All Forum Posts by: Alan Brown

She's a pretty great tenant other than the fact that she didn't disclose she had a dog.  NOt only a dog but a Pitbull, who is on my insurance co's list of dogs they won't insure.  

She's also 6 months pregnant (the tenant) and I don't want her to move.  The dog is SUPER sweet, of course, but i cannot take a chance on something happening with the dog.  

Looking for some kind of liability insurance she can obtain that will cover us from any twists, keeping in mind that if a child got bit in the face, even accidentally by a confused dog, the lifetime cost a jury might award would be in the millions, I'm sure.

Any Ideas?

I also have not been requiring tenant insurance, more particularly pet insurance-- could that be a game changer?  My manager has been charging a $250 flat non refundable pet fee, which seems sort of useless, in fact may even make a tenant feel like they've "paid in advance for any damage, so why be astute about animal's behavior?"  Wouldn't it be better to just require them to pay for insurance to cover cat pee in carpet?  How the ins company determines whether the current pet is at fault, I don't know.

Hey all, I've been working in Pittsfield for awhile and have a few units there, in fact I may move there.  The Berkshires around there are pretty awesome.

I've had great luck networking in some other places, and it's always nice to bounce ideas off others.  I've been learning from smarter people than me every day since 1993 in Real Estate, and I might have info I could share with others.  

Anybody wholesaling?  I'm looking for a flip or two, or possibly a Brrrr long term hold...

@Kelton Jensen, Welcome!  you live in my favorite part of the world.  I went to school and lived in a few places in MT for many years and am always pining to get back.  My wife thinks of MT as though it's an old girlfriend I always think of going back to!   That gets interesting, as you can imagine.

You are on the perfect track!  If I were to give you one bit of advice it would be:  other markets are way more given to cash flow, as you know... but when investing out of state, the first step after identifying a couple of markets that look good, is find an excellent property manager in those locations.  That is extremely difficult, but if you cant do it, DO NOT INVEST THERE.  That is the key to happy out of state investing, in my experience.  Study everything you need to know about good property managers, and then start interviewing... There's a list somewhere on BP that is written by what seems to be an amazing PM in Phoenix, if I remember right..  83 questions to ask potential pm's, and even though I thought that was an absurd amount of questions to bludgeon a perfectly nice person with,  i could not leave out any of the questions, and have even come up with some more.  And I've found that good PMs are happy to answer them.  

I haven't read David Green's book on out of state investing, but I will, because he sounds super articulate and smart on podcast.  I've been doing out of state investing for years, and it's definitely a love/hate relationsip.  I've had terrible luck with PM's (even after thinking I"ve learned my lessons), and I hopefully am getting better.  Every time I go to Kansas City to check on my properties there, it costs me $1000 to $1500 whether I drive or fly, with hotel and maybe a rental car, which cuts significantly into your cash flow, and I still feel like I should do it more.  I keep the properties I have that are close to me in better and better shape by puttering on them, so it's sad when I get to KCMO and see the disrepair my lame PM has let things get into.

Mostly they (PM's) will all be charming and seem great, like potential tenants, but you have to grind into them to find out how much they actually care about the client (you AND your tenants).  Good and great PM's are focused  on the long game, on making sure the owner/investor does well, and therefore the PM will do well.  Crappy ones are all about making as much as they can off the client as soon as possible... and reducing the amount of work they have to do, so that their life is easier.

Do I sound bitter?  yah, I'm not a big fan of incompetence or being lied to and ripped off!  I'm in the process of firing one now, and hoping like hell the next one will be better.  I've heard magical stories of great PM's and it sounds fantastic!  like a true team member.

NARPM seems like a great organization, maybe holding their members to a higher level... I"m going that route now...

You will do great;  just do your homework!

@Rudy Herrera, great question!  

I've heard (on some kind of science show) that only about 15% of people have the ability to truly visualize things.  I don't have it, but, as @Geordy Rostad suggested, it's something that can be developed.  I think he's a realtor, and as many busy Realtors who see thousands of properties and steal ideas and do their own designing do,  you take mental (and iphone) pictures of things you love the look of.  Over time, you build a conglomeration of all the things you've seen (or designs you've done) before.

My wife has that skill.  she can visualize (and conjure up) colors together.  I've met a few other people who can too, and it's truly amazing.

I've seen some of what @John Hickey has done, and that dude does nice stuff!  Not bad for a Firefighter!  His designs are so hot he needs to be able to squelch the heat from them!!.... Sorry lame humor is what I do best, according to my family.

I love Houzz.com for ideas... literally thousands of images, and you can sift through them fairly efficiently.  I send clients to them to get ideas.

There are a LOT of wannabe designers out there who love to do amateur designing.  I guarantee you have a friend who would love to go with you and give you their ideas on stuff.  They might even have the skills... Not bad to get ideas from, and if you don't like the ideas, you can pass.  Maybe sit with them over Houzz and see if what they pick out looks good to you, and then decide whether to take them with you!

