All Forum Posts by: Lesley Whitley

I keep hearing that if you want cash flow, buy in Ohio.   I have been analyzing small multi family properties in Toledo, Akron and Cleveland areas.  When I plug the numbers into the Bigger Pockets calculator, I am ALWAYS showing a negative cash flow.  Over and over again, a negative cash flow.  I have great realtors I that are helping me, but I am wondering what your experiences are getting cash flow in today's market?  Are property prices just too high right now?  We are ready to buy, but not finding any deals.  If anyone has words of wisdom, this fairly new out of state investor would greatly appreciate your help.

@Jack Smith I am looking for an Akron property manager and I would love to hear who you recommend staying away from.  It seems there are a lot of dubious property managers around there and I would love to save myself a potential headache.

@Holly Horn    We try to have tenants pay for as much as possible.  At a fourplex in California, we only pay for trash and water.  It has been frustrating to have to continue to pay for tenants water bills when they aren't paying rent and going through an eviction process.  Then just this last summer, one of our tenants decided to put an above ground pool in their fenced in patio (against lease, for sure).  Our water bill suddenly tripled and we thought there was a leak somewhere.  Plumbers were sent out, handymans sent out, and no one mentioned the pool.  We could not figure out why the huge water bill all of a sudden.  In the third month, I happened to go there to clean up and do some maintenance and I heard splashing from the yard.  So I looked between the slats and could not believe they had a pool!  Needless to say, they had 3 days to remove it.  I think if they paid their own water, they would not have done this.   Side thing to consider, when we bought our fourplex, each unit had their own huge water heaters.  We decided to switch them out for newer, smaller water heaters as part of upgrades.  Our water bill went down dramatically because tenants could no longer take 20 minute showers.  (That was a  nice side benefit we didn't expect)

@Robbie Young Firstly, thank you for taking the time to respond back with such a comprehensive answer. You brought up some excellent points and presented this info in an easy to understand way. Now I understand what was meant by a previous person about representing if you have to go to court. I love your illustration of the "baskets" , such a simple way to explain in a visual way. And I am starting to think that we could lump a couple smaller properties unti one LLC (especially as they don't have much equity in them now) and then move to separate LLCs if they get to where there is a lot of value or equity. Excellent advice and I sincerely send you thanks.

@Paul Barber. It is a great question. For me personally, in addition to the extra protection the LLC provides, there is a law that prevents us from having more than 10 conventional mortgages under our personal names. So by buying them under an LLC, that limit goes away. Additionally, some lenders that I would like to work with only do commercial loans, so I could work with them if purchasing under an LLC, rather than conventionally in my own name. I certainly am not an expert at all, and still have sooo much to learn. But these are the reasons that are prompting me to now consider using the LLC for my properties. Hope that helps!

@Grant Thompson    I don't know why I never thought to ask my property manager.  He loves our units because they are easy to rent out, but I will be seeing him to tour two new units next week and I will ask him if I have overdone the improvements.  Thank you for your forehead-slapping input.  I don't think I consult my property manager often enough until once I have listed the property with him.

When you get into doing a rehab ... whether big or value add cosmetic .... what criteria do you use to know when it is "good enough".  It is so hard for me to hold back on not replacing something, just so it looks newer or more trendy (for example, swapping light fixtures and door knobs when the ones there might be okay .... or wanting to swap all switches and outlets to Decora when the standard ones already there just need to be cleaned real good).  I try to remind myself that its a rental, not my personal home ..... but I want my places to look nice.  So, how do you make the decision on how far to go to earn highest rent but without going crazy overboard.  Any help would be greatly appreciated.

@Ryan Olsen Thank you for sharing all of this great knowledge. First, it was great to hear that not all states charge $800 per year like California does. That make it a little easier to swallow. And I had seriously not even considered evaluating the amount of equity in the property, versus evaluating the ARV value. That makes a lot of sense, and I could probably lump together a couple of my less expensive properties into an LLC until they start building up equity, then move them out and into their own LLC. Definiitely a lot of food for thought.

I also really appreciated your recommendation to look into Garett Sutton. I have never heard of him but I will be checking out his podcasts this afternoon.  I need to learn more about this process.  His website appears that he doesn't work in the states I invest in (other than Calif) but I will definitely check him out.  

@Bruce Woodruff  thank you for responding to my question.  I appreciate your input.  It just seems like such a lot of work for properties that have so little equity in them.  But I think you are right.

@Jennifer Marie Shanks thank you for your advice. Do you mean that every time you went to court, you had to find a lawyer to hire, whereas when the property was in an LLC, you just used the attorney that had helped you? I am trying to make sure I understand.