All Forum Posts by: Avtandil G.

@Titus Capilnean - things will vary in CA, but as an example, 20 units in Sac will be 5% management plus fixed per new tenant placement, anywhere in $400-$700 range. in Fresno you can see flat 8% without any placement fees. in Columbus, typical structure is 8%-10% management, plus 50%-100% new tenant placement fee

@Titus Capilnean - hey, welcome to Columbus forum. not sure if you're local or out of state - if you're local, things are going to be much easier for you. I started investing in Columbus exactly 1 year ago and am from sf bay area. and can attest that over that time the market has gotten more competitive. heavier concentration of action around childern's hospital, olde towne, southern orchards, but other areas also got more competitive.

if you're not local, i highly advise you to invest in building local relations. one heads up - property management in Columbus (i'm generalizing here) is a crap-shoot compared to CA where I have most investments - rates are higher, service is worse, etc. self-manage if you can, or spend enough time screening your future pm. personally, can't wait to get to 20 units in the area to build my own pm team. 

hey folks

anyone can recommend a local licensed assessor who is used working with investors? 

thx 

TL;DR

* Aggressively pushing 'maintenance' and for the most part for things not requiring any maintenance

* In-house maintenance rates are eye-watering, way higher than what you'd see in even most expensive markets

* Maintenance does not require owner's approval - RL reserves decision what to do when, cheaper plans have higher limits and all are at RL's discretion 

* Refuses to manage in many parts of town

Longer version

Signed up for their service after a few conversations over the phone - owner stressed investor-friendly approach. Main attraction was flat rate management fees vs % that everyone else charges. It became clear very quickly that the company is making all its profit on 'maintenance surcharge' and is very aggressively pushing 'maintenance' where it's needed and where it's not. I have remodeled the unit completely prior to putting it to rent, including addressing pre-movein readiness checklist I was given by RL after they walked through the unit (small list of punch items like toilet paper holder, cleaning unit, door stopper etc.). However, once I signed an agreement, they sent me an even longer punch list, approaching $2K for a while bunch of silly things, none of which would deter tenants (proven once I switched away from RL) and all of them carrying ridiculous surcharge prices way higher that one may see even in most expensive coastal markets like CA and NYC. Many items were completely unnecessary which I stressed to RL, but after a couple of conversations it became clear they did not want to budge, which made me fire them. Example of overcharges included

* $300 for cleaning windows and cabinets after entire house was professionally cleaned

* $80 to replace HVAC filter after entire HVAC system was replaced

* $700 for a small list of punch items - 2 door stops, raking backyard, removing satellite dish in backyard and trimming bushes

After terminating relationship, owner decided to send a termination charge for $450 (contract does stipulate it) - even though the company has not done squat and never placed a tenant and already charged so called 'set up' fee of $300.. Owner justified the rationale for charging termination fees because he had to 'supposedly' send his crew to do evaluation of the unit a couple of times. 

Normally I do not post negative stuff, but the above and particularly termination fee for doing nothing irked me a great deal. Highly discourage anyone to deal with these guys

CA is an appreciation market, at least most of it and throughout most of the time. It used to be that Sac, Fresno, Bakersfield could produce reasonable cash-flows, but not anymore. Sac in particular has skyrocketed due to Bay Area exodus. So trying to get a good cash on cash returns there is almost impossible unless you get lucky and snatch an occasional deal - most opportunities are in flips. you can still get 5% cap on smaller MFRs - compared to Bay Area's 2% that's obviously much better, but if you're after cashflow than midwest and parts of south are better bets

thanks - everything other than roof seems within what i'd expect. i'm doing roof ~5k in OH

I'm in contract for a couple of properties that require some rehabs and am trying to compile a range for typical costs - could someone who's done rehabs at local level help and suggest what you're seeing locally?

single story rancher, 1,300-1,800sqft

* Roof (low grade)

* Electrical panel (100-150amp) 

* Exterior paint 

* Siding (vinyl)

* Handyman type projects (hr)

Much appreciated!

* 

MFRs in secondary / tetriary markets still cashflow at 4% to 5% and as high as 6% in borderline neighborhoods 

mom and pop coffee shops / roasters don't scale well as business - that's why you don't see anything between 1 or 2 stores and starbucks / peets even in CA. you need to find an entrepreneur passionate about starting a roasting company, rather than finding an existing roasting entrepreneur and try convincing them to open a new branch

wine bar / beer bar are easier, but depend on immediate demographics in the area and trends

@Nick Clurman - it seems like pretty much anything will sell these days for top $$ in B neighborhoods in Sac county, so I'm not sure it's worth optimizing too much if the price is right