All Forum Posts by: Michael Ablan

@Dan Hertler -  I'm in the camp of saying Yes, it's a myth.    $100-$300/month cash flow produces $1200-$3600 cashflow with everything going perfectly.    There's no margin for error on timing the turnover, let alone getting a tenant who causes excessive damage or needs to be evicted.    

I feel like over a short time horizon you can show positive cash flow, but the longer you own that house, the greater the chances of 1-2 incidents occurring that wipes out years of "profit".   

In my opinion, SFR strengths are in easy management while you wait for the home to appreciate. You just barely try to break even while you wait for your chance to exit after the house has doubled in value. Or now you just convert it into a STR and enjoy the cash flow of a 10+ unit building

@Alexus Bell - Follow your states eviction guidelines and start them immediately.   Let your resident know that you're doing it, but will cancel it when the rent is paid.  If they pay, then give them a lease violation for paying late.  If they violate 3 times, then evict for repeated lease violations 

@Laticia Myers - Deadbolts are handy.  You could also get a mobile hotspot connected to your cell plan and place it at the house (for wifi for cameras)

@Alicia Marks - Purchased a house on a golf course, nestled in the woods. I intended to flip it, but decided to try it out with STR.

I would have made $50k before taxes on the flip.

Instead, I'm making $35k net cash flow per year + reaping the benefits of paper depreciation and appreciation

The house is now worth $100k more than I would have sold it for 2 years prior.

@Melanie Stephens - Don't skip on a quality beds!   Nothing makes someone angrier than a terrible night sleep.   Also, invest in sun blocking curtains and noise proof your house between floors if you're doing a large renovation (rockwool insulation)

@John Underwood - Not at the moment, but this is a great idea.   I'm going to add this to our checklist.  Thank you!

@Mason Jeffries - You personally have to be a landlord for a couple years before they can count all of your rental income into your DTI calc.

The easiest way around this is to use a portfolio lender instead.   Or, you can buy with hard money and then refinance with a portfolio lender afterwards.

@Joe S. -  We don't accept dogs over 80lbs.   Nothing against them as a breed, but they cause too much damage.   They're also capable of killing a child (older senile dogs).   No thank you

@Keaton Reiners -  I have no experience doing this, but I'm considering being a turn-key provider.  The reason I'm holding back is because a high quality property manager needs to have high quality maintenance and construction on call .  Without it, your units will sit vacant (awaiting rehab), or your tenants maintenance requests will sit untouched (which turns into more damage or turnover).

I'd recommend going with a highly rated company, and going slow.  Buy 1 asset and see how they do.   If they do a good job after 3-6 months, then buy another and wait.

Just remember, good companies become bad companies when they don't know how to scale effectively.   When someone is actually great, then word gets out.  When word gets out, business comes in.   More business can crush systems and burn out good people.   It's incredibly difficult to scale.   

@Bishara M. -  Issue a non-renewal of lease