All Forum Posts by: Mike Hanneman

Try to get a licnenced contractor. In Idaho you don't have to be unless you do public works projects. This makes anyone with a hammer and a truck a contractor. If they have a license that usually means they are more serious about their business and they have something to lose then.

I agree M2M are actually less risky for landlords and investors. It gives the control back to the landlord, if you don't like the tenant give them whatever time you have to give in your state and they are out of there!

Does your family member know how to screen tenants, this is very important!!!

Just keep in mind this opportunity was granted because these properties were inherited!! Most likely at little to no cost to your family member. I would not get too greedy right away. Your family member needs to start thinking like a business person as they just received a business! They need to get reserves built up, so they can handle the cap-ex that will eventually happen. Are they ready financially for this? Can they withstand a month or 2 of vacancies? What about if/when tax becomes due can they shoulder the load of multiple properties needing repaired at once? This stuff is more important then making sure your rents are at market. Have them do their due diligence to their own checkbook/business reserves first.

Go find the deal first!! If it's a good enough deal there will always be buyers!

@Stephen S.  I would never take a hands-off approach if I'm the one who owns the property. You need to be checking up on/in with your PM constantly. A PM will never have your best interest in mind as they have other properties they have to worry about. Even as other PM's say to have a hands off approach you should not! Like you said if you did you wouldn't know about the issue you are dealing with now.

I would run over to the PM's office to deliver the 2 weeks rent bill personally and ask them what the hell they are doing? I would not be nice, as you said this isn't your first issue with them. Then I'd start looking for another PM co. The PM is suppose to work for you the property owner, if they won't find one who will!

@Greg S. said it perfectly!!  You could sell that property and get multiple multi family units that could cash flow 10X what that one does! Just because a property cash flows doesn't make it a good investment.

As for taxes I don't know about Canada, but I'm sure there are loopholes in place. Look for a 1031 equivalent.

@Kevin Peguero I would ask your mentor what terms he has been offering his guy since it's been successful. That would give you an apples to apples comparison in your own backyard. Then you can go from there with your own terms.

As with any deal everything is negoiable, but you would want terms that are fair to both sides.

I am amazed that a tenant would still be residing there without a lease, in a unit that is $1000 below market. If I was the tenant I'd be offering to sign a lease the moment it ends at current rates.

I don't know about California but I believe that applies if you live in the property already. If you are just buying one I think you have to honor the lease, as it follows the property.

If the tenants are on month to month just notify them with the correct window, in my state 30 days, and tell them you are not renewing thier lease and they need to move. I am actually closing on a duplex and doing this as we speak.

As for low rents holding down the value of a property, I would think there would be enough seasoned, experienced Investors in your area to see that. I know I never buy based on current rents, I buy based on what I can get in that particular neighbor hood/area.