All Forum Posts by: Serge S.

For me the biggest thing is who pays utilities. There are multifamily deals that I literally would not take for free and those are the ones where owner pays for water/trash/sewer AND anything else. If you have to pay for all utilities there is not a very good likelihood that you will make money. You will always be chasing your tail trying to keep costs down and it will be a losing battle.

Age of building and tenant class is another one for me although that is more personal preferance.

I too am considering selling off some holdings. Problem like everyone mentions is where to move the money. I have loans at 5-7% for 30 year fixed so te thought is to sell enough property to pay down all the debt and then sit on the minimal amount of properties with no debt with cash flow that will provide for all living expenses. This was the goal all along so maybe now is the time.

I'm struggling finding property that can return 10% at this point and unwilling to buy old war zone junk. I've learned there is no money to be made in that asset class, simply big headaches. Although purchase price is critical to achieving success in RE, I'm a firm believer in owning the correct asset class. If you have high turnover and constant repairs it makes no difference how cheap your purchase price will be. This is a trap we all strugle with.

I do invest in PHX. There are different perspectives on the market here. In the sub $100 segment we are close to 80%. Homes that sold at peak for $200k could have been had for $60-100k 2009-2011. Right now they are comping at $150k-180k. If you look at median across PHX we are at $185k median and it was $225k for a while. Regardless of where we are the appreciation has been very real.

I agree. So the question each market should access is where are you in that cycle. Some have not reached back to 80% of peak and others like SF are back to near peak. I'd say PHX is at about 70-80% of peak prices. The other important dynamic here is population growth and new building. PHX simply does not have the supply to meet the monthly growth in population so many think we will surpass peak prices by next year. Once new housing meets demand then a new floor will be met and slow growth from there. As long as we don't overbuild again and if money continues to be easy ....

@Carole G.

Good point. Most investors seem to feel there is still a lot of room for appreciation. Don't hear much opinion that markets will correct. Makes me wonder ...

Wondering how many of you out there are selling into the recent real estate run up in prices. Not all markets are the same but some including LV, PHX, SF, LA have seen 100% plus gains in certain asset types. I know many people that started investing in 2009 and built large portfolios of homes purchased at bargain basement prices. Now that those homes have significantly appreciated many are beginning to sell out although everyone I know is holding and continuing to buy.

Please share your strategy to "cash out" and where your planning on parking that money. Or if you plan to hold the course, why do you think that is prudent?

I have a 32 unit complex all low income. I do not check credit. When I did it was a lock credit was awful and I lost potential tenants to the process. I am most interested in proof of steady income and rental history. Every tenant in this class will be a roll of the dice and you simply have to put a higher vacancy and turnover into your business model.

Thanks for all the replies. J. Scott brings up a great point. My initial thought in taking on this project was to try and build a team in that region for future expansion. Right now the market is in fact tight and there are no other prospects (but we know that can change in a moments notice). But now that I actually made that drive, wasted a full day for something that should have taken less than an hour, I don't think I want to do it again. I've offered my crew a nice bonus to take on the project and if they take the offer I will do a full turn. If I can't use my crew I'll do a quick clean and flip it to the next guy. Everyone's advice has been very helpful.

Yes the tile is the one thing that actually was done right. The rental proposition is interesting but I'm hesitant since I have had so many prior problems w homes w bad add ons. From HVAC to plumbing the repairs never end and these tend to be my worst homes.

Another quick tip on showings ... make your prospects call or text 30 minutes to an hour before the showing. When you schedule a day in advance or more its virtually guaranteed that they flake.

K. Marie Poe is right on regarding the pics. I have a new wide angle lens camera that makes the house really pop in the pictures. Rooms look huge and the walls shine. I think tenants have high expectations coming in. Last feedback I got yesterday was that "it didn't look like the landlord put much money into the property." My response was thanks for the feedback but the owner (I always play the role of PM) has added granite countertops, new cabinets, new flooring, new baseboards, new HVAC, new roof, new crown molding and resurfaced the pool all within the last few years and that it was rented for $100 more BEFORE the upgrades. Tenants response was "well the windows look old."

For a visual, here is a pic of the home: