All Forum Posts by: Ralph S.

I think Allen and Jake's discussion is directed more to a licensed property management company, and less critical in Jake's case of being a small owner/landlord still learning the ropes.
The important point for Jake to understand are the fair housing laws and to just follow them.

There really is no law that dictates what order applications be processes or what documentation is kept. Those practices are for licensed companies handling a larger volume of applications, where the risk of coming under the microscope is much greater.

Just know where you can, and cannot descriminate.

Newspapers and Television websites. If it's a big company, it usually makes the news. Chances are there is some form of local or regional Economic Development authority, and they keep track of employers and companies doing both, moving in and moving out.

I agree with Chris, and a friend of mine loves renting to the military, but, some points to consider:
Their military affiliation hasn't prevented their 600 credit score.
With 15 years in, it's probably less of a concern, but I'd make sure the enlistment isn't ending before the lease.
My friend whines that in order to rent to the military, they have someone inspect and determine what they believe fair rent is, and they negotiate the rent down, and the service member gets a housing allowance based upon their determination of rent. Now, that was a few years ago, and Navy. Things may have changed. Point being, find out how it all works before jumping in.

Robert

First, welcome to BP!

Second, read up on the 2% and 50% rules of thumb that have been discussed in depth in the forums. Given the little you written about the property, rules of thumb are about the best I can do, and I think your numbers are a bit askew. For starters, the 2% rule would suggest 8 units at $800 per month would have an ARV starting around $320K (800 * 8 * 50).
It didn't sell for $60k (in 2008?), and in general, values have declined since then, and now there are $40k in back taxes. If the owner is in financial distress, most likely the property has deteriorated since then. May not be any value left. Maybe he should pay you to take this steaming turd off his hands, and if so, your repair estimate is way too low.
Not to say there isn't a great opportunity here, once you do get all the pieces of the puzzle and know all that has to be done, but you're far knowing that given what you've written.
Only then will you know if this is a project you can tackle, given your admitted status of "investing newbie" with "very little experience, and almost no money of my own to invest."

Good luck.
Ralph

Depends. If you update now, will there be a difference in the rent? In the short number of years you plan on holding, how much of the cost will be repaid by the increase in rent? I would think, not much. So, the question relies more on the cost of the updates and the expected ARV. Wouldn't spend $10k for a $5k increase in value, and don't think just cuz you spend it, the price will go up more.

Check the toilets. You don't say how many units are involved, but it sounds like a toilet was running. It's about the only thing I can think of that will go unreported by tenants yet easily cause the usage you describe.

Joel has some good points as to why it is this way. I did this, though, for a few years, averaging only 3-5 transactions per year (my own buys/sells, and friends, family and referrals), so I'll appoach my answer from a different perspective and maybe be a little more direct.

You'll be an agent with a newly minted license. You've met the minimum, and I mean minimum, requirements for education and passed your test. You have no experience other than your own in buying or selling a property, and never written a binding contract for others. You won't know all the ins and outs, you haven't got a support network behind you, and as part time you probably won't be to very many of the Tue morning training sessions.

You've joined a group with a very high failure rate, and worse, you only want to fail part time.

Full time agents will sometimes view you as competition, other times dred the endless array of newby questions you're sure to have (like, where do they keep the company letterhead? What do you mean I have to buy it myself? I'll never use 1,000 sheets! Can't I just get a couple sheets from you? I'll pay for it.) Others will view you as just another newbie, over your head and gone in a few months having done, really, nothing. Your broker will be in fear of you making some basic, innocent and costly mistake, reflecting poorly on him/her and the office, and being, in general, a high maintenance agent where they can expect less than average financial return from your efforts. Don't expect to find yourself with keys to the office or on desk duty anytime soon.
Potential clients will shun you as if you have the plague. Would you, Stephanie, if you were to buy or sell, use a part time agent with no or even little experience? Is twisting the arms of family and friends your plan to start? On the other hand, coming from outside the agent world, in your world you know of people who need to buy or sell, and thus at least there is the promise of bringing in clients that might have otherwise gone elsewhere.

That's a tough nut to crack. Even for those wanting to be full time, overcoming the lack of experience and getting their first deals behind them is the toughest.

But, with that being said, here is the approach I took (and I'll have to admit, I had a little advantage - a degree in RE and had just gotten my brokers license, and had several years of buy/fix/hold behind me). You have to be a catch like any other job. Someone they want. In the interview, you have to know the issues of being new, and show you know what they are and how you'll overcome them. Take the approach that they want you and you won't make all their worst fears come true.

Look for a large franchise office (lots of agents, better to make friends and find a mentor or two). Don't pick a company owned office, and not an independant (where you'll get the least help of all). Best if you already know an agent or two who can break the ice with the broker. A company that will have an internet based "quick start" type of training program for new agents. Ask, at the very beginning, about new agent training. Don't appear as though you need them to take a chance, find them and say I chose this office because....

I was going to (and did) spend hundreds of hours going through the office files - reviewing and learning how they wrote contracts, what clauses they used and how they were written. Which title offices were chosen. Which inspection companies they used, collected business cards, building my knowledge base of local customs and the market. Learned who in the office was going to be my friend, and who to avoid. Tons of experience in those files, not just how to, but names and numbers of service providers, prices for this and that. All without asking a single question. Impress upon them that you intend on being, and have a plan to be, lower maintenance than other first timers.

I knew I would have to produce, even if not much. Doing it as myself, for myself isn't an option when you're talking to someone you're asking to take a chance with you. I had at least intend (and I did) to bring in some business.

I had to realize I was the least experienced agent on the block. Reality. So, I gave back. My first three commissions, (and one was my own property), were referrals to other experienced agents in the office. All I got was the referral fee, and the opportunity to get an experienced agent to guide me through the process and answer questions. I paid them and gave them the credit in exchange for unlimited Q&A. It was never about commissions, it was about learning and getting experience (well, access to the MLS was a big thing, too). On the point of referrals, I made more that way than by actually doing transactions. I had to admit to myself that in the interests of everyone, even my bro-in-law, sister-in-laws cousin, etc., that a full time experienced agent was heads and tails better than using me. Doing this also went a long way to my being accepted by the other agents in the office, getting the best mentoring from the best agents, who no longer looked at me as being a bother.

First, there were points of light at the end of the tunnel. The first time a contract was reviewed without changes, then the, "oh, you did this right" when I knew to change a printed phrase in a contract and replace it with my own wording. My turning point, however, was when my broker, after the nth time I came with a contract I wanted her to review, said, "Ralph, you don't need me to review these anymore, you know this." The best, though, was when a closing agent at the title company who I had closed with several times, came into the room and explained that they were unexpectedly short handed, and asked if I would handle the closing myself. Realize that being able to walk the walk is a long way from getting a license, especially if you only do it part time. Too many think once they get the license, they're in and they can do it. Not so.

I wouldn't trade my experience, and am glad I did it. Might even do it again. I have kept up with the CE, so it's only a matter of sending money to the state.

But then, if all you want is MLS access and the ability to do your own, I agree with Realtyman. Save yourself from yourself.

Good luck.

All good stuff, and I'm glad it worked out for you, Mitch. But, to follow up, everyone has to work to find their own water level, so to speak. In my career, I've learned you have to be the chameleon, change your colors to match the situation. Sometimes you lead, sometimes you follow, and sometimes you need to be told which role it is.

Joel, this is a trust deed, according to the OP. Not judicial.
The publication of the trustee sale should include the name of the trustee, usually a law firm. Give them a call and ask to speak with someone about the property.
And, to echo Bill, just go with the flow, it's all part of the game.

Hi Ms Agent, welcome to my team. As a member of my team, I just want you to know that I require very little from you. Simply, "Yes, sir," "Right away, sir," and "how high, sir?" will do fine.