All Forum Posts by: Scott Kaczmarek

@Heriberto Melgoza - Premier Property Management Group handles my properties. They’ve done an excellent job for me over the years.

@Bonnie Rhodes - started investing in traditional retirement accounts at 22; I’m 46 now. This is my 3rd year in real estate and I’m closing on my 5th property in 2 weeks.

@Greg Yunov - I don’t have any horror stories but that’s because I listened to people with experience when I was starting out. The keys for me were: 1. Go and meet the provider. If you’re willing to put $30k-$40k into a down payment and closing costs, spend $1k on a flight/car/hotel and meet them face to face. Meet the team, ask a ton of questions and tour the area and see the before/during/after on the product they’re selling you. 2. Do your own due diligence and run your own numbers. Don’t take anything for face value. 3. Ask a ton of questions on all areas: property acquisition, renovation, property management and investor communication. 4. Buy from someone who does it all in-house. You have one throat to choke so to speak and there’s no finger pointing because it’s one company. 5. Buy the nicer stuff. My average house is $120k renting for $1100/mo. There are operators in my markets offering $75-$90k but I’ve found success, overall, going toward to higher end. I don’t cash flow amazing money, but my cash flow is predicable and real. 6. Have reserves always. Those who don’t make it are normally caught short of liquid funds. My 2 cents. Good luck!

@Joseph - I own a couple of house bought from and managed by Spartan. The $525 was the move out repairs after the tenant vacated the house. You should ask for the details on what this covered. The utilities and grass are just carrying cost that owners need to cover when not rented whether Spartan, another PM or you manage the property. The cleaning fee covers cleaning the house each month while prospective tenants tramp through the house on showings. I’d rather have them clean it than have mud, grass clippings or whatever accumulate. I won’t even talk about what can be left in the toilets. A clean house shows better. So why now and not on the initial rent up when you bought? They did that for me too and it turns out they covered those costs as a value add to a new investor. None of these charges are outside the norm and not invented by them. You always need to question your PM and stay on top of things, but you may just need to reset your expectations a bit regarding the costs above. My two cents.

@Russell Brazil - all of my occupied units are 100% paid as of 4/5. I have one unit going through a turnover (planned/known vacancy as of 3/31) which will be interesting to see how quickly the PM can get it rented. I think May could be the tough month with furloughs and pay cuts in effect for > than 30 days at that point. The counter to that however is the stimulus and tenants using that to potentially cover rent.

@Nathan G. - good discussion! Regarding family, I’m married with 2 preteen kids who are now virtual learning like everyone else. For us, we’ve been maintaining our normal schedules with getting up like a normal school/work day to keep a routine. We’re not leaving the house, except for groceries, but keeping as much of a normal schedule as possible keeps the kids balanced. My income is from my W2 job, which just enacted temporary 30% pay reductions. I’m confident I’ll remained employed as a solid/proven revenue generator for the company. Our monthly expenses are closer to 50% of my income so we’re really just saving less. That was a conscious decision we made several years ago when we started having kids...thank God for that wisdom being given to us when we were younger HA! As for my rentals a big decision we made thanks to reading this site was to maintain healthy reserves! That alone was worth its weight in gold and lets me sleep at night. We also stay in touch with our PM company and let them know we would work with tenants who lost income. Hopefully the passed stimulus will help tenants with rents and not new big screens, HA! Thanks for the question as I’ve enjoyed reading the replies.

@Chad Urbshott - retail has been under pressure for awhile and this creates even more pressure. I expect office space will suffer even after this is done. My employer has allowed some groups to work from home, but that number has exploded with this virus. They’ve been investing more in IT to support the change. If this lasts longer than a few weeks, I can see many companies making this the new norm. Perhaps some home office space will become a big feature in the residential rentals.

This is an interesting thread! For REI reserves I keep a minimum of 6 months per door assuming we receive no rent. We have a separate personal reserve of 8 months, if my W2 job disappeared, that could be tapped if needed. One of the keys to long term success I took away from the regular experienced investors on this site was to maintain reserves. Those that made it through the ‘08 turmoil had cash reserves.

@Parker C. Snow - I'm going to be the contrarian of this thread and say you should first get experience with acquiring a property. Systems are good, but don't spend time developing systems without the experience of owning rental properties. You don't want to develop systems that don't fit I to the reality of your properties. Buy a property or two then create systems that maximize your ROI and aid future growth and operations.

‘The only source of knowledge is experience’

-Albert Einstein

@Chaz Parks - I agree with the others posting. It depends on the type of debt. If it’s high interest credit card debt, you should pay that off. If it’s low interest student loan or other debts, I’d invest as long as your DITI can support the new investment.