All Forum Posts by: Bart H.

Ok, I could say our goal is to close on our first house of the year in January, but that would be kinda cheating.  We are supposed to meet the notary to close on our next rental on Tuesday the 2nd.

I honestly think this year, we might look for one other either BRRR or fix and flip later in the year.

We have a rental we bought last year for cash.  We have a few nice choices, either do some minor work and leave the current tenant in place.  Or else we do a reasonably amount of rehab and get a new tenant at a higher price point.  Or else we do a full rehab, maybe add some square footage and do a full flip. 

My inclination is minor rehab, refinance it and keep the renter in place and just cash the checks, either way, we will  either sell, or refinance to get our cash out.

I think we are at a good time and place for now, but I would like to end 2018 a little more flush with cash and long term notes.

So net net, we plan on buying one house, refinance another and maybe do another BRRRR or flip.

 Clark, there is a good meetup that happens at the Richardson Fox and Hound about once a month.  @Dana Chun usually sends a note out about it.

Also there is a meetup that happens about once a month organized by @Nick Hughes and that groups meets at the Gingerman.

Both are great groups, both have a lot of people just getting started and we try and attend them.  Cheers!!!

 I think you will find in Dallas there is a real shortage of 2-4 unit properties.  Very few come on the market, and the ones that due are usually in terrible shape or so overpriced that they don't come close to cash flowing.

We owned a duplex on Live Oak near Skillman, bought it in 2013, we bought it and there were multiple offers, and we sold it in 2016 for a really nice gain with multiple offers.  As you mentioned at some point small multi family  values are determined by cash flow and you will be buying and selling from an investor, ad that is why we sold.

I will say, not knowing your situation, what worked out for us as we started our REI journey is we sacrificed and lived in our first few properties before renting them out behind us. (lived in 5 different properties since 2012). I would HIGHLY recommend buying a 204 unit property and living in one of the units. IT allows you to get owner occupied interest rates, lower money down etc.

And honestly you can go with a little higher valuation than a pure investor, because its your house, and the risk is a lot lower for the same reason.   Our first duplex had what I am sure would have been considered mediocre numbers had we asked for input from BP, it more or less was a couple hundred dollars in cash flow/month when I did the model.

In our case we determined we could afford the payments on a house for x $'s, call it 280K.  so instead of one front door, our house costing 280K had 2 front doors, and we only lived in one half of our house.  So if we hated being landlords, or couldn't find renters, it was no big deal because we bought a house for our $280K budget.  Any money we got in rent was gravy. 

The point is it allowed us to step into the REI game in a way that we couldn't have done. I highly recommend a house hack for someone who is just starting out in Real Estate, its the safest way to get started Imo.

 There isn't any reason you would have to reduce the rent for a tenants short term disability.

I don't know if you would be allowed to qualify him on the reduced rent, if they have been a great tenant, why get rid of them?  Usually the short term rate is 60% tax free, so their take home pay shouldn't really change, and if it is short term disability, I would assume they would be back to work in the near future.

Plus, my guess is you couldn't legally get rid of someone based on a disability, its a protected class.

My sense is painting the walls is fairly common.  If you have a higher end price point, you more or less will need to have at least a few walls painted/patched.  We use the same color paint in all of our houses so that we can paint just a small portion of the walls.

Unless there was actual damage, ie writing on the walls or a large hole in the wall or something, imo the paint is regular wear and tear.

The carpet cleaning, I would ask why it was being cleaned again after the tenant supposedly cleaned it.  Minor wear and tear or small stains I think would be wear and tear.  A quart of motor oil, and I would be charging the tenant.  IMO you might consider changing out the carpeting sooner or later to something that would hold up to tenants a little better, lament flooring etc.  I think it will save you money in the long run.

The price the charged you on the carpeting seems about right, maybe a little on the high side, ie sounds like they just hired a retail cleaning service vs paying a handyman to do it.  Not obscene, but I would maybe look at how you could lower the cost in the future.

Vinyl floor, was it badly stained before the old tenants moved in?  If not, this sounds more like damage than wear and tear.  If it was damage, then I would charge the tenants.  Depending on the square footage, it sounds order of magnitude about right in price.

We typically find our turns are in that $700-1,500 range as well.  Paint, spackle, make ready clean, maybe some restaining or refinishing of warn spots on the hardwoods etc.  And I don't know what it is, but I swear just about every time we have a new tenant, we have to replace at least one appliance.  Seems to happen every time.

 The person who owned them was super wealthy, like near billionaire status iirc. 

Pure speculation, but I assume the goal was to take control of the whole building.  It sat in a prime spot near downtown and had views of the city.

 Jay, quick question, when you say 100-150K/month for the lot, is that for suburbs?  It seems as though here in dallas we are seeing a lot of houses being bought 250-350+ as tear downs.  Maybe the sales price is a touch higher, 700-900 ish. 

I am asking because we are sitting on at least two properties where I think the long term play is to tear them down and rebuild.  One is a multi family zoning just at the edge of downtown Dallas, the other in a higher end neighborhood where the house has little economic life left, its livable, but decisions have to be made soon on the roof, foundation and other parts of the structure for the long term.  And I think we might be better off as a tear down/rebuild.

 Shot in the dark, is there any chance all of those other condos are owned by the same person?  I had a buddy try and buy a condo in N Oak Cliff and he ended up finding out that something like 3/4ths of the units were owned by one person.  And he had a similar issue, in that couldn't get financing on the property.

 You are going to see a huge assessment, sounds like massive mismanagement.

Unless you know the core issue, and know that it is being addressed,  I would stay away.  

Its also doubtful you will be able to get financing.  Are there limits on how many units can be rented out