All Forum Posts by: Michael Norris

Part of me says you should be mad and make them stop and part of me says respect that kid for playing the game just a little better than you are. I’d at least make sure you have the proper insurance and immediately pass that cost on with a little extra on top of that. If he doesn’t like it then let him know the alternative is eviction. Then look forward to the end of the lease and start doing short term rentals for yourself.

You should join a local REIA group while you are saving money and make sure to attend the monthly meetings. My group has some great speakers and to me the most valuable part is networking with the best real estate pros in the city. Any question you have the answer is almost always in the room. I’m in Greater CLE REIA but there are others and one down in Akron too if that’s closer to you.

Is AirBNB or VRBO an option?

I think the profit margin you should demand depends on if you are going to be hands off or if you'll do most of the work yourself. "If" I was hands off I would accept a lower profit as long as it got me something above 15%+ Net ROI on a project I didn't consider risky. I'm hands on myself and I have a business partner so I have to demand a much higher profit margin for my time, energy, and literal blood, and sweat to make it worthwhile split 2 ways. A lot of flippers are paying more for houses than I think makes sense then cutting corners on the job to save their way into a profit. I see some really shoddy work being done and it makes all flippers look bad.

Check out a website called Service Sold - you put in the info for the job, photos, specs etc and the max amount you are willing to pay. Contractors will bid the job down from your max price if they are interested. You can pick which bidder you want you don't have to take the lowest one. You can see ratings on there like ebay auctions.  

If the units look nice and your rent is fair then I’d look at expanding your marketing for the units. Beyond that see if there is something next door or across the street that’s chasing people off. Barking dogs, broken down cars, crazy neighbors, crime, limited parking access, etc. If you had interested parties do a nice follow up call and ask survey style if there was one thing that kept them from renting from you what would it be? If all else fails maybe up your game a little by bumping the rent and include free basic internet or something like that?

Randy Hughes aka Mr Land Trust has some interesting ideas combining multi state trusts, trustees, LLC and even going so far as using an Am Indian Attorney on tribal land as trustee. To get through that supposedly you have to sue in tribal court. That’s way too many hoops and paperwork for me but if you really want to bury your ownership that’s one way to do it.

Unless NY offers private flood insurance you’re getting a federal sponsored flood policy regardless of what agent you talk to. That said not all agents understand flood insurance or how to quote lower levels of coverage with higher deductibles. Purchase price is irrelevant to how much coverage you have/need - The dollar amount of coverage is based on “reconstruction cost estimate”. The price of your policy is set on the amount of coverage and the flood zone where the property is located. Typically if you have coverage equal to or more than the loan amount the lender will accept it. Just know that if a loss occurs the claim check will have your name and the banks name on it and the bank will cash that check and pay off their loan leaving you owning a wet and damaged property. Some investors can handle assuming that kind of risk but many others would be wiped out.

All the areas you mention are good. Have you joined a local REIA group? I belong to Greater Cleveland REIA and it’s been a fantastic resource for me but there are others here as well. Great Lakes REIA I believe is the other one plus there is one in Akron too. If you want to check it out I can get you in on a guest pass for our next meeting Jan 9th

I'd suggest getting the property re-quoted from the same agents as if it had a new roof while getting quotes on replacing the roof. Then weigh the cost of the new roof versus the cost of the more expensive policies and see which makes more sense. If you will pay an extra $2000, or $? more per year for the policy versus a 1 time hit of $10k or $15k for a new roof it may make sense to get the roof done. Ex: $2k extra per year on insurance>every year< vs $10k for a new roof is a 5 year break even in my opinion. If you replace the roof then in year 6 the savings on insurance would drop to the bottom line. 

Roofers can vary ridiculously on what they charge and the cheapest is almost never the better option. If it's a cement block ranch like a zillion other SF 1925 built homes you have a low roof and easy pitch which may be pretty easy to replace. If you find a one man handy man who can do the job and you personally put a couple weekends in helping him you may be able to do the roof yourself for much less than you are getting quoted.