All Forum Posts by: Steve Milford

@Natalie Z.

Here is what I do:

1) Use Cozy.co for rent collection. I pay the $2.99 for 3-day transfer (basically equates to interest they might earn). I get notified when tenant starts process. Also, automatic tenant notification of late fee, which also adds to account. No other fees to me. System can also handle messages, repair requests, background checks etc, though I allow tenant to text me. If rent is going to be late and there has been no communication, then I reach out to have a discussion of expectations. If done by text, I archive save and print discussions. Otherwise done by email.

2) I arrange a home inspection annually through a residential home inspection firm to look for maintenance issues.

3) I use forms from local landlord association.

* It's a trade off, pay someone else because my time is more valuable, or do it myself with efficiency. Expectations are defined in the contract, one just needs to enforce it. I also use local contractors/repair persons for fixes, and have a lawyer I can call if needed. Last year, I spent time and money equivalent of $1,000 on management AND repairs, 60/40. Before this system, area PM's I contacted wanted 10% of rent and still wanted to pass on all "costs" to me. I just didn't see the value of them, plus I didn't feel like raising rent higher to "pay for" PM, providing less service and costing me more. It's a business, treat it as such.

Good luck.

My 2 cents. 

The easiest leads for the BRRR method are from the RMLS, you just need to look for dumpty, dirty, and homes that need updating (basically homes bought at or near their list price that are priced low because of the condition they are in - these homes, once cosmetically rehabbed, usually re-appreciate for more). Since you are pre-approved (meaning you need financing) you will be constricted by what you can buy because of appraisal guidelines, and depending on your loan type there are different criteria. The "gold" as some people put it is to find properties off-market. In the Portland area, there are lots of cash-only buyers, so competing with them is very very hard. I saw a recent total tear-down dump for $175k, on the market, off the market in a day. When cash-buyers send out direct mail, they are sending out 5,000 to 10,000 pieces as a time. And the leads resulting are just interested parties if "what is this piece of mail I get." Yes, some turn into real potentials, though that number is small. I send out lots of direct mail, and the results are hideous, but I still get calls, so it pays off for me. Easiest way to get mailing labels is to go to the title company, give them your specs, and they may send them to you for a small cost, or ask a Realtor to do it if the title company gives you grief. Last list I got was 9,000 owner-occupied's in my area. Cost of postcard is 5.6c + cost of stamps is 35c + labeling 1.3c = 41.9c per postcard. At a 2% return, from a list of 5k is 100 "interested parties" for a total cost of $2,095. That doesn't mean that any will convert and sell to you, so be aware. As one flipper I met explained to me, they look for deals where they make $50k or more, but they admitted that they get more deals from their network than they do from direct mail.

My recommendation is to look at an area that has an average sale price that is lower or medium of whole area, and look in that area through the RMLS. For Pdx metro, that is SE Portland, Milwaukie, and Vancouver areas. Now there are gems hidden everywhere, though again, few and far between. 

Just look for a home that is in your mind, NOT move-in ready. It's a Seller's market, most people don't want to go down in price, they think the Zestimate is golden - what a fictional number lol. I have a couple of homes listed that way (not move-in ready) in Vancouver. To the average buyer looking for move-in (and updated) ready, these are not them, but they are not functionally obsolete either making them great BRRRS. Functionally obsolete is a money pit.

Good luck, and feel free to reach out if you want.

@Lynn Gadd It sounds like to me, that most of these homes have emotional strings attached to them. My recommendation is that you take a look at all of these assets from a long-term business perspective. If you were forced to hold all, and you had a catastrophic event of at least $5-$10k, then what would you do? How long can you sustain a loss before it hurts a lot? When I first came to this site, I thought a $100 per door cash flow was good, though now I see that as too low. Most feel the crash may be coming soon, we just don't know when, so we keep plugging along. But to me, if any do not cash flow now or in foreseeable future, better to sell, unless it is your primary residence, because you have to live somewhere. If there is little cash flow or no appreciation, prior to depreciation, what is the point? To say one "is an investor"? This is no different than someone with a job that is laid off, at what point does someone decide to cut their expenses? When it makes sense too or when it really hurts?

@Mary K.

I think you should get out from behind the computer and go view and sniff some homes, then put in offers for yourself to house hack. As previously mentioned, who cares what the list price is? When you don't win offers, have your Realtor go find out why. Then do it again, and again, and again. There are no "secrets" except to talk to more and more people.

I always give a little something this time of year as a thanks for being a good tenant, to past clients, future clients, and friends and family. This year I paid my tenant's past due water bill. If my tenants leave or I have to evict in future, I am liable for it anyways. It's Christmas, so I figured, "Why not?"

The grinches here make me chuckle. Whatever happened to showing some kindness?

@Arnel Arrozal

Welcome! My 2 cents:

1) Keep your expectations in check; few are knocking it out of the park. Like any investing, calculated and steady wins the race.

2) Join Rarebird and NWREI, go to their meetings.

3) Hook up with a Realtor you like and trust or become one to get access faster.

4) There are 2 sides of the coin, but no right or wrong perspective. Pay with time and energy and manage yourself, or pay a management fee to do what you would do. (I.e. I self-manage. Dishwasher in rental has been on fritz, I was informed yesterday that it quit. This weekend, I was going to go to beach and play, though now I am installing a dishwasher. Easy fix, but still takes time.)

@Colleen Cupp When I first started, I put everything on the credit card. The key is to keep finding ways to engage your market until the phone starts ringing. I.e. I test as I go. Direct mail is hard, but it can be useful as a way to gather contact information to start conversations, and the more conversations you have the greater amount of deals you will find. Tenacity is the answer.

Welcome! We all come from many backgrounds and avenues. Best advice I have is to find a path and jump in. That may be buy a first property as your own and house hack it, or buy an investment piece and then make it better. Ideally meet with people in person, attend some Rainbird meetings or other REI groups. Analysis paralysis is a big problem for many in my opinion. I know it was for me. Feel free to reach out. Steve

@James M. I look at it like this, if my client can't be straight up and communicate (ironically you are telling a bunch of strangers here, but can't talk to your Realtor?) and is going to play the "shop the Realtors" game for "the best deal" then they can go right ahead without me. I don't want that kind of business. I am old school and work with people that want to work with me. It has happened to me and when it does, I just tell the client, "Good luck, but never again." Every time, after the first "deal" clients build false hope thinking that their "new Realtor" will treat them "right," and get suckered into the next. Just like in a marriage, once a cheater always a cheater. In April, an investor client told me he was going with a great deal from another Realtor, while working with me. I let him go and watched him buy a moldy house, and spend $40k more on rehab than he was expecting. I couldn't help but laugh.

@Jesse Smith Much has already been mentioned. The issues you speak of comes down to trust of your skills. Part-timers just get a bad rap imo. Stop worrying about what your friends do or what decisions they make and start working on filling your time adding more contacts and having more conversations with people you meet. I am a part-timer and it took me a while to find my happy medium. Talk to potentials at least 4 times a year 75% of the time NOT about real estate. Let people know what you do, but don't focus on it, become friends, and work to help them in areas they need. As you get to know more people you won't be able to keep up with everyone (4 times a year will seem like a lot). If friends want your knowledge and you want to get paid, ask them to be a client. Just like asking for referrals. When your "friends" see you successful with strangers they will seek you out. I just returned from a dinner party, where a friend (and past client, whom was a client before he was a friend) was there, raving about my skills. Best marketing in the world.