All Forum Posts by: Phi Tran

@Phi Tran

Encourage you to learn from the mistakes of others - by reading posts here on BiggerPockets about owners not having their expectations met by their current Property Management Company.

To avoid going through the same poor experience, keep reading.

Even if someone give you a referral, don’t make the mistake of assuming that PMC will meet your expectations, just because they met the expectations of the referral source.

We also can’t believe how many owners hire the first PMC they speak with!

Then they complain their expectations aren’t being met!

In our experience, the #1 mistake owners make when selecting a Property Management Company (PMC) is ASSUMING instead of CONFIRMING.

It's often a case of not doing enough research, as they don't know what they don't know!

Owners mistakenly ASSUME all PMCs offer the exact SAME SERVICES and PERFORM those services EXACTLY THE SAME WAY, so price is the only differentiator – and they often select the first PMC they call!

So, the first question they usually ask a PMC is about fees - instead of asking about services and HOW those services are executed.

EXAMPLE: PMC states they will handle tenant screening – what does that specifically mean? What documents do they require, what credit scores do they allow, how do they verify previous rental history, etc.? You’d be shocked by how little actual screening many PMC’s do!

This also leads owners to ASSUME simpler is better when it comes to management contracts.

The reality is the opposite - if it's not in writing then the PMC doesn't have to provide the service or can charge extra for it!

We have a 14-page management contract that we've added our real experiences to over the years, with the intent of protecting both us AND the landlord. Beyond the Monthly Management, Placement & Maintenance fees, all other fees in our contract are IF EVENT -> THEN fees.

We don’t know any PMCs to recommend in the area mentioned, but since selecting the wrong PMC is usually more harmful than selecting a bad tenant, you might want to read our series about “How to Screen a PMC Better than a Tenant”:

https://www.biggerpockets.com/member-blogs/3094/91877-how-to-screen-a-pmc-better-than-a-tenant-part-1-services-and-processes

We recommend you get management contracts from several PMCs and compare the services they cover and, more importantly, what they each DO NOT cover.

EDUCATE YOURSELF - yes, it will take time, but will lead to a selection that better meets your expectations & avoids potentially costly surprises!

P.S. If you just hire the cheapest or first PMC you speak with and it turns into a bad experience, please don’t assume ALL PMC’s are bad and start trashing PMC’s in general. Take ownership of your mistake and learn to do the proper due diligence recommended above😊

Ryan, I just spoke with a company that builds and consults on ADU's in Austin and San Antonio. I was told that my duplex which is zoned as R-4 and an ADU can NOT be built on the lot. Essentially R-4 is for single family and you can have a dulpex or an ADU but not both. I'm curious to know what you found out.

@Phi Tran, its more complicated when buying a multi-family to house hack than it would be for just a single family primary residence.

Talk to your lender and CPA. They should be able to tell you how much of the potential rental income with count towards the income requirement and your CPA can guide you on how much you can comfortably afford in a housing payment. 

@Phi Tran, do as your CPA says. Whoever told you that lenders look at net income is not correct.

For house hack you'll be using a conventional conforming loan. They look at two ratios with your income. Gross monthly income versus the mortgage payment and gross monthly income versus the mortgage and other debt payments.

https://www.investopedia.com/t...

@Phi Tran I have found a few that break even or slightly cash flow so keep looking! I have some other thoughts as well, if they don't cash flow are you willing to hold them until they do while hopefully getting appreciation? Are you renting out your current primary when you do this? If so, after renting out part of the multifamily, will the amount you have to cover be cheaper than your current mortgage, if so, that could be a win. If you can hold it for a few years while not cash flowing much, depending on the area, you may find greater appreciation and higher rent and it will make it all worth it. I am new to all this as well but that is the feedback I have seen on here and heard on the bp podcasts. Good luck on your investment journey!