All Forum Posts by: Sam Booth

I have only had rentals a few months and my property manager (out of state rental) was great at first but now he has spent a large amount of money on seemingly small items like $1500 for a branch removal that fell off a tree in the yard, hundreds of dollars of yard cleaning (unrelated to branch falling) (Tenant is supposed to do this). In our agreement he was not supposed to pay over 500 without asking me, other things like this have been done as well without telling me. I am called him out on this and he never responds and now he doesn't seem to ever know what maintenance is being done or anything. I have also asked for photos multiple times of any maintenance or repairs and he now says that he will not provide photos every time because its not possible.

Any advice?

1) I could sell the property, the rents are high so the likely hood of this working out is good and I can relocate to a local market where I can manage myself (I have a flexible job that will allow this). The property is in excellent shape currently.

2) I could try to get another property manager but the problem with that is I could fall into the same situation.

What's your advice?

Terminate the agreement, get a new PM and I would not pay any bill over $500 that was not authorized.

I can definitely try. They take the expenses right or of the rent so I never see the bill to approve. How do I terminate, do I need a lawyer?

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Hi all,

Any advice?

2) I could try to get another property manager but the problem with that is I could fall into the same situation.

What's your advice?

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Quote from @Andrew Ross:

Hey @Tom Shallcross, thanks for the insight!

Do you have to have the property rented before they will list or will they sell un-occupied properties?

I put in a listing and just got a message back that the earliest I can schedule a call to review the property (before it will even list) isn't for two weeks... That's not giving me a lot of faith in their expediency but I'll give it a shot.

Did you end up selling your property through Roofstock? I am thinking of trying it to sell my 2 properties.

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Hi all,

I am thinking about selling my 2 out of state properties with tenants and going for something more local. Should I sell with tenants in the home or wait till the leases are up? Both homes were updated fixed up prior to the tenants moving in and are in decent areas.

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Quote from @Jonathan Tang:

Hey everyone thanks for commenting! The property that I am buying is about 4miles from the city and about 2 miles away from the lake and a mile from the casino so its in a decent location! Buying a property on an acre land with 2 separate houses and a workshop. Will be getting about 3000-3200 in rent for the entire property a month. Anything I should be worried about or should know about Oroville? I picked Oroville because I got a really good deal on the property and the owner just wanted to walk away.

Hey there! I am in Sacramento and just curious how your Orville rental is doing? I am seeing some possible cash flow prices that direction and wondered how the area is. Barely ever been over there before. Researching currently. Thanks so much!

1 Vote

Quote from @Nathan Gesner:

Quote from @Sam Booth:

Start with the dollar amount, then reverse engineer it and adjust it regularly based on property acquired and performance.

Let's say you want $10,000 a month. That's ten houses, fully paid for, and renting for at least $1,000 each. Keep in mind all expenses because you may not actually earn $1,000 a month from each house.

But what if you buy three single-family homes and then a four-plex? You may be able to accelerate your growth by purchasing different types of property.

Great idea! I have been thinking about multi family but wasn't quite sure as far as quality of tenants and more turnover costs. Wish there was a way to compare to single family homes easier.

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Quote from @Tiamo Wright:

The answer depends on how much you currently make and how much you spend. I would even say the higher focus being on the number you actually spend since lots of folks live outside their real salary.

Let's say you are a teacher that makes $35k a year and your take-home pay is $28k and you are living fine off of that then you take that number divide it by 12 month and that would be the monthly net income you would need to live off of so in my made-up example $2,333/month. So at your estimate of $400/house cash flow after expenses, CapEx, etc then you would need 6 houses.

The variable changes on how much the market you invest cash flows, and how much you spend so would need to make up with that rental. But once you have those numbers the estimate on homes becomes a bit easier for a closer guestimate.

That makes sense! So if I make 48K a year then at 400 a door, I would need 10 homes sounds like? If I paid each house off, then my cashflow would double and only 5 homes would be needed possibly. And I could keep working for awhile and potentially still get more at that point if needed.

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Quote from @Benjamin J Haithcoat:

This is a fair question. Once we have multiple properties, should we take the cash flow from the second or third property and put it on the first property (or vice versa) as a principle payment. This would cut down the interest paid on the first mortgage, and cut the loan time down by a large margin. I understand that the whole point to buy and hold investing is to generate monthly cash flow, but isn't there something to be said about paying off the mortgage to increase the cash flow in the long run?

I would rather have 5 or 10 paid off properties then 10 or 20 not paid off and save all the interest and closing costs and expenses that come with each individual home. I am thinking maybe once I hit 5 homes start paying off?

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Quote from @Chris Seveney:

@Sam Booth

How much are you keeping also for capital reserves and maintenance ?

I would have 2x cash flow for what I need if you don’t have money for reserves

I am including about 100 a month for cap ex and repairs. Both houses are in really good condition and I already fixed everything up like new. Roofs have about 12 years left, hvac on one is nearly new. New waterheaters. What do you recommend for cap ex per property?

thanks so much!

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Hi all,

I am just getting going with rental properties (in the South) and have 2 right now. Does anyone have an idea of how to calculate how many properties you would need to quit your job?

The other factor is, should I payoff a property to almost double my cash flow to snowball income to generate more money for additional homes? Or is it better to use that money to buy additional rental properties since I'll likely need much more then 2 to quit my job eventually. I would like to retire in 10 years so that gives you an idea of how much time I have, and also factor in possible rent increases (although I think after the recent rent hikes, I doubt its going to go up too quickly).

Currently both my rentals generate about 1250 a month, and with the mortgage, vacancy, management, and some money for cap ex/repairs, cash flow is about 400 each. Since interest rates are up, I would guess that additional homes would be closer to 300 cash flow a month.

Thanks so much!

1 Vote

All Forum Posts by: Sam Booth

Sam Booth has started 44 posts and replied 226 times.

Post: Out of State Property Management Problems

Post: Out of State Property Management Problems

Post: Selling on Roofstock?

Post: Sell two rental properties with tenants?

Post: Oroville Ca potential buy and hold for myself

Post: Calculating number of rental properties I need to quit my job

Post: Calculating number of rental properties I need to quit my job

Post: Calculating number of rental properties I need to quit my job

Post: Calculating number of rental properties I need to quit my job

Post: Calculating number of rental properties I need to quit my job