All Forum Posts by: Sharon Tzib

What's the average unit size of your building(s)? I know some PM's wont manager over/under a certain size. Could help getting an appropriate referral to know this. I'd love to see the referrals listed here, as I'll be in the market for a company like this as well soon, in the 10-20 unit range, Class C.

Brandi, this property does not appear to cash flow, making it a bad deal. The 50% rule says that 50% of your rent will go towards expenses (taxes, insurance, maintenance, management, vacancy, etc.). What's left after that is used to pay the mortgage.

Assuming the $1250 rent your friend quoted you is attainable (you'll need to verify that too), cash flow would look like this:

$1250 rent x 50% = $625 - $882 mortgage payment = -$257 negative cash flow

So, every month, you'd be in the hole $257. Even if you think you can manage and do the maintenance yourself, you still need to budget for these items before purchase to make sure if something happens and you can't, you aren't coming out of pocket.

I wouldn't advise purchasing this house either unless you could purchase outright with a better mortgage (and the price would have to be somewhere below $90K), but you say you can't qualify for financing, so that doesn't seem to be an option. Hope this info helps.

BP's Danny Johnson has a great form for this:

http://www.flippingjunkie.com/media/House-Inspection-Checklist.pdf

I'd recommend using it to make sure you don't overlook anything.

"Am I crazy for considering this strategy to find my first deal?"

No, at not all. Many people use yellow letter and post card campaigns to find motivated sellers. Usually the type of seller you are targeting can somewhat dictate what kind of deal you're going to get, so that you can be better prepared.

For instance, if you mail to out of state owners, you may find sellers whose homes are in a state of disrepair and lend themselves to either wholesaling and/or flipping. On the other hand, if you target landlords, you may find properties who lend themselves to wholesaling and/or buy and hold investments.

Whatever you decide to do, your ability to purchase, whether through cash, financing, etc., is going to also dictate the kinds of deals you can do. You might want to take some time to scour this site, and especially the podcasts, to see how others are doing this before you spend money sending out letters.

I'd recommend you have a full business plan written out - Sam Craven's recent podcast may be a great place to start. Good luck!

I agree, Joel. We're on the same page :)

There's a great form in the Files section with Property Manager Interview Questions. Tons of food for thought in that doc.

Elisabeth had a wonderful list. Couple other things I would add are:

- Verify rental comps for appropriate pricing

- Advertise the property for rent

- Pay expenses for the property

- Perform periodic property walk-throughs

- Maintain excellent relationships with tenants in order to encourage tenant renewals

Many times, landlords and property managers forget that the tenants are their customers. If you screen a tenant correctly, they are paying on time, and taking good care of the property, then you want to make sure the property manager treats them well so they want to continue to stay (i.e. return phone calls, address their reasonable requests, etc).

Additionally, if you are consistently having horrible tenants placed, then you need to find a new PM.

"Specializing in NNN and apartment buildings I strongly disagree with this statement."

Hey @Joel Owens please don't take my comment out of context. My comment was meant to be viewed in total, not one paragraph extracted to make it seem like I'm completely anti-NNN. I have heard many stories on BP and other forums about landlords who have had their NNN buildings sit empty for months and years, so while perhaps you personally don't have that issue in your area, please don't lead this poster to believe that it is impossible.

The first part of my statement acknowledged that yes, if you buy right, it can be a wise investment too.

Now perhaps if he chooses to work with you, as you offered early on in this stream, you can steer him to a great deal - he'd probably be wise to do that since you have gobs of experience. And as the last part of my comment stated, having a great team is most of the battle, if not all.

I was simply trying to offer both sides of the story. I would also like to say that part of my comment was referring to the fact that people will always need housing, which is one thing that makes multis more attractive (to me at least, maybe others will disagree)- maybe I didn't make my point as clear as I should have.

Sure @Ramon Jenkins . Realtor, property manager, insurance agent, contractor/handyman, cpa, attorney, and for acquisition, mortgage broker.

It's easiest to start with a referral to one or two of your team members, and then build your team via referrals from those to the others.

Well I wouldn't evict a steady paying tenant just to do repairs ever. Would just wait until they leave to do the make ready. If the existing tenant is ok with the place the way it is, why kick them out and take your chances on the next one being just as good? Or perhaps the repairs are such that you can work with the existing tenant to get them done. Just not sure of the urgency to get repairs done here.

On the dog tenant, I understand your hesitancy on that. You can either give them notice per the lease, or institute a pet deposit policy and ask that they remit that in order to renew. Good paying tenants are hard to find - dogs or no dogs - tough call.

Hope it all works out for you.

NNN's are great if you have a very, very long-term tenant in an extremely economically stable area. Getting this, however, means you will pay.

The first time one of your NNN's go vacant, and it takes you years to find a new tenant, you'll understand why people like multis.

I think the key for you, no matter which way you decide to go, is to accept that you are going to need very responsible and trustworthy team members. I have U.S. rentals while living in Belize the last several years and could not do so without my team. Good luck!