All Forum Posts by: Andy Luick

Have you tried joint venturing with private money in your area?  That's typically  what my group does in atlanta and it's usually a win-win situation.  Our partners get higher than normal returns and we do all of the heavy lifting, rehabs and renting.  Worth a shot..

Are you trying to wholesale or bird dog? What is it you are wanting to do? You're in a very expensive area of the country so it will be tough to find the kinds of deals that most of BP'ers are after. You are correct...all of us are looking for something different depending on our model...and some, sadly, really have no idea what they are looking for or are too scared to pull the trigger on a deal. You will see a ton of that in the REIAs. All of us are usually seeking higher returns for more risk...a rented property that is cashflowing will return less than a fix & flip...at least in theory for most of us. For me, if I can't offer or get 10% net as a minimum per deal, I wouldn't be interested. Others are different.

Even on our shared housing rentals that are being flipped over to passive investors, I almost always include top-of-the-line ceiling fans with remotes, upgraded faucets & shower sets, self-closing toilet lids & upgraded nickel or bronze hardware. It adds several thousand to each one of our projects but we get better renters because of it.

The honest part to remember with investing turnkey anywhere is having the right team in place "boots on the ground" or you will likely get slaughtered. When the market completely crashed 3 years ago, even a 5-year-old could make money in Atlanta...but, a good portion of the foreign investors who ended up buying here sold out at break-even, loses or still owning losing properties. Why is that? Simple..there just aren't that many good renters here anymore...some, yes, but the vast majority now know how to work the system. I love Atlanta...eat it, live it and breathe it....but I have to build a different mousetrap in order to make the kinds of profits that my JV partners & I like. Whatever you elect to do, make sure whoever you buy from or with has a stake in the back-end performance of the property. Otherwise, the profiteer turnkey marketer is really the only one who wins.

You can get solid returns in a whole bunch of places. Just network like crazy! Welcome to BP!

It really does pay to have a PM in many situations. It's critical to know the laws of your state. I was amazed to read this about MA landlord tenant laws:

"Late Payment Penalty
A landlord cannot charge interest or a penalty on late rent until 30 days after the due date. However, the landlord can begin the eviction process immediately, even if the rent is only one day overdue. The landlord also cannot use a reverse penalty clause to encourage you to pay early. For example, it is illegal for a landlord to reduce the rent by 10% if the rent is paid within the first five days of the month."

Here, the tenant is month to month without a lease. Simply give her 30 days notice to terminate the lease. Post it on her door & take a picture of it, send certified mail return receipt & email it if you have her email. Then hand it over to you lawyer that you have hopefully obtained and when you re-rent the place, use a written lease. MA is interesting but their policies probably result in higher rents. Another place where my shared housing model will do better andyield higher net rents. If the tenant has paid rent every 3 months or every 6 months, you would have to give notice based on the frequency of the payments. Yikes!

There's your answer - live in it for a few months, then apply to refinance and plan to live in it for another 12 months. You could turn it into shared housing as I do with my own props and model. Take the smallest room, put all utils in your name and rent the other rooms. I have several homes where I have kept a room for myself to either use to work from or sleep at on occasion.

@Alison M. - I would imagine it's a pretty tight market for buildable lots in your part of the world. I did my masters work in urban planning & design studying Falls Church...great area. You've gotten great advice here....contact your developer and ask him if he would be interested in buying a lot from you that you are about to go to contract on. If you have the relationship with him or her, most would disclose that they are bidding on it. You can't get a free if he's already on it but he might offer you something for being honest and getting out of the way. Either way, you will further your relationship with the developer. As others said, I would be very careful about being the highest bidder especially if this is a listed lot....everyone in the know already knows about it. off-market, that can be a different deal for you. Happy Investing!

It's pretty standard as is the no refund part - there are a bunch of HMLs here on BP and most will expect that you've done enough research into your deal to know whether you are there in terms of value. The problem with some HMLs is that they will roll the appraisal value backwards to make for a better worst case scenario. Most are not in business to make money on appraisal fees and you can vet them here if you need to. HML is an expensive route to go....how did your JV deal go...have you pitched the deal to them? I prefer JV and mix it up with my own money in some deals and none at all in others.

