All Forum Posts by: Michael Rossi

Tim, if the Walmart paint is water based - I'd pass. It's almost worthless for floors (been there, done that, made that mistake). I've used oil-based floor paint from Walmart and Menards and both of those were fine.

Unless you're renting to VERY HIGH END TENANTS, it is not to your advantage to have the tenants sign a lease longer than one month. With a month-to-month lease, you can get rid of the tenant if you don't like what's going on. A longer lease won't force the tenant to stay longer than a month anyway. If a tenant wants to leave - they'll leave. What are you going to do, sue them? It's nearly impossible to enforce the lease on most tenants because you can't collect a judgment from them (you can't get blood from a turnip. On the other hand, the tenant can enforce the lease on you, because you have something to lose. If you violate the lease, the tenant can and will sue you and they CAN COLLECT. A longer lease ONLY BENEFITS THE TENANT.

One additional consideration is that the government is pumping TRILLIONS OF DOLLARS of imaginary money into the economy. Our country is in so much trouble that other countries are no longer willing to buy our debt. The FED is buying our debt, which is nothing more than a giant ponzi scheme. The result is likely to be RUN AWAY INFLATION! You don't want to be trapped in a year long lease at a set rent if hyper-inflation occurs. A month to month lease will allow you to adjust rents to keep up with the hyper-inflation!

My advice is FORGET THE CAP RATE! Cap rate is primarily a term used by investors who are trying to take advantage of ignorant newbies or who are trying to sound important. You can't eat cap rate, internal rate of return, or any of the other gibberish the so-called sophistocated investors talk about.

Furthermore, you'll often hear real estate agents and other sellers hype the cap rate because there's NOTHING good about the property. For example, in an over-priced market in a socialist area, a real estate agent might tell you that a property has a great cap rate and elaborate that the market cap rate is 5.0 and the property he's selling has a cap rate of 5.5! Good deal? NO!!! You're still going to lose a huge pile of money on this deal! Additionally, the entire market cap rate is another joke BECAUSE IT DOESN'T EXIST!

The ONLY thing that matters in business is MAKING MONEY! My advice is to do a cash flow analysis and determine if the property will make the desired amount of money. If you want to go one step farther, calculate your cash on cash return on the property. That is useful information.

FORGET THE CAP RATE!

Chris,

The people that are using 40%, like Jon, are doing the management for free - which means that the 40% is exactly the same as the 50% Rule considering that management is normally about 10%.

The answer to your question is that you should indeed bank anything from the 50% Expense number that you don't spend each month. Over a long period of time, there won't be any extra. Don't take that any of that money out unless you are ABSOLUTELY SURE that you have enough money to cover all contingencies - because those contingencies will all occur over time.

Yes, I'm sure that Tim is talking about wood floors, not plywood or OSB. I've been painting my wood floors for years and as the other said - THEY LOOK GREAT! However, the best part is that it takes about 30 minutes to roll on a new layer of paint between tenants.

Carpet in a can - gotta love it!

Homeowner's insurance won't pay claims on a rental! Therefore, it doesn't matter if you have a stated amount, replacement value, or $10 Million of coverage - they aren't going to pay. If you don't have a landlord policy (rental policy), then you need to get one immediately.

There is no difference. Are you only going to have one SFH or one multi-unit building? You will likely have about the same percentage vacancy whether you have one SFH, 100 SFH's, or a multi-unit. If your vacancy rate is 5%, it's the same regardless of the number of units.

And Ann Coulter was just warned that she could be ARRESTED in Canada if she said the wrong thing. No freedom of speech up north I guess. It's only a matter of time before that comes here.

Well said, and I think our troll already knew that.

More trolling J Scott? Here's what I actually said "I suppose that's true, but when you need a $100 TRILLION note to buy a loaf of bread (like in Zimbabwe), it's not MUCH value." But, you knew that, didn't you?