All Forum Posts by: Andy Luick

When I was selling my flips retail, I always staged them and often sold the furniture off with the houses. I usually would add an unusual piece....a higher end upholstered piece or a lecorbeusier (spelling sorry!) chaise lounge that was pretty cool. I usually buy highend stuff at estate sales or craigslist.

Is $89k a lot for a house like this in Columbus? What are the comps? I don't know that market well at all. The house looks pretty nice....

I'd lose the flower pots around the front door; if possible, add a small pair of shutters to the window on the porch and repaint the shutters a burnt-orange that will go well with the brick but still make it pop. Boxing the two porch posts and the one on the corner of the carport might not be a bad idea or just repainting them bronze. I'd probably also repaint the siding at the front porch a taupe like "frontier tan" and old Duron color. Sherwin Williams has an excellent adhesion primer for vinyl & plastics that we use for vinyl siding and vinyl shutters that works really well for us in GA. I might go one step further and paint just the back wall of the carport with with either the "frontier tan" or something a tad lighter or darker. I probably would also paint the storage closet door red to match the front...or some other color beside white. Color can really make a huge difference.

I love the cookie idea and used it all the time when I was flipping retail. You might also consider finding a decorative wall hanging...something that suggest "home sweet home." I buy stuff at garage sales and goodwill all the time for this purpose...I will respray alot of things bronze or nickel and reuse at my rentals. We usually furnish the common areas and help with the baths....Happy Investing...let us know how it goes!

Interesting post - as with our modes or models of investing, most of us have different approaches. I'd say we would be rated a solid B+....many of our tenants refer new tenants to us. What we do is much more personalized and we include tenants in the selection process for new renters. We have a sitdown and everyone gets to know each other some. Shared housing requires this to be successful. We have had some tenants have to leave us due to job loss or transfers but we've also helped a few get back up on their feet by providing temporary housing at no charge in units that I personally own. It's my form of charity. Each renter has found employment and been able to pay me in full or is in the process of making payments...and all remained tenants.

We would only be rated a D or lower by those who we screen out on the front end. Not everyone is a good fit for shared housing. Like the others, we respond immediately to emergency repairs...we had a couple units with frozen pipes this year. We tend to clump the smaller repairs together so we can knock them out in one trip. In over two years, we haven't had a single eviction for non-payment...doesn't mean it won't happen. Happy Investing!

Great story - partnering or joint venturing is definitely the way to go. We joint venture on most of the projects that we do but the model is slightly different. Front-end JV partners can either go on title or take 1st lien holder position (most of our foreign JVs take lien holder), they put up 100% of funds to purchase & repair the property to rent-ready retail (all of which is documented with video), we do a line item bid for all repairs and work from progress payments. Most of the properties are then rented as shared housing and sold off to passive investors. Front-enders get 10% on their funds from day1 and 50% of profits from the back-end sale. Average return on the front-end is running between 20% & 30% in about 6 months. The JV partner is secured on title and we are able to work exclusively with JV agreements....forming separate LLCs for each deal gets a bit cumbersome and expensive.

Our back-end partners usually buy the property outright as a passive investment. Each one is renovated & rented and sold at a price based on net cashflow with a discount. We use a 10% cap for each deal and guaranty a 10% net return for 18 months which covers any repairs or vacancy that might drop the return...if it happens, we reach back into our pockets and repay the JV partner the deficiency to bring the property back to 10% net. Our rental model is very unique and produces much higher than normal rents. Our back-end buyers don't concern themselves with appraisals as those are all over the board....they buy strictly on net cashflow and return. We are able to offer some financing to back-end buyers depending on the deal, up to 50% of the purchase price.

We have a couple of backend properties available as examples. A 4bed/2 bath brick home with partially finished terrace level on a cul-de-sac with net rents of $18,540 annually is available at $160k for a 11% net return. We only deal in net numbers as pro-forma is more pie in the sky. It's in a northeastern neighborhood near Northlake in metro Atlanta.

We have another property a 5bed/3ba that will produce net rents of $22,000 annually and is available for $150k for a 14% net return. It's in a very nice, desirable older estate neighborhood slightly west of Atlanta with about a 15 minute ride to downtown.

Our front-end JVs enjoy the returns without the headaches of landlording. Back-end JVs acquire a rented, managed & performing asset with an above market return. Joint venturing allows each party to benefit from the talents and skills each brings to the table. Our model works because of our unique rental model. Partnering allows out-of-state or country partners to do deals as Dawn and others do. They can profit and still remain secured on title. I like our model as the JV partners maintain control of the property and we only get the bulk of our profit by performing. Happy Investing!

First off, go take a look at the INSIDES before you make an offer. If the tenant is a pig outside the home...he's a bigger pig inside. Is the other side vacant? If so, it may be vacant BECAUSE of the tenant. I would visit with the tenant and let him know that you are considering a purchase. There is a value to a long term renter...but here it might be further deferred repairs/remodeling of the space. For myself, if I have a pre-existing tenant who is a pig, I either won't buy the unit and avoid the headache entirely....or, meet with them to see if I can get them turned around or provide notice to vacate. I can tell you horror stories on single family units where we worked with tenants to clean up their acts...but pigs mostly stayed pigs. We avoid them.....we mostly do shared housing now and we usually do a monthly room "peek" to make sure the renters are reasonably clean. Happy Investing!

