All Forum Posts by: Jason V.

I'm not talking about "cover the ceiling in aluminum foil to keep the NSA from implanting ideas in your brain" types of "tips" - I'm looking for strange advice that actually works out. 

Example: Don't buy a property directly across the street from a horse racetrack - but not for the obvious reason. 

Well, I'm a day late and a dollar short, as usual. :-) 

Thanks @Bill S.!

http://www.denverpost.com/2017/01/18/metro-denver-...

Rents dropped and vacancy increased in the second quarter - most likely due to the huge number of units coming online every month.

Thoughts? Concerns? Strategy for the market going forward?

I may have missed the area the rental is in, but in some instances (lower income area, 1 & 2 Bed apartments in a building, or any other time the owner has to pay the water bill) I've known landlords who would rip out tubs to put in showers - they claimed it made a huge difference in the water bill. That hasn't been my experience, but there it is. 

If it were me, I'd keep it as-is for now and get it rented out. If you have trouble renting it because of the shower, change it up. Otherwise, I'd wait until it made me enough money to want to go in a rip out a perfectly good bathroom. 

Thanks @Paul Moore! Those look like some great resources!

One of the things I struggle with as far as the actual analysis goes is the relative weight of one factor versus another. What's the most important factor? Population growth? Second most important, average income trend? Is population growth twice as important as the average income trend, or ten times as important? 

One of the things I'm trying to avoid is reaching false conclusions with good information - and I'm not smart enough to know what a critical factor is or isn't (past the obvious.) The concern is that I won't get any feedback from my analysis for quite a while, and never in the depth that I like, due to the long cycles of markets in real estate, and the scope of the question itself.

I understand the complexity of the problem, and I get that I'm probably asking for the moon here, but I'm also trying very hard to not 'reinvent the wheel' only to find out octagons don't work quite as well as circles. 

Thanks All!

 I think we're on the same page, I might just not have said it very well: as far as I know, there isn't a state that forces landlords to participate in the Section 8 housing program. You can either opt to participate (and subject yourself to all the rules and regulations) or not. 

BUT if you choose to participate, you cannot use the fact that someone receives a voucher as the reason to not rent to them. That said, I'm not an expert on the program, even in my own state. 

 If a property owner chooses to participate in the voucher (Section 8) program, they are not allowed to discriminate against an applicant solely because they benefit from the program. However, you retain the ability to screen applicants in the same manner as you would anyone else, and deny them for anything you would deny anyone else for (Tobacco use, criminal record, applicant pulls a knife on you during walkthrough, etc.)

When the voucher program is faithfully administered by officials who believe in the utility and integrity of the system, for the benefit of well-intentioned people who are doing their best to improve their family's lot in life - I absolutely love it. Not many better programs out there. The reality is often pretty ugly though, and property owners need to go into it with both eyes open. If you're going to own property in lower-income areas, this is probably a great option.

But if you're saying all property owners should be forced to rent to people who could never afford to live in their property without the rent being paid by their neighbors, well, I hear there's a lot of opportunity in Venezuela for that type of thinking right now. I understand the sentiment, I really do - but good intentions don't make up for an often sloppy execution that results in rampant fraud and abuse. 

@Shea Spinelli - Lots of really good information here, but I would absolutely, positively, without a shadow of a doubt, find another landlord in the same district who works with the Voucher program (Section 8) and ask them about their experience with it. 

When these programs run the way they're supposed to, with reasonable and fair inspections, and tenants being held accountable for their behavior, they are a wonderful thing. But you will hear horror stories of investors being forced to replace entire kitchens (which had just been refurbished) because the new inspector thought the tenant deserved new kitchen cabinets. Or of tenants who break every term in your lease, but are still able to keep their voucher (and keep destroying your property.) 

And if your tenant's voucher gets reduced and doesn't cover the full monthly rent anymore, don't plan on seeing the difference ever again, and get used to idea you might have to evict someone over $25. 

Keep in mind, you still control the screening and the terms, so treat them like any other applicant.

All that said, you may find that you just don't have the right personality type or mindset to do this type of investing - a lot of investors don't. Just because it's Section 8 now, doesn't mean it needs to be forever and ever, but there is probably a reason for it as well. 

Good luck!

@Yousif Abudra - There's some great information there! This is giving me a great starting point for where I can find information that's reliable (at least as reliable as information like this can be.) Thanks!

@Andrew Johnson - All very good points, and something I understand fairly well. (I invest in Western NY, which is crazy cheap compared to much of the country.) 

@Kenneth Reimer - It's not that I see them as different, it's that I don't know if the same analysis that works for 100+ unit properties works for 15-30 unit properties. I can't think of why it wouldn't, but I figured I'd be as specific as possible when posing the question. And I'm with you on the 10 year outlook, to an extent, but what I'm looking to avoid would be buying in an area that has a reasonable expectation of trending downwards for the next 10-15 years (like Western NY.) I'm not saying I'm not going to keep investing here, albeit carefully, but I'm also going to start buying someplace else, and I would like to do everything in my power to make that market a smart choice. 

Thanks All!

@Steve Santacroce I understand what you're saying about the appreciation, but if you're looking at markets as a whole, I don't think you can go neighborhood by neighborhood and still see the 'bigger picture.' 

In every market, good or bad, there are going to be some areas that are doing well - but in the 'good' markets, many more areas should be doing well, and the good areas should be doing even better. And ideally, everything is trending in a positive direction. So my first step (and what I'm hoping to learn) is to identify the good markets, and from there, identify the good neighborhoods in those markets (which I'm comfortable with.) If there's a way to take an analysis all the way down to zip codes (or smaller) efficiently, without having to first identify a market to look in, I'm all ears. 

I still do look for deals in our area - pretty much every single day. But you and I and everyone else investing here probably see the same handful of properties for sale all the time, and there's a reason they're not moving. Before I decide to pull the trigger on a direct mail or other marketing campaign, I want to make sure I'm spending that money in a way that will pay off in the long run. (And the taxes here just make me angry!) 

I've tried working with wholesalers, but there aren't many operating in my particular submarket, and I haven't had much luck with the ones who are (trying to wholesale MLS deals, lying about DOM of previous properties, etc.)

Since you're looking to expand to another market as well, would you mind sharing with me how you decided, or are deciding, what market that will be, any why?