All Forum Posts by: Steven Gesis

 I did not go turn key. I decided to buy houses and hire our the rehab. If you have the time and people in place this is the way to go. You are getting into the property with much more equity than you would buying turn key - the premium they charge is not worth it in my opinion. 

Thank you to you both! @Wayne Brooks @Steven Gesis 

You are both 100% right and confirmed my thoughts. The only thing that we have even signed for our the kitchen cabinets and they cost $6,200 and we budgeted $12,000. Hopefully they still deliver them!

He has threatened to file a lien. Great advice to let him know there are penalties for filing false liens. He has literally only showed up for inspection draws and to pick up the check. I did a walk through with the contractors to let them know what work was being requested but again nothing was signed and the invoice was received after the fact. I even told him that if we discussed the cost and got quotes we would want to adjust to stay within the amount allotted. I handled the plumber work and stayed under budget easy. 

We are hoping to terminate him and finish work with another contractor before the lien goes through. Its amazing. This program also outlines that if it costs more then outlined after we have to fire him that he would have to pay for those extras as long as they are within scope. 

Very frustrating to have to go through. If he wanted to get paid and cover his profit overhead etc he needed to be at the project managing every aspect. He cant even justify asking for 18K in profit for the amount of work he has put in.

I feel bad for the sub though. Guy is stand up and has been nothing short of amazing. He has gotten $6,500 of the 40K we have released. That part bugs me the most.

We are about to purchase a 13-property portfolio of singles and duplexes under one packaged commercial loan with an interest rate of 5% over 15 years.  The rate becomes variable at year 5.  The one loan covers all of the properties, and I am told that I am able to sell off each property as I wish individually. 

The 13 properties are in C neighborhoods in Western Pennsylvania.  The total annual income is $94,000 and total net income $48,000.  The insurance is approximately $4,600 for the entire package; annual taxes are $7,600.  The insurance is ACV, but an enhanced version that covers more perils.

The units are all leased except for one.  Given the number of properties, I chose not to elect home inspections.  For this price level, it seemed reasonable to me as each would cost about $400.  I have an excellent property manager lined up to take care of all issues. 

The ultimate goal is to achieve financial freedom through cash flow income.  I look forward to all of your thoughts and feedback!

We usually have at least one months lost rent plus some of my units have lead paint inspections which can cost over $200.

Turnover Cost - #1 Vacancy 

We do our best to closely monitor the renewal dates (auto reminders weekly) to minimize the loss of income from vacancy during a turnover. We try to be sure everyone on the team is focused on their role in the renewal process to reduce unnecessary delay. 

Steven Gesis Number one on my list is the rent loss during the vacancy period. It's a double loss. No rent coming in and mortgage payment going out. If a property rents for $900 a month and the payment is $450 a month doesn't that count as a $1350 dollar a month loss?? add utility expenses and insurance costs to that and it don't take much time to out weigh the rehab costs. The rest can vary depending on how the tennant left the property. Just my opinion RR

Painting is up there for sure - fortunately in AZ we can usually charge tenants for part of it if there is "damage.  

Flooring - doesn't have to be.  Invest in a good product and install it correctly, and it'll take tenant abuse no problem.  I prefer polished concrete or epoxy floors, yes, even in C+ apartments.

Trash-out.  Yep, it sucks.  However, my last 2 evictions I managed to have them run semi-smoothly, and they left the place fairly clean.  Thats more of a people problem then a construction problem.

Yard - can't help you there, I live in the desert, and do Xeriscaping and steel everywhere

Time - engineer tenant-proof buildings and turnover goes down dramatically.  

I agree. Painting is the biggest routine expense. Flooring is less frequent but similarly expensive when it needs replacing.

My name is Tina Wright. I am a new wholesale flipper in the St Louis MO. Looking for mentor to help me build a better community. Have experience in mortgages and Real estate. Looking for local fix and flip investors.