All Forum Posts by: Richie Thomas

Thanks @David Hutson.  I got the $76,000 figure from the "Last Sold" price on Realtor.com.  The $150 per month was partially a safety cushion, but also for things like snow removal, yard maintenance, etc. Living in California, I really have no idea how much it costs to have snow shoveled. :-)  I do like the idea of charging a bit less in rent if it means a much lower vacancy rate.  I saw the updated photos on Mid South's website, and I agree it looks much improved from the listing photos, while not being over-rehabbed for its area.

On an unrelated note, I'd be lying if I said that the prospect of BBQ ribs in Memphis played no part in my interest in this deal.  Lesson learned- never make real estate decisions on an empty stomach. :-)

Hey y'all, I'm an aspiring investor from California who is considering Colorado as an out-of-state farm area. I'm analyzing a property in Florence, and I've got a couple questions about the area (expected rents, ARV estimates, etc.). I figure talking to real people would yield the most up-to-date info, so I'm wondering if anyone can recommend a local realtor or property manager who they hold in high regard. Thank you in advance!

@David Hutson I'm glad I found your post.  I'm an aspiring investor who is looking out-of-state, and while I hadn't considered a turnkey operator until now, it sounds like a lot of folks have had good experiences with Mid South.

I took the liberty of checking out their website and analyzing one of their recently-closed properties.  I couldn't make the numbers work but I thought I'd post the calculator results here anyway, in case anyone has more accurate information or can correct my assumptions (which are always hard to gauge accurately from far away).  If you have the time and bandwidth, I'd be curious to hear your opinions on the accuracy of the numbers, given your recent move from NorCal (where I currently am) to the Memphis market:

Realtor.com Link To Property

Calculator results

Mid South Property Description

This isn't to imply anything good or bad about a typical Mid South deal.  I'm mostly asking in order to get a sense of the local market and up my investing game.  If there are better examples of profitable Mid South deals, I'm happy to run the numbers on those as well.  Thanks y'all!

Oh also, GreatSchools.org can be useful.  You plug in a property's address, and it shows which elementary / middle / high schools are assigned to that property, along with ratings for those schools on a scale of 1 to 10 (10 being the best).

@Ty Upshaw any update on the Birmingham deal?  Any chance you'd post an analysis of the deal from the BiggerPockets calculators?  Alabama is a pretty hot market these days, I'm super-curious to see specifics, and I bet others are too.

Also, how did you hear about this deal?  Was it on- or off-market?  Thanks for your post, hopefully this deal works out well for you.

Two things to note for short- and medium-term rentals- you'd need to furnish the properties in full, which adds to your up-front capital costs.  Also, property managers for these kinds of rentals charge a higher fee, typically 20-25%.  That said, it's may still be worthwhile to consider this option, since short-term rental rates can be significantly higher than what you could make renting to a normal tenant.

@Duane Brown I just read this thread in another BP forum, and learned about an IRS form called Schedule E.  It sounds like receiving this document from the landlord would be an even better step than asking for the rent rolls, since it'd be a crime for them to provide false information on a federal form like a tax return.

@Tracey Callison I'd agree with @Alexi Schreier that nothing will take the place of the opinion of an experienced professional such as a local REALTOR, property manager, etc.  There are shorthand techniques such as comparing the median local purchase price with the median statewide price (you can find both on sites such as city-data.com), but this data isn't nearly as up-to-date (or as granular) as what a human being can provide you.  This is especially true in smaller towns, where data points such as rent rates for specific neighborhoods and property types (2-BR, 3-BR, etc.) are harder to come by.

Instead, try posting a message in BP's forum for your state, and see what replies you get.  I've done this for some out-of-state properties I've considered in the past, and it's been super-helpful.  Plus, your question will be preserved for posterity, so other BP members who are following in your footsteps can benefit from the answers your post generates.

@Catherine C. before giving up on this deal, it may be worthwhile to consider other income strategies.  You mentioned the property is near an expensive private university and is a year-round tourist attraction.  Have you thought about turning it into a short-term rental?  They're catching some flak in upstate NY, but the regulatory environment there is significantly more friendly upstate than in NYC.  It may be worth checking out AirDNA's market report for the town the property is in.  I have no affiliation with them, I just like the granularity of their reports.  Alternately, you could consider medium-term rentals, i.e. marketing to visiting scholars at the university (who may be less price-conscious if they're receiving a stipend from the school).  FurnishedFinder.com has a great stats page which shows the monthly rents charged by the properties on their site, and it's searchable by city.

Hi @Duane Brown, it's definitely in your interest to verify any numbers you receive from the landlord.  Ask them for utility bills and check with the county to ensure they're accurate.  Depending on the county, you may even be able to use those bills to look up the property on the county's online portal.  This might give you access to multiple months' worth of bills, giving you insight into seasonal fluctuations.  Access to these bills should be a condition of moving forward with the deal.  Same with the landlord's copies of rent rolls, tenant credit reports and background checks, etc.

Also, when was the property built? If it's old (or even if it's not), it might be a good idea to pull building permits to see when it last had work done to the roof, plumbing, electrical, etc. If no permits were issued in the recent past, this could indicate that the useful life of those major expenses is nearing its end. In this case, you may want to bump up your CapEx + Repairs budget a bit higher, to around 20%. If the building is still pretty new, this is less of a concern, but if you're paranoid (like me) then you'll pull the permits anyway haha. If you do find something, this is useful information to bring to the seller to re-negotiate the purchase price, assuming it's part of your contingencies.

I'd +1 everything Jaysen said, especially about budgeting for a property manager.

Lastly, have you considered investing out-of-state?  Delaware is an hour away from Ewing, NJ and has a property tax rate of 0.56%, the 6th-lowest in the nation.  That beats the heck out of paying $918/month in taxes.