All Forum Posts by: Varun Parkash

Hi Don Blake, that’s why when you are an out of state investor who are always easy targets by PM for getting sucked out the most of their dollars - try and buy brand new properties to defer the maintenance

Congrats Rick - getting 7-8% Coc roi numbers (after including PiTI and 20% down) on brand new properties is still next to impossible in today’s market. Considering yours is an older one, it all checked out in your favor.

Please help answer my dumb question : Example: John makes 100k salary, pays 6k Nj state income tax, 12k property tax, 14k mortgage interest rate on a 550k loan for his primary residence. Now as per new rules, john can only declare 10k, but also as per new rules his mortgage is below 750k & he can declare 14k interest rate paid as well in taxes ? I thought that a combination of “state income tax + property tax + mortgage interest rate” can’t be declared on taxes beyond 10k as per my research. Correct me where I’m wrong? I want to know how and where is the 14k mortgage rate interest paid on a 550k mortgage declared on taxes?

C area - c construction - aren’t these 2 red flags enough ? Northern CA investors might be lazy enough to fall for the trap by not utilizing their local friends or contacts who can provide real insights into the area rather than relying on a realtor In RE - golden rule is to always watch your own back first and never rely on “just what is being told” as greedy realtor motivations with a naive - inexperienced & lazy buyer is a deadly recipe - poised to be doomed.

How old is this property?

Originally posted by @Derrick E.:

Originally posted by @Michael Jones:

Great post and lots of great replies with good reading.

I am seeing that a lot of you are saying the repairs are higher and turnover is higher on low income rentals. 

I will assume that the turnover is due to tenants mismanaging their finances and having to make a change or are there other factors that drive the turnover?

Also, regarding the higher repairs, is this generally in the area of painting and carpet or do low income renters create repair issues in other areas of your rentals? It would be easy to assume that a roof doesn't care what part of town it is in, or a HVAC unit inst going to break down quicker because the bad part of town gets hotter or colder. So other than the cosmetics and the rental not being treated well by the tenants, what repair issues will there be that do not exist in a high income area?

I do not think there is more or less turnover on the low income rentals. I think its all about the individual market, condition of the home, etc etc.

Not being able to manage finances makes it hard to move as moving is expensive. Having to save up damage deposit and first months rent is hard to do. 

In terms of repairs. I haven't found anything crazy and in a lot of instances I just clean the house out and re-rent it. The people from lower income class has a different view of what clean/nice is compared to people in the higher rent levels if that makes sense. My favorite places to buy are the ones that have been rentals but poorly managed and its mainly due to the owner being cheap. 

You will be amazed at what new flooring, paint, and light fixtures will do to a place in this price range. Doing those small things that anyone can do themselves will allow you to get more applicants, which allows you to be more picky on which tenants to choose. That's jmo. 

 One thing that i am not sure if anyone mentioned is "LUCK factor". You may end up getting sane minded - mature and responsible tenants who stay long term and you just end up having normal repairs that any property would have. 

Originally posted by @Ian Walsh:

There is a trade off in the management.  It really comes down to your goals and what you can tolerate.  High cash flow and battle hardened vs lower cash flow and passive.  There is every combo in between.

 Completely agree, that's why being passive = less coc roi passive money in today's market with lesser work (if you bought brand new). Gone are the easily available 2011-2013 deals where you could do both. Now its practically a fight to grab the last penny. 

On the other hand, if you have the time, energy, mental bandwidth to deal with bad neighborhoods/bad tenants (high possibility), fixing stuff up - then you can make more money. People on this forum have bought 25K houses at auction and rented them out for 700-$800 a month after minor fixes - again depends on how much hustle you want to do.

Originally posted by @Jordan Moorhead:

So in October I bought a low income rental in and ok neighborhood. My other rental is in an attractive neighborhood in Minneapolis and has been a breeze.

This low income rental has been quite a bit more work. It’s going well now but I probably wouldn’t buy something in this type of area again if I have to manage it.

What’s your experience with low income rentals and why or why do you not like them?

 Well, forget lower income, here in Irvine CA, we have negative cash flowing rentals - and i own it - banking on the appreciation aspect long term. But yeah, its a brand new property - so deferred maintenance. 

Hi Guys, a random question, since we have so many success stories and phenomenal people here on BP, I was thinking if anyone here owned properties in all 50 states and how did they go about buying them/managing them etc.? Landlord friendly vs tenant friendly and the overall demographics - price-appreciation - local market fluctuations - all interesting trends to observe and learn.

PS: Agree on the fact that multi-family makes you the most money eventually & old-time investors or general thumb rule has been to stay local - buy/manage local etc. But at the same time, with property management teams, connections, people do own places thousands of miles away - with its ups and downs.

Originally posted by @Derek Petersen:

I own in 5 markets with 5 different property managers. My advice would be to stay local my friends.

Oh i hear you, i currently own in 2 different coasts.