All Forum Posts by: Rodney Sums
Rodney Sums has started 25 posts and replied 558 times.
Post: Are you investing in Office Space right now?
- Laveen, AZ
- Posts 583
- Votes 527
Quote from @Benjamin Aaker:
I know that Zoom is taking over the office, but I had a 1031 exchange to do and closed on a Class B office building downtown a couple weeks ago. Out of three suites, there are two vacancies, and it's underwater, but will be cash flowing when I get my next tenant in there, even with a reduced rent. It's my first office building. I really think that office will come back as people realize that working from home can't be done 100%. Is this speculating, timing the market, or simply a good investment in a depressed time? I'd love to hear what other people are doing right now in the office sector.
This thought may be way off base, and I know little about CRE but just an idea:
If it fails to perform as an office how hard would it be for you and other tenants (if applicable) to get the building zoned for other uses or, how flexible is the zoning?
Can it be repurposed?
Post: New Property Manager wants tenants to sign new lease with them
- Laveen, AZ
- Posts 583
- Votes 527
I get the feeling their lease is not identical to yours and may have provisions in it that aren't in yours. If it was, there wouldn't be much value in making a new one. I can appreciate the tenants feeling no incentive to sign another contract after they already signed one that's still in effect. This doesn't mean the PM can't work for you. When the leases expire, you have the option to present them with the lease drafted by the PM.
You should be alright
Post: Annoying tenant - how should I address this issue....
- Laveen, AZ
- Posts 583
- Votes 527
Quote from @Mike Shahi:
I have a tenant living in my basement that pays on time and keeps the space clean. She's been here 2 years and recently purchased a new construction home with an expected completion date of December 2022.
She has a very interesting personality and can seem demanding. Up to this point I've seen used good emotional intelligence and catered to her every need. I've addressed even the most minor issues like changing light bulbs when I can easily put it on the tenant.
What has bugged me the most are her constant phone calls about noise. She seems to get anxiety and is constantly on edge. I'm getting tired of the "what was that noise?" phone calls which ends up being nothing but banging from utility trucks or the tapping sound from rain- seriously?. The house is secure with bars on the windows, cameras and security doors at each entrance. One time she asked if I was home and stated that she hears someone walking upstairs. I was about 10 minutes away but I told her if you feel unsafe, to call 911 and the next thing I know my house is surrounded by police.
Last night was the last straw when I received a phone call at 1:30am asking to look at the security cameras because she "hears something". I looked out the window and nothing. I let her know that I don't see or hear anything and she stated that she could just be going crazy - you think?
I feel like she has crossed personal boundaries and it's become unacceptable behavior. A part of me wants to talk to her, maybe shoot over an email to put in a place a process for emergencies and what exactly constitutes as an emergency. I don't think I have the legal right to ask her why she behaves this way- "have you been robbed at gunpoint? Had a previous house broken into?"
We are at the finish line with her lease so a part of me wants to let it go. I don't want to create an enemy and then having her file constant complaints out of spite. I'm not really sure what to do- talk to her or let it go and just live with it.
It appears the two of you have a different perspective on what type of relationship you have. This may be enhanced by the fact you share a roof. You may be able to speak with her compassionately to understand where her anxiety comes from while politely setting boundaries so that you're not receiving phone calls at all hours. Let her change the light bulbs and be an adult as well. It's quite possible her behavior is clinical in nature requiring assessment by medical professional
Post: Market Crash ?? Not Yet, But it sure has slowed down - Stats
- Laveen, AZ
- Posts 583
- Votes 527
Quote from @Account Closed:
Metro-Level Summary: June 2022 from Redfin
The table below measures pending sales that fell out of contract as a percentage of overall pending sales, and is sorted from highest to lowest. A metro must have had at least 1,000 pending-home sales in June 2022 to be included.
| U.S. Metro Area | Pending Sales that Fell Out of Contract as % of Overall Pending Sales |
|---|
While this has been a topic of discussion before,
Did they happen to share how it's trending?
