All Forum Posts by: Amber Gonion

@Nikolay Afanas it is very unlikely, the underlying signs are not there. There are actually very good signs as far as delinquency are concerned, but with that said home sales have been slowing slightly. It really depends on the market, class and type of home.

Here in the twin cities I would expect a light retraction of prices in the luxury home market. The rest of the market has higher demand than product supply currently.

@John Woodrich we allow the 5th of the month for SSI payment to be able to be made. It also helps with people who get paid on the 1st and 15th of the month. I think it is more important to have solid procedures in the event that the rent is not paid by the late payment deadline. Having a set number of late payments in a year before non-renewal, late payment by the 10th of the month before legal action, etc.

@Grace W. Management should end up being 8-9% of rent, but does not include maintenance. That would include monthly, renewals, filling units. That cost goes down with multiple unit properties.

Good management with save you money bad management will cost you more than a bad tenant.

@Sevy Bialke finding an realtor that knows the areas would also make it pretty simple we see the prices and know before we even look what the area should be at most of the time.

In the metro (not all areas) there are in general neighborhoods that will trade at 1.2%, and other areas at .8%, but with much more appreciation potential. Be careful with your data, Frogtown for example was recently at about 1.2, but switched overnight to more of a 1% area and even lower. West side is still at the 1.2% area but you need to find a pocket that will come around in the next 10-20 years. We have guesses of what parts will based on other areas that do well.

Good luck with the house hack, just get into the game and you will be fine, too many worry about hitting a home run and wait too long and end up unhappy.

@Rhys Massengill we typically see the cash flow you are looking at after all expenses, Timmur taxes, insurance, management, maintenance, utilities, and repairs. We also include set asides for appliances and hvac, and another set aside for the next rehab in 20 years.

We look at wealth generation through cash flow, appreciation, and principal pay-down. The real wealth earnings are through the last two, cash flow is nice, but can be eaten up quickly by surprises and is taxed at the rate you are paying taxes at right now rather than at retirement rates. If you do the math and look at historical appreciation in 30 years I could have a property that broke even the entire year and be really happy with my return. Even if they appreciate at the inflation rate, you still would have principal pay down of the entire balance and be happy.

I hope everyone on the forums has a great 4th of July. I appreciate the opportunity we all have to invest and run our own business. We may complain about local laws or courts, but we have the opportunity to make our own futures.

On this day please consider giving to a veteran’s charity as many vets have given the ultimate sacrifice, and many more live day to day with mental and physical scars of combat.

@Christopher Cline

I know Grant Cardone just said to get out of real estate. We disagree the market is still solid, supply is low, builders are not out producing demand, rates are low, defaults are low.

While we know that things can change with the unemployment rate, and defaults may rise.

The twin cities market may level off for a bit, we don’t see a large fall.

I would hold on to your property and refinance at these great rates and reinvest. We have been hearing of this great fall for two years now. I think we are safe for the next year or two, maybe longer.

Don’t hang on for a great deal, opportunity costs of not making a deal are also worth considering.   I have plenty of properties that investors passed on over a couple thousand dollars two years ago and they now are worth tens of thousands more.   

For example clients that have waited for a few years for the right deal on a 150k property have lost $300/door after expenses  ($7200) plus principle pay down ($3700) and appreciation (approx 17k).   Even if you disagree with the numbers for appreciation and profit per door you need to see that waiting around for a great deal usually ends up being a poor choice. The deals will come along it’s usually best to already be on the train rather than waiting. 

@David Moore. I think PM is like anything else. Realtors, auto mechanics, retirement fund managers, lawyers, etc. if you have a bad one you think they are a waste of money, with a good one they save you the money that you pay them through experience and knowledge.

Often bad mechanics will try fixing cars by buying and replacing parts. Sometimes it’s smarter going to a trusted mechanic (that is a little more expensive) who knows how to troubleshoot and replace one part for less than the cost of a bad mechanic that will try a bunch of different parts.

@Ben Walsh Hi Ben, we would be happy to show you how to fix and flip. My husband is experienced in hundreds of rehabs. We are investors and agents so we understand what improvements make money and which ones are just a waste of money.