All Forum Posts by: Tchaka Owen

The exact quote: "What's realistic is 20-25% of the rents for property management (if you decide to go with one), repairs and vacancy" 

Going with 5% vacancy, 5% repairs, 7% capex and 8% management gets you to 25% in a hurry. And that's being a tad aggressive.

I'm researching RentToRetirement right now - specifically in Ohio and on the positive side, the homes look to be in good shape (going by the pictures) and truly being turnkey. Three downsides thus far (all numbers related):

1. Their expenses are too low (as a few have mentioned above). That will severely impact the advertised ROI.

2. All models use $2k closing costs on financed deals; that's not realistic. Count on at least $5k, otherwise you're fooling yourself.

3. My software is having a difficult time matching current values, I'm coming in lower. That is a big concern.

 Numbers 1 and 2 are changes I can do and make determinations based on my figures. Number 3 is more problematic. 

@Alex Verdugo, i'm with @Michael Noto on this one. How do you know you reached the correct person? You stated it's off-market, so how did you find out about it? There's an agent who reduced the price, yet you sent your offer to another agent. Unless they're with the same broker, one of them isn't the listing agent. And if it's not listed, it's possible that neither is the listing agent. Find either the owner or the correct representative. Contrary to what others have written, there's nothing wrong with a low-ball offer - provided you can justify your offer with legitimate rehab and/or ARV numbers.

If you're willing to terminate a lease over a broken fridge handle, what does that say about you as a landlord? 

It's 2 years old, thus not obsolete. If the lease doesn't require you to pay for it, take it out of their deposit. It's simple. As @James Wise mentioned above, you're overthinking it.

True. However rates are near historic lows so you have a much greater chance of seeing an increase as opposed to a decrease, thus making a 5/5 even more appealing (as you mentioned).

@Bob Duke - HMLs do not lend to owner occupied homes. If you move in to finish the work with the intent to sell it as soon as it's finished, not sure they'll call the loan on you. But it has to be legit, you can't fake it to live there. 

@Greg R.,

1. As a point of correction, a 'conventional' HELOC does not adjust annually. It changes with Prime so it can change 8 times per year (whenever the Fed meets).

2. Suggestion is that your reason for getting a HELOC is security or perhaps a little bit of home improvement, avoid saying that you're going to use it for REI. (i'm a PenFed member and was given that advice)

Good luck!

Actually, that depends. How old is the fridge? Depending on age, a case can be made that it is in fact wear and tear. My client (purchased her first home in November) had her entire rent deposit held for a variety of items. She filed suit and won along with all costs because the landlord tried to stick her with repairs on items that had passed their usefulness. Additionally, FL FAR/BAR leases designate what items are to be repaired and if there's a minimum threshold for tenants to pay. So the correct answer to your question is: depends....check age of item and wording in lease. 

@Chauncy Gray - I'm going to start with #4 because to me, that is the most important question. You must always have an exit strategy when you go into a deal. Always. If you don't have one, you don't do the deal. 

1. You don't know, unless you have a crystal ball.

2. You hire a structural engineer to inspect the property.

3. No, hard money lenders take first position. Options available to you include borrowing from family, partnering with a friend, partnering with an investor as well as seller-financing. 

The numbers on this place look great, however you need an exit strategy before you do anything else. Good luck!

That's more hours than you need for a Bachelors! See if a school will tie them in and grant you the diploma. You've certainly earned it. 

If you hire mercenaries to find him in Portugal, you don't kidnap him.....