All Forum Posts by: Jonathan Johnson

Here's a list I've been making. I was using Cozi.co because it was free online payments, but now I use Tenantcloud.com because it looks better and is more organized with more options. Tenantcloud costs $9 for online payments, the management side of it is free though.

Hello BP,

We just closed on a 4-unit apartment and I'm so excited! 

Here's the deal:
We have a SFH that we are renting out because we had to move for job/family. We bought that house with the VA Loan. The VA loan allows you to use again but you're capped at a certain amount as well as needing to spend a certain amount. We needed to spend at least $144,000.

We found a 4-unit for exactly $144,000! We that didn't leave me very many options for negotiations. BUT, here's what I was able to do: The place just needs some remodeling, no huge repairs. The bathroom sinks in all units are just old and chipping, the same with the tubs. The roof is in good condition but is older. And a few walls just needed either re plastering or just new paint. Other than that some appliances are old but everything works fine and looks great.

I met the seller when touring the property back in February and right then said,
  "I can give you your asking price, but would you consider a credit for repairs and covering 6% (the VA limit) of the closing costs?"
 He said he thought that was reasonable, he knew the place needed some updating. At first I asked for a $6,000 in repairs/remodeling because I guessed about $3,000 for stuff inside with some extra for the roof in several years. He countered at $4,500 and I accepted.

$144,500 Purchase Price
$4,500 side credit for repairs/remodeling
6% seller coverage of closing costs (about $8,000)
The Appraisal from the bank came in at about $156,000.

At closing I brought a mighty check of about $150. I got a check from the seller for the deposits and prorated rents for about $3000. And I'm getting another check later for $4,500.

We are moving into one of the units, and the other three are currently rented. All the leases are up around July, but that's when my first mortgage payment starts. Now to remodel, repair, and rent!

A movement might not be the right word for it, but I found an article that showed some twitter and facebook posts about people #ventyourrent 'ing. Some where just people complaining but others were actually quite terrible.

At first I was worried what I would find, but after more searching saw that it was either
1) Actually terrible landlords not providing a habitable apartment, or
2) Terrible tenants just complaining about high rent.

This is a business, offer a good product and get good customers. Customers: signing a lease for a terrible apartment gets you a... terrible apartment.

Offer Value for Value people. 

#VentYourRental

Thanks @Zach Quick and @Joe Hughis,

I'm having a hard time following the correlation between the cap rate and the local area. If the properties make a certain NOI and are selling for a certain Purchase Price, what does location have to do with whether those numbers a good or not?

Is it just about making sure you're getting a good deal compared to all other properties on the market?

@Jeff B. I wouldn't be managing the properties.

Hello BP,

I was wondering when looking at larger apartment buildings and neighborhoods, when you get to 100+ units does the cap rate go down? I just looked at a 200+ unit apartment area for sale with a 7.5% cap rate, but I don't know if that's good. Obviously there's a lot of factors to consider, but these apartments are 96% occupied and are in pretty great condition in a B neighborhood.

@Christopher Giannino I just looked KW up, is there a reason they are located in a ring around West Virginia but not inside? I live in WV and am just curious if there's something about the state that scares KW away?

This post is awesome. I'm going to look into this.

@Ralph R. Smart Locks!!! That's so... smart. Question: How do those work with turning over to new tenants? Is it app based, a keypad, or what?

As "robots" or artificial intelligence progresses, so too do their uses for us increase. 

Property management could be a one-time expense of a few thousand dollars for a "program" that can market, screen tenants, explain leases, show rentals, and maybe even do a few light repairs. Property management now can be 5-12% of gross rent, but could be just a one-time expense for "hiring" a robot.

This could also work for hiring an acquisitions robot who can call up for sale apartments and negociate the price and terms to your criteria. They can do market research to offer the best prices both for purchasing and rents.

The only thing we really need is housing and food. What if the robots are programmed to farm for us out of our own lands or yards instead of relying on grocery stores? Wouldn't it be better for a robot to scoop up poop on the farm but provide the meats/crops for you?

Robots will always be tools, even when they can "think" for themselves. They will be programmed by someone. This can be both scary and helpful. The market decides which will win, would you rather buy a robot with a track record and security of always being helpful, or one that could be hacked to harm?