Kitchen and bath showrooms can get you great ideas...but they are expensive to buy from, so shoplift some ideas and look around for less expensive options of the same look.

 IKEA is pretty great and cheap... and they're free to browse. 

Some paint companies like Sherwin williams have programs where you can put your pix into the program and it will put their colors on your walls on screen.  Reality v onscreen may be a little different, but it's an awesome way to start, until you get enough experience with colors to use tried and true colors, OR hire a pro to make decisions for you!

@Jeremy Dockendorf, I think @Pamela Morrison’s idea is spanky.  

I’m positive you’ll have plenty of cash to write a $700k check (let’s stay positive!) in five years, but god I hate balloons!!  My bank here can get very creative (they might even do a 1st and a second to avoid pmi like in the old days!) and could get you funds for the remodel in the loan.  Probably plenty of horse farms in Ohio for comps.

Don’t forget they also might allow you to use the equine income to qualify if necessary.  

Owner carry can be great, but you’ll probably do better at the bank.  

Seller will probably take a tax hit on anything over $500k (or even over $250k if he’s been single awhile)— so there is a good advantage for him maybe,  to spread out the income over 5 years —more reason to force the terms of an owc to be way to your advantage, should you choose to go that route.  

Greenstone might even let you get owner financing for a portion (avoiding PMI AND saving seller from tax hit) of the purchase, which might gain you an excellent sales price.

Stay low, my man:  you never know how low he’ll go, after a year on the market, and I know you know this, but remember to stay unattached to the outcome for best negotiating.  I have a tendency to get attached to beautiful properties, especially when it will make my wife happy!!

Good luck!

@Jennifer T. Sorry you lost the duplexes but good for you for not getting suckered!  I'm stabilizing a property I bought in a hurry (1031 running out) a year ago, and neglected to do enough due diligence;  trusted the Seller on some stuff I shouldn't have.  Apparently lying is all the rage these days.  

Mine will work out fine but my butt is sore from kicking myself in it so many times-- wished I had walked away from the deal like you did.   

@Krystal Watson  Yah this time of year is really bad in most places... I'm really trying to end my leases in summer to avoid the vacancies.  Most likely you just have to be patient, you'll get someone in there.

I would avoid mentioning pets until someone brings it up, and I also like the idea of just increasing the deposit for pets instead of a one time fee (if people pay it up front, they may feel like it buys them the right to let their pet run rampant!!)

Absolutely use the local paper... 

Definitely find a pro house mover—I could swear there’s one around— maybe big timber? Can’t remember— but get with them and have them look at it and give you a bid.  Very likely you wouldn’t want to do much before moving it— I might not even demo it (if it needs it), as sheet rock can help w structural...

Pursue it, though, and get lots of bids and do your due diligence — because the numbers might work well, and most people would be too timid to take it on!!  But don’t get too attached to it, because costs could mount way up, and you might be better off building fresh!

Good luck!

HI, @Annalise Kingston, these are great ideas all... If I were you, I like the idea of hacking a property, meaning use your $7500 to buy a Single Family home via FHA, or preferably an owner occupied 2, 3 or 4 plex to live in, hopefully at a reduced price , that might need some amount of (not too extensive) work, if you have the time and gumption to gain some sweat equity over the next year. Then keep it as a rental when you move. The crucial thing in this, however, is to make sure you have an EXCELLENT property manager in your area to manage it when you are gone. I've bought a lot of out of state properties, and there's no way I would consider a long distance investment without being ABSOLUTELY sure you have the perfect property manager. Trust me, I've learned this lesson more times than I care to admit.

And get your real estate license.  You learn so much about Real Estate and gain confidence in investing.  There is no better investment than real estate.  You have chosen the right vehicle, now learn all you can about it, and getting licensed in your state is an excellent way to move ahead.  You might even decide to do sales part time to complement the vast riches you will receive as a social worker.  

Good luck!  And make it your life's mission, other than saving the world, to listen to every BP podcast... it's like a PhD in Real Estate investing, truly.  You could listen to 10 or more of them every time to drive to Carolina.  And they are honestly really fascinating and thought provoking.

I wouldn’t bother with the microwave!  Some people don’t use them, and they’re affordable enough that a quality tenant will provide their own.  Just one more thing to get broken!

The other things are a nice idea and may work the intended magic, but they likely will go away with your tenant, or if not your hired cleaning person may walk away with it!  (Whenever I’m working on a unit, I buy some dawn dishwashing soap to use to was my hands, and paint brushes, jist random needs, and I leave a nearly full bottle for the tenant, and after the cleaners come through they always walk away with it!!)

Good luck and congrats on the hack!  And in the best state ever!  I miss Montana