All Forum Posts by: William Walker

Welcome @Joe Prillaman!

I'm also in Wilmington NC, great area.  Feel free to ask me about property management or areas of town you're interested in, I feel like I know this market pretty well.

Drop the $65 / month eviction cost. If you are spending $800 a year on evictions you have a screening problem. You shouldn't pay screening costs from property management, you will more likely pay a one time placement fee (mine is $150 for a 12 month lease and $75 to renew). If you have a property manager you shouldn't be paying anything for evection, they will handle that and you've already calculated in vacancy so that is seperate. Your capex seems very high, while it's good to be conservative 10% is what most people consider normal/conservative. Part of that depends on the state of the property you purchase. For CAPEX think roof replacement, HVAC replacement, big things that you'll save for overtime. For repairs think fence gate sagging, painting, etc.

She might have just been concerned that the property wouldn't be what was advertised and now she's stuck on a lease for a place that isn't what she thought she was getting.  Lol, we all see shady tenant stories on here, but there are a lot of shady landlords out there too!  In the end I think you made the right move by trusting your gut and returning the money.

Great post @Patrick Madigan!

I would like to see everything in the "O" category, plus maybe onslow county.  But we can't all get what we want!  I don't think Fayetteville fits into the southeast region.

One thing to consider is how fast can you get the job done vs hiring out, and is your rental available dependent on when the painting is done?

I had to repaint the majority of my house before renting it out, but I had plenty of free time and I was waiting on some appliances anyway so no hurry.  I mildly enjoy it, listen to some music, save a good amount of money, doesn't bother me at all but if I had multiple rentals and was busy I would probably suck it up and hire it out.

Your rent shouldn't be based on your mortgage payment.  Those are numbers that should have been calculated before purchasing the property as a rental.  Compare your rental to others in the area and that will determine the appropriate rental rate. 

I don't say this to sound mean, but you need to decide if you're running this as a business to make profit or as a cheap housing alternative for those in financial hardship.  You rented to a "known" person (I don't even know what that means), for a monthly loss of $150 (you're losing 2k a year because this person is "known"????).  

If you want to keep renting to this person because they are "known" and don't have enough money, keep the rent the same and feel good about yourself.  If you want to improve your profit, increase the rent based on the market and let the tenant figure out their financial ability to stay or go leech off someone else.

I have another visual aid.  Go to the search bar and type "tenant from hell".  Lol, real estate isn't quite as easy/simple as some make it out to be.  But in the meantime, yes I will take your offer noting that your example doesn't include tenants! :)

Gonna hijack this thread just a bit, but it sounds like some of you have experience and I would like some education.  If you have insurance for the pool and something happens, it goes through insurance like normal correct?  So does it affect you negatively because your insurance will be higher in the future?  The tenants can't go after you personally can they, isn't that the point of insurance?  Is there anything you can put in the lease that decreases your exposure? 

Wow, very interesting thread with lots of different opinions.  I'll try to focus my response on your initial post.

My first piece of advice is decide if you want to invest in real estate or not.  If you do, slow down your contribution to your 401k and save up for a down payment.  There is little advantage to frontloading all of your 401k contributions and then not having enough for a down payment and reserves.  Either stay in the 401k game or get into real estate.  It will be a much slower process if you try to do both.  (You can guess what people on this forum are going to tell you to choose)

You're doing awesome by having very little debt and a good income, the vast majority of people starting out on this forum would love to be in your shoes. Use that to your advantage by saving some decent cash and being able to buy a place that you want while still having reserves for CAPEX.

I also want to point out that I don't believe you will be able to put 5% down and avoid PMI, it will likely be 20%. One thing I didn't read is what price range you are looking at. There is a big difference between 3.5% down and 20% down and your price range will help determine which is best. Judging by your situation of buying now and possible moving and buying again, plus wanting to contribute heavily to your 401k, it seems that 3.5% down is your best bet. You can refinance later if you're in the financial position to do so.

Some people have success with it, but more than likely you will have lots of headaches with renting rooms.  High turnover, lower quality tenants, they have access to you 24/7, lots of negatives. 

If I had to say do x, it would be buy a house to rent out, hire a PM, keep your lease for 1 year until you graduate and see if you move or not.  Then buy the house you want to live in where you're going to stay.  It's a more traditional route but you have a high paying job and full time school and it sounds like you don't you're time to be spent dealing with tenants.  Best of luck

Seems like you would have a lot tied up in this property and not getting much in return.

Not to sidetrack your thread, but what repairs are you doing for $6,700 that increase the value of the property by 60k? You're either getting this property at a great discount, have overestimated the ARV, or know some REALLY cool upgrades! Maybe a little of all three.