate attorney who's specialized in eviction. Once the old tenants are out, go in and make it rental again and reset with the new PM. 

2. Maybe this is a bad deal, the next time a wholesaler contact you, or you find a wholesaler who's willing to purchase the property with tenant in it, take the cash with the loss and move on to something else. Just be wary of wholesalers, it's prefer to have them as end buyers. Some wholesalers also do flips as well. If all they do just take your property and go find other buyers, you probably can get a little better deal with listing it with a real estate agent who's specialized in this type of properties. Needless to say, don't use your current one. 

DM me if you have more specific questions. 

In a case the appraisal is high, nothing happens and the lender will lend the buyer the loan amount and all parties proceed with the transaction and the buyer would feel good about the purchase because there is instant "equity" in this purchase.  

In a case the appraisal is low, the lender will readjust the loan amount because the value of the property is not what it said it was. The buyer has a few options based on the contract: 

1. If the buyer still wants the property, the buyer can either 

              a. renegotiate the purchase price with the seller. Maybe find a happy medium where the seller's willing to reduce and the buyer can bridge the new reduced gap via cash to the table. 

              b. if the seller is firm because the seller believes the appraisal is wrong and there is no problem finding another buyer, then the buyer has to bridge the gap with cash 100%. 

              c. if time allows and buyer believe the appraisal is wrong, challenge the appraisal or even find another lender with a new appraisal and pay for all the additional cost out of pocket. This is a less likely scenario out of the 3.                

2. If the buyer doesn't want the property anymore, then the buyer can cancel the contract and then either lose the deposit or get the deposit back depend on whether there is an appraisal contingency clause in the purchase and sales agreement. In the Florida standard form, other than the AS-IS contract, the rest have the appraisal contingency as a standard clause. Also FHA and VA addendum has that language in there too. It's meant to protect the buyer.

I think Jacksonville we have JWB, Nestfinder, and Locklear Partners & Property Management are the big players. I think all of them can do a solid job for you. 

I disagree. Location gives me potential, we high potential, I'm more willing to invest in to the property, keep it nice, attract nicer tenants. It's not absolute, but the odds play way more in my favor. 

In bad locations, we tend not to put money into the property unless it's absolute necessary. It attract less quality tenants and with less pay, we are less motivated to maintain the property. 

Over the last three years, we did not expand to increase our number of units. We focused on optimizing our portfolio. We sold the properties in bad areas, bought lots and built new constructions in nicer areas. Overall, the number of units in our portfolio stayed more or less the same, but our cash flow has gone 2.5x. My headache went way down. 

This is coming from an investor who currently own 30+- properties and I've rented as low as $500 a month to as high as $4400 a month. Yeah I can get rid of all my sub $2000 a month properties and focus owning $2300 a month properties all day every day. In the right location, the properties were the first ones to appreciate because they are in highly desired neighborhoods vs the hood. Sure the properties in the hood may give you better returns percentage wise but appreciation over the years dominate that little cash flow any time.