All Forum Posts by: Ross Sumner

http://www.zerohedge.com/news/2016-11-11/what-hell-suddenly-going-foreclosures My plan has been to flip 5-6 houses to acquire rental real estate with all cash. With foreclosures going up at a high rate, what does this mean for the market? Does this mean rental property is worth more now?

Thanks a lot for the responses! I plan to get started ASAP.

I am beginning the process of starting a property management company in Richmond, VA. I have rented from a handful of property management companies during my time in Richmond and I had a poor experience with all of them. Maybe I am a bit biased, but I think I was as easy-going of a tenant as anyone could ask for and I could not have had worse experiences with property management companies.

I want to do this because this will be a great start for me to get my buy and hold properties and learn how to manage them efficiently. My question is, what are property owners looking for in a property management company? I have a lot of ideas of how to make the tenant experience, which is important to keep good tenants, but I want to get a good feel on how property owners expect their property management companies to manage their investments.

Thanks in advance!

Thanks @Daniel Harnsberger! That is along the lines of what I am interested in finding out. 

I am meeting with the Director of Economic Development in a city near Richmond, VA that is in the beginning of a rebuild. I want to be one of the first investors that get into the city but I do not want to be too early/wrong. I have questions about unemployment forecasts, population forecasts, plans to increase economic diversity, and how aggressively they plan to go after companies relocating to the city. Knowing I will get some fluff answers I will be asking follow ups to those questions. Does anyone have ideas of questions I should ask in addition to that? This is my first time sitting down with a city official in regards to investing in their city so I do not want to waste either of our time. Thanks!

I am currently looking at a duplex in a D area. One unit is occupied and the other unit needs work. Once the second unit gets worked on, the duplex has a cap rate in the high teens. Another plus is that the city has a plan in place, and have broken ground on 17 charter schools, to improve the city. I am in the process of putting together a packet for investors and I want to put a piece in there about the city's plans to revitalize and improve. I have been looking for some figures to show how charter schools may help a city but I have had trouble finding measurable data. I see a lot of opinion pieces saying "charter schools help" basically but I can't imagine that is good enough to move the investor's needle. Does anyone know where I could go to find some useful information? 

Being a landlord is more beneficial than an owner occupant. If you rent out the property you are able to deduct the same stuff as if you lived there as well as utilities, repairs, maintenance, depreciation, and any other expense you may have for the property. With depreciation you will most likely end up with a tax loss. You will not be able to deduct the loss (unless you have passive gains to offset the losses) unless you are a "real estate professional" which the IRS determines to be contributing 750+ hours a year. 

Hopefully this will end up getting you thinking and if you have any other specific questions you can let me know.

I may actually already have a ratio that shows the effect of the 10k repairs. I have shown IRR which includes the 10k so I should leave the cap rate alone.

I have a good deal I want to present to a few investors but I have a basic question about cap rate that I am hoping someone can help me out with. So with the current list price, the cap rate is 23% assuming the duplex is fully rented with a 2% vacancy factor. This is for a duplex where one unit is currently filled and the other needs approx $10k in repairs before it can be rented out. What I have done in my presentation is add another tab to the spreadsheet and included 10k to list price and added a note saying for repairs. I feel like that gives a better representation of cap rate, which would now be 17%. I am doing this because I will be asking investors for that 10k as well but I have not seen any discussion on this so I want to make sure I am on the right track before I look like a big fool. Thanks!

I really appreciate everyone's feedback. This one question I asked has already taught me a lot and will help me find a better property and has given me a clearer idea of what to look for.