All Forum Posts by: Amy Fulbright

Do you go to your local REI group meetups? The ones I've been to have an "I have a deal" section where people are specifically pitching houses they want to invest in, and they're hoping that someone in the room is interested in a closer look at the numbers. To that end, if you haven't already put together a packet that illustrates how successful your 5-property portfolio is, I would definitely do that. BP has the calculators, so I would just do a separate packet per property, so that folks could see how it might look in bulk.

The local REI group meetups are also good for getting to know private lenders, who have some spare cash sitting around. If nothing else, you could start attending the meetups specifically to ask the private lenders what kinds of deals they're in the market for. If your geography hosts lenders interested in flips, and you're interested in being a landlord, that's good information to know.

If you're having difficulty finding a single large-sum investor, then you might talk with someone about having multiple micro-investors. That said, I HAVE heard that this micro-investor idea might still require a minimum $10k investment per investor (because of the administration/overhead of managing that many investors on a single project). So be sure to talk to your lawyer.

As someone who has never been a passive investor before (despite really wanting to be), my major concern is basically what happens if you screw up. What are my options in that scenario. 

If your plan is to basically live with your gf when you buy your first investment place, my recommendation would be to move in early, so you can start putting your monthly rent towards savings. That should allow you to save up enough for a down payment reasonably quickly.

It sounds like you're hoping to rent out the investment property (versus flipping it). Either way, I agree that talking with a lender about what dollar amount/s you'd qualify for, is a really helpful first step. 

Another idea is to open a brokerage / investing account with whichever company also holds your 401k money, and put your "savings" into a total market index fund or into the S&P 500 or some other index fund that spans multiple industries. That way, you're making more than a typical savings rate, and you have to be intentional about removing money from "savings". I personally, haven't gotten very complicated with it. I transfer a certain amount of money once a month to pay for bills, and the rest stays in Savings. The interest rate on my credit cards is higher than I'm making in the stock market, so I usually try to pay down my credit card balance. But otherwise, every penny goes to the brokerage account. It's also more motivating for me personally to have a specific dollar amount in mind. ("I can't wait until I hit $10,000 in savings" or "Each month, I spend about $xxxx, so 6 months of savings would be $xx,xxx. I can't wait until I have that.")

If you have the discipline to not spend every penny in your bank account, then I agree that saving/investing your money makes sense. If you (or a significant other) spend every dime that makes it to your bank account, then the smart play is to continue contributing to your 401k.

Your ambitions are good. But I'd plan to start saving ASAP, because cash is king, and you can only pull so much from your 401k anyways.

I personally just called the same insurance company that does my homeowners policy, and said that I needed a landlord policy. They provided me with dwelling coverage, and then asked if I wanted to also cover any bigger ticket items that I had in the property (clothes washer and dryer in my case). The landlord policy was a little more expensive than my homeowners policy.

As sometime who recently vacated a place, turned it into a rental, Al while preparing to move out of state, I empathize.

I found a property management company with a pricing scheme that I like, and had them finish fixing the place up, and then placing a tenant in the home-turned-rental.

The impression that I have is that getting the first rental is the hardest. So if you plan to remain there in real estate investing arena, I’d recommend renting your current space out, probably with a property management company to start with. If you plan to sell, either to investors or to home buyers, then I would not find a tenant. Any time that I have looked at investment properties with tenants in place, the rent has been lower than I would need in order for the numbers to work. So I don’t even bother reaching out to the seller because I don’t want to be held to someone else’s lease. Truthfully, I don’t know if I’d have to assume ownership of the lease or not, I’m just telling you that seeing someone’s else’s tenant in a place I’m hoping to rent out, has generally been a deterrent.

I can tell you that the property management companies that I’ve seen generally charge ~10% of monthly rent as their Monthly regular fee, plus about 1 month’s rent to find / place a tenant. Some charge a premium on maintenance but others don’t charge a mark up, so just be aware. I have loved not having the stress of managing my rental long distance, so for me, the 10% of monthly rent has been worth it.

I’ve heard of a couple of different approaches. 

1. Rentometer.com is referenced by some of the BP webinars for finding comps
2. RentCafe.com allows you to enter a city and then in the upper tabs area click on Rent Trends and see how that city compares to others overall.
   
3. Keep in mind that the months where you’ll greet highest comps are June, July, and August because that’s when everybody prefers to move. So if your lease starts in another month, your monthly rental rates won’t be as high.
   
4. Finally, the property mgmt company that I use (in NC) will set an initial rental rate for one week, and see how many quality applications they get in. If they don’t get any, they lower the price by 1% each week until they find a tenant. This approach obviously works best when you’re already close to market rates though. You obviously don’t want to spend several weeks with your property vacant while you slowly reduce the rent.
   

Are you trying to purchase a new house afterwards or just pocket the money?

What apps do you use to help streamline your landlord experience?

I'm curious about everything from maintenance apps, to bookkeeping/receipt/expense tracking, to lease management, etc.

For example, I currently use Stessa for receipt and expense tracking, and HomeZada for Maintenance...

If you're using something else for tracking expenses, then the Veryfi app looks most promising because it tries to read the text in the receipt and type it for you. Veryfi also connects to QuickBooks if you use Quickbooks. If you're wanting to track Expenses and Receipts together, then my instinct is to use Stessa, because it groups the expenses into Tax-related categories, and can still be set up to run by property/address. If you wanted to run the "Fix" expenses separate from the "Hold" expenses, you could enter each property twice (once with an F and once with an H), for example.

I have my eye on a deal. It's a 3 bedroom, 2.5 bath, 2 car garage SFR that is move-in ready. I hope to purchase and immediately rent out all 3 bedrooms. That said, my W-2 job is changing at the end of this month.

Who should I be approaching to request funding? I assume that even a small bank / credit union will balk at the employment change. Does that mean hard money lenders and private lenders only? Are there other kinds of loans/programs that I should consider?

I heard recently from a non-student housing person that having an odd number of occupants (i.e. 3), and all not-related occupants, is better because then the blame game doesn't end in a stalemate. Just a thought. 

My idea for flooring was to stain concrete, but I've never done student housing.