Post: Squatters pooping on my lawn
- Laveen, AZ
- Posts 583
- Votes 527
Quote from @Dan Thomas:
I've got a flock of geese living on the lawn of my lake front str. I can't shoot them because it is too close to other houses (and out of season). How do I keep these things from pooping everywhere? I tried an organic spray but I think that attracted more!
Post: Enforcing Rules at a Complex that is known to have issues...
- Laveen, AZ
- Posts 583
- Votes 527
Quote from @Delina Ortiz:
Hey ya'll! I work at Real Property Management (RPM Agile) of San Clemente as a property manager and agent. I just onboarded an 8 unit apartment complex a month ago and it is now time to begin enforcing rules and regulations. It is up to me to fix the parking situation, coordinate a major cleaning in the common areas, and much much more. With that being said, how can I safely, legally, and kindly but firmly enforce the rules that need to be followed to clean up the mess that is this complex? My thoughts were maybe type these things up and mail them out / post them in the complex. I don't know how that will land and if it is a good idea. What have some of ya'll done to clean up the act of your problem tenants in a complex? Trying to be as effective as possible on my first shot so that they will take me seriously. I was able to get every single unit signed up online and pay rent on July 1, so they respect me, but how can I make sure I keep that up while also respecting them? Thanks!!!!
Does this property have an HOA? If so, rely on the CCRs and local laws to enforce every rule. Issue fines when possible. Send to attorney for collection if they don't . That wakes people up and or makes them sell and leave .
If this is an apartment building, you have the lease terms to enforce. Decline lease renewals for those that don't cooperate and make em move. Along with local laws enforce and evict if needed. Throw things away as permitted by law and the lease terms. Seeing as you're in California the evictions may come with challenges.
It really a "Nike, just do it" kind of thing. Once you give fair and polite notice, follow through. It's likely in the condition it is because the owner or previous PMs allowed it.
Post: Should I sell my breakeven rental?
- Laveen, AZ
- Posts 583
- Votes 527
Quote from @Jim Piety:
@Rodney Sums @Michael Gansberg
Yes,I removed the maintenance and capex because it was recently renovated and everything is new. But I’ve re-added 5% maintenance to be more realistic.
With the cash out refi, I used it to start a successful STR that is covering the losses. My plan with selling the property would be to reinvest into another STR.
I get that San Antonio on average is appreciating. But this specific neighborhood has a long ways to go.
Nonetheless, I am starting to lean back toward holding since it’s not really costing me (yet), it is a low interest rate, and the high interest rate environment we are in would make it more difficult to generate the returns I want from the sale proceeds.
In what scenario would you say it’s better to sell? What information should I be looking for?
It would depend on your investment goals.
If in your shoes it would have to be a property with significant cash flow to be made that justifies selling your current property and realizing losses from the cost of the original loan, the cost of refinance, and the cost to sell.
Some may suggest it's worth taking a loss if it gets you in a property with better growth potential however you're entering the speculation zone doing that.
How much research have you done about the neighborhood to see if any other plans or developments may come about that would improve value in the long run? In growing metro areas, bad neighborhoods are often the target for new development as investors get in cheap, improve, and increase value....like you did.
Unless you intended this to be a flip, consider what your vision was for the property investing 60k to make it new again. If not a flip I suspect it was for the long play. It may need time to season before producing desirable numbers.
Post: Should I sell my breakeven rental?
- Laveen, AZ
- Posts 583
- Votes 527
Quote from @Jim Piety:
Quote from @Rodney Sums:
Quote from @Jim Piety:
I purchased a fixer upper through a wholesaler in March 2021. After more repairs and expenses than expected, i could not sell the house for a profit. The house would not appraise. So instead, I refinanced, pulled out ~50% of my invested capital and rented it out. Since September, it has been breaking even. If it was located in a fast appreciating neighborhood, I’d be okay with the zero cashflow. However, I am thinking it is a better play to sell, get back most of my capital, suffer a small/minimal loss, and reinvest the cash into a different, faster appreciating market.
