All Forum Posts by: Mark Hughes

Call the Po-Po!

Own. Just can’t seem to make sense to pay rent to someone else....not in my market and current life phase.

welcome to REI and BP. I'm in ABQ, let me know if you have questions.

very interesting.....lots of times people are paying way less than the FMR though, so it might be a little more dramatic than needed, but definitely lots of good points here...

welcome and good luck!

Looking forward to listening!!

I prefer longer lease terms but often they fall into M2M and many states have different laws surrounding this....for example, they sign a 1 year lease that states after the lease term they automatically fall to a M2M after the lease term if neither party renews new lease term or notifies to terminate the term. So the owner/landlord is hoping they will renew for another year but the tenant says, nah, I’ll just stay month to month. At this point the landlord can jack up rent but that might piss them off and send them away anyways to initiate vacancies....or they can say, alright we’ll just see how long they stay as is until they give notice. Depending on your state regulations, you might be able to put a rate increase regulation that every so often (ie each year) rent increases by x% so this way you have some leverage.

I would analyze it to include the replacement rent once you guys move out because your true return of that property is providing you the utility of that rent (so if you lose $200/mo but would be paying $1,000/mo to rent elsewhere, it’s in fact a solid investment and you can ‘save that extra net +$800 towards increased principal pay down or save for another down payment. Still account for maitenance and vacancies as you would see on the other units of the property but the goal would be for you to move on to another one at some point and of course you can always stay there if you want.

Yes, most of the sketchy areas always cash flow better on paper. Try to mitigate risk on the buy side by finding a really great deal. Of course everyone tries to find great tenants and screen then but it’s easier said than done and also you will inevitably end up with some sketchy situations and tough decisions ahead (ie. It’s like mike Tyson said, Everyone has a plan until they get punched in the face....speaking metaphorically here, but you never know!) just be ready for anything and keep the long term goals in mind!

Listen to some BP podcasts, but be ware as there are 250+ so don’t get consumed listening all day to too many. Try to narrow your focus into your interest and get your feet wet.