All Forum Posts by: Leslie A.

@Adriel Hsu I had a similar idea. My issue is a tiny home (classified as a trailer) is illegal to keep on a multi family property (which is what I own). I had talked to a few other investors and tiny home builders within 1.5 hours of htx but only know of one guy actually doing it inside the loop and it's at SFR

Records of the previous owner is a good idea if you can get it. Otherwise, it's just a matter of experience. If you have a general idea what percentage is typical with other properties in a particular market, that's a reasonable place to start, but then you still have to adjust for the condition of the property (and other attributes such as how many bathrooms). A general rule of thumb I was once given by an agent (in a market where buildings tend to be 100 years old) is $1300 for SFH, $2300 for duplex, $3050 for triplex, $3800 for 4-plex, and $750 for each add'l unit -- annually. Personally, I think these are high, but I start by thinking about these numbers and then adjust downward according to the condition and thinking about of what things might go wrong, or what things have already been replaced or repaired. There's no simple answer, but just using a blanket percentage will result in the wrong number more often than not.

All right.  That makes sense  Thanks for the info  

First, congratulations on your success by being creative where nobody else could see a good deal at approximately asking price. What a great accomplishment!

I often see people using a percentage of the gross rents as an estimate for repairs & maintenance. That doesn't make sense to me. Better to just estimate a dollar figure. If you have two similar properties and one has higher rents than the other, is there a difference in repair costs? In fact, the more you've updated a property, the more you collect and the less is left to repair. If you buy a property in barely rentable condition and charge $600 rent, then you update it significantly and then charge $800 rent, should your estimate for repair costs increase or decrease? Or for that matter, should repairs be the same percentage of rent in Seattle as in Michigan? I don't have a good number to tell you to estimate (it depends on the condition, how may things can go wrongs etc.), but it shouldn't be a percentage of the rent. 

 You have to get a dollar figure from somewhere. Getting the records of the previous owner would be one way and a percentage would be another way. What do you suggest?  Pulling a figure from the air?  

@Marvin Bobb. I opened a bank account very close to the units and had them deposit it there. If they requested, I sometimes picked it up if I was going to be in the area.