All Forum Posts by: Raman Saka

My experience has been bad both times I tried to be nice to somebody with bad credit. The last time was in Oct 2019 when we had to evict the tenant for non-payment of rent. She was very nice but very irregular with rent. It went south the moment I said I have had enough and that I can not keep sending her reminders for rent every month. I had 2 months rent as deposit but the eviction process took around 2 months (partly my fault with not serving the notices correctly) and then she left big mess in the unit. 

So my 2 cents will be proceed with caution, absolutely ask for rental references. Don't bank on the deposits, they will get spent very quickly in making the unit rentable again. My learning has been that I will keep my properties empty for a month but will not compromise on my criteria, running after people for late rents and evictions are a huge waste of time and money. 

@Michael Ealy Really great discussion with very practical tips.

We talk about numbers and profits on current deals, all that is great. But there is another very important number. The number of years you have given to building the networks and learning the in's and out of this business. Also its not just the numbers of years. Its the passion the drive and what else ( did you / can you give up) to be successful at this business. I know I am saying this to myself a lot these days -- Patience is a virtue.

I have a Corp IT job, there are days when laptop screen is the last thing I want to see after 10-12 hrs of meetings and discussions at work. But still that urge to get better, to have a bigger portfolio gets me back to the computer. BP has been a great resource, I keenly reviewed the Michale's land contract deal which generated $640 k profit. This and many other such threads work as goal posts for me. They have inspired me to get to 10 doors (mostly SF) and enabled me to get my first 2 unit duplex last year. Its hard but then I will not trade that experience of going thru it for anything :) 

Thanks Please keep sharing your insights.

This really is insane and the rule is almost asking for misuse. It will be great if city pays the landlords in case the evictions have to be delayed due to winter months. Being humane at others expense is easy..

Now don't get me wrong, I have seen bad things happen to good people. I have negotiated with the renters in these cases and given them some leeway. But in both cases when I had to evict renters for non-payment of rent, I felt they were banking on the fact that court hearings and collections process will be not my time's worth. So all these delaying tactics are not helping people but in fact telling them being lazy is OK. Right now people sometimes trade good credit with an option to not pay for 1-2 months. Changing 1-2 months to 4-5 months makes that trade even more lucrative and more people will be willing to have a bad mark on credit if that saves them 3-4 months of rent. 

I have been investing in WA state and asked by Agents to give references in DFW area. Then flew to DFW 2 times just to drive around and get a feel of different neighborhoods, schools and traffic flows. My philosophy is that real estate business is essentially a people business, you should NOT put people in houses where you can not live with your own family.  While in the target market I met with local banks and and few other people who can help me with funding. With that homework I zeroed in on specific zip codes and neighborhoods. Its still a work in progress and even after all this I missed few things which will be things to watch out next time I am closing on a deal. 

Hope this helps..

I am eagerly waiting for the gentrification of 75217 - Down town area. Its been hard to get a long term consistent tenant in this area. I am open for regular or section 8 renters. In the last 3 months, I have had to return security deposits to 2 renters who no longer wanted to be in the  house because of frequent break-ins in the neighborhood. I am an OOS investor and my SF house in this area has needing a lot of time and $$ 

Hi

I can totally relate to the situation you are facing. For me, I am in WA (king county) . The real estate market has been on fire and its impossible to have +ve cash flow given the prices and rents. So last year I researched and locked in on DFW area for future investments. Here are some do’s and don’t’s from my experience.

Do’s

• Get referrals for Property Agents , brokers and real estate firms you want to work with. In all appreciating markets there will always be people who want to make quick money instead of putting in the hard work needed in this business.
• Interview lots of Property Management companies, even after due diligence be ready to change PM’s when you are not getting the kind of attention and information.
• If you have found these 2 then you are on solid ground, most PM will take care of handling the contractors. Good ones don’t need too much supervision, but in my experience you will have to show PM’s that they need to earn your trust. Early on I found double charges, numbers not adding up all the time, but once you build the repo your PM should adapt to providing the level of details you want in their reports.

Don’t

• I did a blind leap of faith based on redfin, some county data research. Insist on better ground report and ensure neighborhoods, schools , crime and drugs data. In my search it will be tempting to see similar property coming in 20K cheaper, don’t fall for that. There always are reasons for discounts and sometimes the reasons will be out of your control. For example if you found about the crime in area after a property is under contract.
• Be careful and don’t have all the dependency on the agent or broker you select- I mean don’t always use the property inspector and lender who are friends with the agent. Get to know these people from other networks or acquaintances. You want to ensure that across your team your interests are looked after. Sometimes if you see that you have most skin in the game BUT are always getting paid last then challenge that status quo and change it.

OOS seems scary and it is because you have lesser control and there are more variables. But with the right team, you get cushioned from day-to-day hassles of being a landlord as well. There surely will time when that 6-8 % management fees seems like the best money you spent.

@Jeff Cichocki Awesome. Thanks a lot for your inputs. 

@Fred Shatzoff Thanks for your reply. I keep seeing posts on BP where people are putting in 10-15 k of their money and rest all from Hard Money Lenders or Private Equity firms. How can general newbie investors get access to such resources? I know people say find the deal first and funding will get into place based on the merit of the deal, that's seems logical. But I am still operating with the mindset I had when I got the first house - basically get pre-approved first and then look for the best house you can afford. Should investing be a different approach ?

Thanks

I am at a stage where I have few rentals. For sometime I used HELOC loans and my own money to fund my purchases. But that's slow and limits me to 1-2 purchases every year. I have talked to some Hard money lenders but the interest rate is much higher for these loans. Conventional loan is a hassle because of all the documentation needed for existing rentals. In this situation what's the best way to purchase Duplex's or Triplex's in DFW area with say 30-40% down ? I have a small network and seems like we can find deals where the purchases will be in a good location, will be priced below market and will have instant equity. Also equity should increase after repairs. I am primary looking for long term rentals.

I will really appreciate the insights.

Thanks

As other people have said there are pros and cons. I bought a duplex last year and one unit had a regular tenant and the other side had a section 8 tenant. The section 8 tenant actually kept her unit in great shape. Working with County Housing Authority  was painfully slow and time consuming, for whatever reason they kept sending the rent vouchers to the previous owner and we had to work with him to get our money back.  The renter in the other unit has not taken good care of the unit she is renting and I am glad her lease is ending sometime around April. So section 8 or not, it depends on people you are renting to. Setting up section 8 renters can be some work early on, but if you find a good renter then it will probably be less work than a regular renter.