All Forum Posts by: Zigmunt Smigaj

Thanks for the feedback everyone. Some good points have been made.  This is probably a necessary evil when I can't manage the property myself and also when the agency has lots of vacancies, which is the case.  In order to compensate time/footwork spent showing properties it makes sense to provide a commission.  I guess the $50 lease up fee just covers the paperwork shuffle and not the hours spent showing the property.   

I'm not sure but it seems unethical for a management company to ask me if I want to authorize a "agent incentive"  in order to get my rental property rented.  This company is also a real estate office and they use their agents to show rental properties in addition to selling properties.  What I don't like is this fee ($150, or $300 double incentive) almost gives the perception that if I don't authorize a agent fee then my rental will go to the bottom of the list and never get shown.  Is this normal practice out there? 

I am eligible for a VA loan (upwards of 250k) and a friend told me I could use this to purchase 3-5 SFR under one VA loan as long as one of the properties would be my primary residence. Is there any truth to this?

I work overseas quite a bit and will be living in Kuwait for the next year with the military, I too have had trouble deciding on which market to invest in. I currently don't have a home in the U.S. and plan to spend roughly a year in a RV trailer when I get back in order to research several markets/cities based on the "numbers" which can be pulled from the internet.

Once I have a couple target markets I'll put "boots on the ground" to get a proper feel for the area and meet local investors. I dont plan to live where I invest due to work.... yet I think we should at least spend some time in the target market once you've decided on one....hence my trailer becomes part of my overall strategy and justified fun expense :)

I unfortunately dont know what I'm actually looking for at the moment but I'm sure a year will help me define the "what, how, and why" a market is worth our efforts.

-Cheers!

Hello I have seen a lot of RV parks set up in and around different tourist destinations/cities. I'm very curious if this is a profitable short term strategy or a way to get some use out of the land while property appreciates and plans to build condos/homes are put together over several years. Anyone with some experience I'd love to hear about this niche.

Thank you everyone! I've learnt a lot more than expected in this post and have some good followup questions for the attorney. I'm just getting started in this business and will take everything said here seriously, it will help me create my strategy for owner financing on these larger properties.

Update... so the property manager never got back to me after several attempts on my part to follow up and get some of the operating costs. As of now I've decided to not pursue this property.

I'm about to deploy with the Army to Kuwait for the next year but plan to stay involved with BP to learn as much as I can. If anyone has any properties for sale I'd love to run the numbers for practice and learn about what kinds of areas you are all investing in.

-Cheers!

Zig

WOW thanks everyone! @Derek Carroll @Chris Winterhalter @Paul Palmer @Mark Whittlesey @Bill Gulley

Real eye opener! I'd like to get all the financials and create a offer that will actually be considered acceptable on both price and financing terms... but I don't think the owners will accept so at this point its mostly just an exercise to help me evaluate what a good offer will look like.

Gonna walk on this one. I think my liquid cash can be used to obtain several other more solid single family homes in better areas.

@Eddie the water and electric are on the tenants, I'm still waiting on the rent roll and management costs from the property manager. I agree this is way too high.....

So what monthly cashflow would you deem acceptable? I know I need to at least be above the 50% rule but once there what kind of number coming back into my pocket would be considered a good deal to you?

The owner doesnt want to carry the loan very long and is talking about an adjusted rate after 3 years... problem is that unless I can make 90k in 3 years I wont be able to refinance with the bank... and the banks here wont do more than a 15 or 20 yr loan.

I've met with several realtors in both Dothan and Enterprise, 5 total. After about 2 hrs of table talk we came up with only 2 properties to look at for potential rentals...so expect to really put your networking skills to test and do a lot of driving for dollars to find the deals.

Dothan first impressions: very beautiful Garden District, homes with lots of well developed yards and character... the city has an annual parade through through this area showcasing how beautiful the city is.."dothan azalea trail". Also some small but bad ghetto. Downtown has some closed bars and surrounded by nearby low income.., some good martini bars (oak and olive) moving into downtown bringing the higher end clients, but still boarded up buildings here and there.... Potential to grow, but I've been coming through for 8 years and it hasn't really developed at all downtown.... I wonder if there are strict liquor license laws, I know in enterprise the city hasn't granted anymore so you have to buy someone else out... may be the reason for no real growth in bar scene. The industry seems to be surrounded by two medical centers and the restaurants on the "ross clark circle". neighborhoods from 50k to 300k, so lots of variety. I see vacant old historic homes inside garden district all the time. Outside the circle moving west you'll find very nice neighborhoods. Overall I like the area because the city is small enough to explore all in one day but not too small.

Enterprise Impressions: Most of the nicer neighborhoods cater to military families, some drawdowns and there will be %20 reduction in soldier trainees next year. I own a townhome built by a builder 7 years ago who never stopped building so there is a ton of vacant inventory. My property manager got into a legal dispute with the base and closed down, they sold the business to another property manager (prestige property management). They absorbed 300 properties on top of what they are currently managing. I called to get a idea of the market and was told there are 6 pages of vacant townhomes and 2 pages of vacant single family homes. So there could be some opportunity in "rescuing" and worried owner, but Some of the older townhome areas (especially the ones without HOA) are getting run down and low income is moving in.... owner are mostly young military singles who were convinced to buy instead of rent by first property management company (I was one), now no one wants to put any money into properties... ie paint, siding, etc. With that said there are still a lot of demand for rentals so if you fix up a place then you could make it profit, HOA only $45. I'm dumping couple thousand into mine to compete with the owners who refuse to paint or carpet after 7 years. Most of the vacancies have original yucky wall paper and old dirty carpet, I'll be glad to show you mine when done.

I drive a different area each weekend just looking around and I think Dothan would be more stable from an economic standpoint. Plus its 3 times the size...with that said there are areas of Enterprise that have waiting lists because of how nice they are, Fort Rucker will always be here.... Really depends on what you want to do. I you target rentals for less than $500 you are getting into the low income/trashy areas.

Thanks @Patrick L.

I'm going to continue to evaluate this deal at least for practice, I met with the property manager yesterday and some of the units currently renting for as low as $425 and there are couple section 8 who have been there for years and problem free. Insurance quote came out to $200 from State Farm.

I agree with you that this is no deal, once I have all the numbers I can find the max offer I can make which will put the property above the %50 rule.