Way to go Justin....let us know how it goes and how we might help you!

A rooming house or boarding house is a type of shared housing. It's typically where the renter is just renting a room and has no other privileges in the house...often with zero bathroom use. It conjures up images of the American Depression where many people rented rooms in their homes in order to keep them. Like people, they come in all shapes & sizes. Rooming houses usually require specific operating licenses in most cities and sometimes special zoning depending on occupancy levels. There usually is no screening process and unscrupulous owners or slumlords just slam bodies into rooms..often renting by the week. Many jurisdictions limit the number of unrelated people living in a home to 4 to avoid some of the problems associated with the lowest forms of shared housing like rooming houses.

With the tougher economic climate, we created [...] to assist homeowners to screen, find & select suitable housemates. We might help rent a basement, terrace apartment, private room with bath or private room with shared bath. All of our rooms come with shared usage of the common areas: kitchen, dining, laundry, decks, etc. They also usually include all utilities. We have had a everything in the program from a $350/month unit to a $2,500 a month unit in an exclusive gated neighborhood...and everything in between. We thoroughly vet every candidate...both renters and owners...and match renters based on lifestyle and personalities. It's taken us years to develop the model but what we do works. Most of our renters are professional people either looking to save money, stay flexible or recover from divorces, job losses or health issues. We were recently filmed for a forthcoming tv documentary on shared housing and how it works.

We've since taken the [...] concept and applied to our investment properties with stellar results. It isn't the easiest thing to establish in a 3 or 4 bedroom home where you will have multiple personalities sharing a home but the results are worth the efforts. Units we have either acquired or taken over are cashflowing a net 10% to 16% consistently. We minimize vacancies, repairs, repaints and most of the costs of holding investment residential real estate. At the same time, shared housing maximizes the rents with higher rates with less turn-over. While most associate shared housing with lower income groups, we have many white-collar professionals in our homes. We're also beginning to see more older, 65+ applicants who are being forced to cut expenses to live comfortably.

Part of the key to success with shared housing is presently a property that feels like home and is comfortable for those who live there. We partner some with cash investors to buy distressed homes which we then turn into shared housing. When we do, we wait to see what kinds of furnishings our tenants will have and then we supplement with furnishings or decorations of our own. It's a unique model but one that is timely and profitable in most markets. We are just now working on an inner-city unit to see what kinds of tenants we attract. If it works, we will be able to develop the model for other cities besides metro Atlanta.

Generally, as a matter of public policy, a worker cannot negotiate away or sign away his rights under workers compensation. Waivers are a good idea and all of my workers sign them. However, if the claim is large enough...instead of a sliced finger it's an amputated arm/leg or an electrocution....the waiver will go out the window and the attorney will pursue everyone in the chain....the homeowner, the contractor and subs...depending upon who the injured party was working for or with. The waivers simply deter a worker from ever filing suit. I believe in the "problem solved" example, there just wasn't enough money for the attorney to take it on contingency. Had the worker had funds to pay an attorney...you'd lose.

Workers Comp is very expensive and usually not required legally by individual trade contractors. Most general contractors are required to carry it by law but most of the policies require subs to carry their own compensation coverage.

As J Scott aptly points out - READ your policies....read any insurance policy. It's a contract and whatever it says will be binding for the most part. Tricky insurance lawyers insert language like J Scott found so that there is only coverage IF and only IF you both have the same policy limits. Most companies would carry higher coverages as J Scott did himself....and, in the example, there would not have been any coverage.

Using a waiver will keep you "safe" for most basic things: painting, handyman, tile work but for roofing and electrical you'll be better off to get a contractor with comp coverage. Happy Investing!

I love real estate investing as most of us do. There are different models working all across the US and it would be fun to network and compare models/results.

I'm in metro Atlanta, I've been here for over 20 years and have always been a very active investor/contractor. For most of my Atlanta years, I focused almost exclusively on single family rentals. In recent years, I have switched everything to shared housing which is a headache to rent/manage but the results are worth it. When I factored in vacancy, repairs & legal expenses, my old single family rentals were lucky to product 5 to 8 percent annually and that was with us handling the management & rentals. We created a shared housing model that is now producing 10% to 16% returns on the back-end and almost obscene returns for our front end partners.

What is everyone else doing? Happy Investing!

The key to investing abroad is to understand the model thoroughly...in most markets in the US, the whole buy-fix-rent single family doesn't return well these days. Having good property managers on the ground is only part of the equation...you have to have a turn-key team in place AND know that you have a secure investment with or without them. We work with a ton of international investors who usually take a place a 1st lienholder against our titles with our having power of attorney. Look for a model where the marketer makes the bulk of their money by performing....as our forces us to do.

Whatever you hear.....please discount advice to go into places like Detroit or Flint...yes, you can buy houses cheap but you can also do the same with lottery tickets....most are losers and every once in a while, someone wins! Stick to markets you might live in like: atlanta, tampa, orlando, austin, nashville and the sort. Happy Investing!