All Forum Posts by: Michael Williams
Michael Williams has started 65 posts and replied 199 times.
Post: Millennial Migration to Sacramento 2017 - Here Comes the Rush!
- Rental Property Investor
- Sacramento, CA
- Posts 202
- Votes 82
@Gene Mattos Yes, I have a rental near oak park and the area has changed a lot! More businesses, and home prices have increased significantly in the last 5 years. It’s harder to find affordable houses in Sacramento, even in the less desirable areas.
Post: Pricing Rental Unit and Tenant Screening
- Rental Property Investor
- Sacramento, CA
- Posts 202
- Votes 82
@Chou D. You could try advertising your rental on different platforms such as Craigslist, apartments.com, put up posters at a near by grocery store or hospital. You could also try using incentives, I take $500 off of the first months rent along with lowering the price $50-$100 my unit has been vacant for a month. I wouldn’t lower the qualifications for your tenants, it’s better to wait for a class A tenant than rush to fill the vacancy.
Post: Multifamily investors: What has contributed to your growth?
- Rental Property Investor
- Sacramento, CA
- Posts 202
- Votes 82
Getting serious about my real estate investing career and taking daily, achievable actions to purchase my first apartment building (5-12 unit) multi family property in Sacramento, Ca.
Post: 4-Unit into a 5 or 6 unit
- Rental Property Investor
- Sacramento, CA
- Posts 202
- Votes 82
I'd call local contractors in the area and get a ball park estimate for the project and be ready to spend twice as much because something always comes up. Also permits, inspection, appraisal fees etc. And how much more a month would you earn if you do convert the basement into another unit, how long would it take to pay back what you put into it?
Post: House hacking with a VA loan in Sacramento, Ca
- Rental Property Investor
- Sacramento, CA
- Posts 202
- Votes 82
Investment Info:
Small multi-family (2-4 units) buy & hold investment in Sacramento.
Purchase price: $480,000
Cash invested: $15,000
My wife and I purchased and house hacked our first duplex in the Sacramento, Ca area with my VA loan in winter 2018, we've moved out summer 2020 and we currently cash flow $1800 a month from this property.
What made you interested in investing in this type of deal?
I purchased a single family home in 2016 in the Sacramento with my VA loan, before purchasing our first home I did not know much about real estate and investing, I began reading real estate and investment books and found biggerpockets, I'd listen to the podcasts, watch every video they'd put out on YouTube and I read every book that biggerpockets had put out at the time. Within the next 9-12 months I convinced my wife to sell our home and use the equity to purchase a duplex.
How did you find this deal and how did you negotiate it?
My wife found our first duplex on craigslist, it was a great deal, the seller was a house flipper and had been working on the hose for over 2 years and he was trying to sell another house at the time and he needed to unload a property soon. He had just posted the house the day before and we saw him to discuss purchase within a day. We negotiated $15,000 of the his asking price buy painting the entire house ourselves. We closed in October 2018.
How did you finance this deal?
I used the equity from selling my house and I used my VA loan again.
How did you add value to the deal?
We added about $15,000-$20,000 of value to property. We painted the entire property for $7500, installed stainless steel appliances in the smaller unit from our previous home, landscaped, we installed 3 windows into the smaller unit and installed a fence to separate the back house from the front house.
What was the outcome?
Updating the house allowed us to demand a higher rent in the area and get a better quality of tenant.
Lessons learned? Challenges?
Always have reserves, it took us 3 months to find our first tenant. We had to pay the entire mortgage ourselves for 3-4 months. And when we did get a tenant within the first 2 months of them being there we had to repair the kitchen floors.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Yes Ive been working with great real estate professionals in the Sacramento area. My agent and lender were the work horses, they're also real estate investors so they knew how to help me.
Post: Questions for property managers
- Rental Property Investor
- Sacramento, CA
- Posts 202
- Votes 82
Originally posted by @Charles Carillo: Ok thank I will soon
DM me and I will send you a PDF list of property management questions you can ask.
Post: Questions for property managers
- Rental Property Investor
- Sacramento, CA
- Posts 202
- Votes 82
Originally posted by @Nathan Gesner: Thank you! This is a lot of great information. Currently my wife and I self manage our duplex but when we purchase our first apartment building (5-12 units) in the Sacramento area we'd like to use a property manager until we created a system to manage a property that size ourselves.
Remember: cheaper doesn't mean you'll make more money.
You can start by going to www.narpm.org to search their directory of managers. These are professionals with additional training and a stricter code of ethics. It's no guarantee but it's a good place to start. Regardless of how you find them, try to interview at least three managers
1. Ask how many units they manage and how much experience they have. If it's a larger organization, feel free to inquire about their different staff qualifications.
2. Review their management agreement. Make sure it explicitly explains the process for termination if you are unhappy with their services, but especially if they violate the terms of your agreement.
3. Understand the fees involved and calculate the total cost for an entire year of management so you can compare the different managers. It may sound nice to pay a 5% management fee but the extra fees can add up to be more than the other company that charges 10% with no add-on fees. Fees should be clearly stated, easy to understand, and justifiable. If you ask the manager to justify a fee and he starts hemming and hawing, move on or require them to remove the fee. Don't be afraid to negotiate!
4. Review their lease agreement and addenda. Think of all the things that could go wrong and see if the lease addresses them: unauthorized pets or tenants, early termination, security deposit, lease violations, late rent, eviction, lawn maintenance, parking, etc.
5. Don't just read the lease! Ask the manager to explain their process for dealing with maintenance, late rent, evictions, turnover, etc. If they are professional, they can explain this quickly and easily. If they are VERY professional, they will have their processes in writing as verification that it is enforced equally and fairly by their entire staff.
6. Ask to speak with some of their current owners and current/former tenants. You can also check their reviews online at Google, Facebook, or Yelp. Just remember: most negative reviews are written by problematic tenants. The fact they are complaining online might be an indication the property manager dealt with them properly so be sure to ask the manager for their side of the story.
7. Look at their marketing strategy. Are they doing everything they can to expose properties to the widest possible market? Are their listings detailed with good quality photos? Can they prove how long it takes to rent a vacant property?
This isn't inclusive but should give you a good start. If you have specific questions about property management, I'll be happy to help!
Post: Questions for property managers
- Rental Property Investor
- Sacramento, CA
- Posts 202
- Votes 82
Originally posted by @Drew Sygit: Thank you for the link, I'll look at it tonight. Currently my wife and I manage our duplex but when we purchase our first apartment building (5-12 units) in the Sacramento area we'd like to use a property manager until we created our own management system for a property that size.
You might want to read our series about “How to Screen a PMC Better than a Tenant”, since selecting the wrong PMC is usually more harmful than selecting a bad tenant:
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You might want to follow the "Deep Dive" series we're doing on our BiggerPockets blog about Metro Detroit cities and City of Detroit Neighborhoods:
Post: Private Lender or Pull Money out of my current property? (Heloc)
- Rental Property Investor
- Sacramento, CA
- Posts 202
- Votes 82
@Adam Schmidt Thank you, great advice! I’m going to listen to that episode soon. My lender and I have decided to use a cash out refinance on my property, this’ll allow me put the money back into my house after a year.
Post: Private Lender or Pull Money out of my current property? (Heloc)
- Rental Property Investor
- Sacramento, CA
- Posts 202
- Votes 82
@Justin Phillips I’ve spoken with my lender and we’ve decided to use a cash out refinance on my property. This’ll allow me to put the money back into my property after a year.