Are there any other options I should I be considering? Should I sell or hold? Appreciate everyone’s advice!
Share numbers 😊
You cash flow calculations
Purchase price and cash in
How much you pulled out and at what cost
What its worth now as to see how much a loss you will take
Wha other investment you want to make with proceeds from sale and why it's better than what you have
Here are the numbers: https://dealcheck.io/s/-Mj79q8...
Cashflow:
Rent: $1095
Operating Expenses: $463
Loan Payment: $530
Cashflow: $14
Cash Invested: $61,015
Cash-out Refi (in Oct): $26,632
Remaining Cash in Deal: $34,383
Appraised for $127k when trying to sell, appraised $155 for refi.
Comps suggest can sell for $150-$155. If I sell for $155, that's a $2,500 LOSS but would provide me $30k in capital to reinvest.
I could wait for the property to appreciate but I'm not optimistic it will appreciate well. House is in a bad neighborhood.
I concur with @Michael Gansberg regarding your cash flow calculation. You'd technically be in a negative cash flow situation once you include those. Fortunately you rehabbed this place. Hopefully it would be a while before you'd have to realize those expenses.
From the looks of it you traded in the cash flow for the cash out refi proceeds. Your cash flow wasn't going to be that high if any, had you left the refinanced money in the deal.
What did you do with the refi money? Any new investments? Consider the benefits you received by getting some of your cash back.
You're going to lose more than it appears. you paid over 4k to pull out that 26k. Then you're going to have to pay listing and selling fees. It would remain to be seen if you'd have to make any concessions for the buyer resulting in more loss. You're going to come out of it with fewer dollars than you started with, have to go find a better investment with interest rates much higher than what you have on this property in a market that may be shifting due to rates and inflation, values went up, sellers don't want to make concessions, while realizing a loss. You didn't do all that work to walk away 6 to 10k short.
However if there's a better performer out there you could get with your money back even at a loss, or losses increase on this property, then it's worth considering a sell.
You have a low cost property in a fast growing area. As you've read, there's lots of concern about a recession. Low cost properties fair better in those situations. You have a low interest rate.
This deal started without not much meat on the bone, making it appear less appealing in the short run. I'd lean toward holding it, and let it do its work.
In the meantime consider cost saving measures:
Learn how to self manage, saving you 10%. You can always let PMs do the screening and placement if you're not confident in that regard.
Prolong and reduce vacancy expenses by getting tenants on longer leases (only if rents aren't rising rapidly in your area)
Post: BRRRR Method Using HELOC with Rising Interest Rates
- Laveen, AZ
- Posts 583
- Votes 527
Quote from @Andrew Postell:
@Aj Malempati would you mind sharing which lender you are using for an 85% cash out on a multi-family property? I think we would all be very interested to know who that is.
Owner occupy. That's why he got that LTV
Post: Should I sell my breakeven rental?
- Laveen, AZ
- Posts 583
- Votes 527
Quote from @Jim Piety:
I purchased a fixer upper through a wholesaler in March 2021. After more repairs and expenses than expected, i could not sell the house for a profit. The house would not appraise. So instead, I refinanced, pulled out ~50% of my invested capital and rented it out. Since September, it has been breaking even. If it was located in a fast appreciating neighborhood, I’d be okay with the zero cashflow. However, I am thinking it is a better play to sell, get back most of my capital, suffer a small/minimal loss, and reinvest the cash into a different, faster appreciating market.
Are there any other options I should I be considering? Should I sell or hold? Appreciate everyone’s advice!
Share numbers 😊
You cash flow calculations
Purchase price and cash in
How much you pulled out and at what cost
What its worth now as to see how much a loss you will take
Wha other investment you want to make with proceeds from sale and why it's better than what you have