I have several HMLs trying to figure out how to do business with me on my deals because the returns are so attractive but they can't get their arms around my model. We turn single fams int multi units with high net rents....but the underlying market value is often about what we have in them! If you have a good deal in Cali someone here on BP would love to partner with you on it. Happy Investing!

I've never seen anything like the Miami permitting requirement - just FYI here is what you'd need a permit for there:

When is a permit required?Section 104.1.1 of Florida Building Code: Permits
Helpful Building Permit Information for Condominium AssociationsA permit ensures the consumer that the work is being done properly and with the appropriate materials. A licensed contractor is required to obtain permits in the following situations:

• General maintenance and repairs exceeding $500 in labor and materials for projects modifying a building's existing structure in any way (including tile, wood flooring and marble);
• Any electrical work, including installation of ceiling fans;
• Replacement of an air conditioner unit;
• Installation of a water heater;
• Changing a toilet or a sink fixture.
• Please contact the Building Division at 305-466-8937 if you should have any questions as to whether a permit is required.

To the best of my knowledge there is no lease term limit in florida...you can write the lease for 99 years if you wish. You will have lots of stereotypes with artists...and rightfully so, their usual lifestyle, credit & extra curricular activities usually deserves it. I've had my share of "artists" over the years and every single one of them has been a LOSER. hate it but it is what it is. The best one was a tenant who actually was a gifted artist...I have a couple of his works....and was great as long as his dear Grandma was available to pay the rent. I eventually had to evict him after Grandma headed to the pearly gates.

Landlording is just like dating...EVERYONE puts their best foot forward. It is best to assume the worst and be proven otherwise over time. Most artists operate way outside the norm unless they also have regular employment. No one wants to sign a 5-year lease unless they either HAVE To or because it sounds good but they know that they can never be held to it. A judgement against most artists as with most renters will be toilet paper.

In your mind it might sound good to have a tenant willing to improve your property but the likely result is that you will have to rip it all out anyway when they move or you evict them. I wouldn't be concerned with their credit...who cares about that now...but I would run backgrounds on them before even wasting much time chatting with them. If they make it past the background check...and run their names through mugshots.com for FL as well...they make an appointment to meet them somewhere publicly to chat...then visit their current "home." I would ask to do so right after the public meeting so they don't have time to prep.

Previous landlord references are a waste of time in terms of what they will tell you...if the current tenant is a problem, most will tell you how wonderful they are just to get them peacefully & quickly out of THEIR rental. I check with every previous landlord just so the renter knows I am checking. I look for good, long term personal references.

From experience - I can't stand cats...every pet owner will tell you that they have the best dog or cat...but cats are the worst. Once they pee in the house....although yours might have a concrete slab....you can never get the smell out...you can mask it for a while but the only way to get it out is to rip up the subfloors and replaces. You might never smell but every other cat that ever comes to the house will pee in the same place. I usually get a high, not refundable pet deposit on each pet...but it is case by case.

Also, it's a great idea to get bank statements where you can...especially on self employed people. Tax returns don't mean as much to me...I like to see the cash going in and out of the account. With self-employed on a single fam rental, I like to see a years worth of statements. With my shared housing model, I don't go as deep and a ton of my renters don't even have bank accounts.

Hope it works out for you but be super careful. It's all a balance of risk & reward but you are considering a renter that most of us would run from...doesn't mean it won't turn out great for you! Just be very cautious and cover your bases. Good tenants are usually long term...they stay for 2 to 3 years. In my shared housing model, renters sign a very tough lease but it's only for 6 months and month-to-month after that. Many want to resign for another 6 because they run the risk of me raising the rent.

If the artists are good renters then you will keep them long term and not be raising the rent much anyway. It's easier for you to keep someone long term even if the place becomes a pit as long as the rent keeps coming in and code enforcement isn't knocking on your door!