All Forum Posts by: Kevin Kroll

Not explicitly what you are asking, but had the friend considered making offers with larger than typical earnest money, and without a financing contingency? 

Basically to be able to tell sellers "look her is $20k in earnest money, and since I don't have a financing contingency if I am unable to secure financing you will keep the $20k and be able to sell to someone else"

Everyone seems to be commenting on the difference between Duplex and Quad, so I will comment on what to me would be the more important difference: price point.

The duplex is renting for $1,200/unit, where the quad is renting for $625/unit. These are very different price points, and are going to cater to very different populations of tenants. A lot depends on your market and what you are looking for. 

$1,200 might be really on the high end for your market leading to higher vacancy rates, which is particularly painful as having just 1 unit vacant means the property is 50% vacant. This might not be high for your area and might not be a concern.

$625 might be pretty cheap for your area, which could mean you have opportunity to improve / raise rent, but it also might mean you are dealing with a tenant population that is a bit tougher to manage. I know in my area I would not want to be invested at this price point as it would lead to me having to accept tenants with lower credit scores etc. 

Plus, if someone puts a hole in a wall or ruins the carpet those things costs the same whether it is in a $1,200 unit to $625 unit. I'd rather have the $1,200 unit with a $1,200 deposit to pay for damages rather than a $625 deposit.

I have laminate as the primary flooring in 4 of my townhomes, and have had good experiences with it. I have gone based on appearance / cost, but have been laying on slab floors so have gone with pre-attached pad.

I wouldn't be too concerned with getting a premium product. If it was a house you were living in it would be more important b/c of noise / foot feel, etc.. But these aren't things a perspective renter is going to notice during the brief time a showing takes. 

you can set up auto alerts on sites like zillow looking for "multi" as a keyword. You also have to be realistic about where you are looking and whether or not there is a population of multi-family properties available.

For example in Augusta, GA there just aren't a whole lot of 4 unit buildings. There are some, but many many more SFRs and then large complexes.

you could also look at doing a cash out refi or LOC and using the proceeds on the apartment complex. This would save you the ~10% costs associated with selling a SFR, and also a more predictable timeline.

agree with everyone else on treating pet fees as income. I actually refer to this fee as "Pet Rent" in my leases to remove any possible interpretation

highly dependent on the details of all 3 options, as well as your personal background / what kind of role you want as an investor.

Do you have lots of time? experienced with renovations? relationships for cash out refi w/o seasoning period? all benefits for option 1.

2 vs 3: what does the cash flow look like? is there a multi available that fits your goals? are there 3-5 SFRs available? multi would be centralized so units aren't geographically dispersed. SFRs might be easier to sell at a later date.

Lots and lots of variables, so its hard to answer, you just need to approach your decision in a logical and systematic way.

P.S. for me and my personal situation, I'd go with #2 all day long. I just closed on an SFR last month and looking to close on 3 more this year for total of ~100k invested in SFRs this year, so living that approach.

I look for a refurbished higher end brand from a local dealer.

If they don't have what I am looking for in stock, and I have to buy new, I buy Frigidaire from Goedeker's as they include good warranties and you get free shipping, and no tax

I self manage, and if the concern is time constraints I'd focus on building systems that minimize your time commitment before looking at a PM. Stuff like:

• online payments so not having to go to bank to cash checks
• online applications
• e signature leases
• directory of contacts (plumber, electrician, appliance repair, etc)

Always be thinking in terms of absolute costs. As an example it might not seem appealing to offer current tenants a $200 incentive to perform weekly "open house" showings from noon-2pm on Saturday until re-rented, but when compared to paying 1 months rent of $1000 to a PM it sounds pretty good!

Likewise, if you are doing 5 turns a year, where you'd be paying $5k to a PM for performing the turns, you could alternatively set up digital locks, and allow self showings, keeping the $5k in reserve to cover potential damage associated with this approach.

I'll be the contrarian voice, as this is something I have done several times. It is all a calculated risk assessment. High probability of small benefit, very low probability of HUGE loss. It's all very individual, and depends on the specific property, and the specific owner.