All Forum Posts by: Alex Huang

I'm picking out the furnishings of my first rental and I've received some mixed feedback from other investors on a few items. I'd love to hear more inputs from others here:

Property will rent for ~$1100-$1200/mo in an A-area. Demographic is working middle-class families.

Two bathrooms. One in the hallway and one in the Master. 

The hallway bath isn't terribly big -- maybe 45-55 Sq Ft.

 I've heard mixed feedback on whether to use a pedestal sink (to save space) or to use a vanity that has additional storage below the basin. I see merits for both and would be curious to hear what other experienced landlords think would do better from a renter's appeal?

Would you tile the shower or use an insert/kit? The cost difference is negligible for me and I see benefits to both. On one hand, the tiling is more visually appealing, but it might be more vulnerable to dirt grime. 

Thanks for the reply. A lot of good takeaways there and the exit strategy is definitely something that I will keep in mind if I move forward with things.

I was approached by a contractor who I've had a personal relationship before business. The GC is near my age and we've known each other for many years. He owns a business that handles rehabs and construction for big commercial chain stores and brings a great deal of expertise in that area. He is also 100% trustworthy.

We recently broached the subject of a potential partnership with RE. It is something he had been wanting to get into, but he lacked the knowledge or time of finding properties, running numbers, etc (something I love to do). The idea spurred of potentially creating a partnership where I handle the RE side of things and he handles all of the rehab side of things. The arrangement is appealing because the rehab would be 100% hands-off for me and his existing business already has the capabilities of making countertops, cabinets, etc. A good bit of vertical integration (yay business school terms!) that can assist in RE projects.

Beyond the obvious things like having everything in writing, explicitly stating what each person's roles are, etc -- I would be curious to hear from others.

What would your ideal GC partner bring to the table in a partnership arrangement?

IMO buy the big stuff that matter more stylistically. For instance, the toilets, vanities, light fixtures, flooring, tile, backsplash, etc. I buy them and they leave them at the store for pick-up by my contractor as he needs them. You can build an order and get a bid on them through Lowes or Home Depot and save a nice chunk of change. Additionally, I buy gift cards at my local grocer with a credit card that gives 6% back on grocery purchases. Add that with the fuel points and it becomes a pretty penny.

Other things like hardware, sheets of drywall, etc, I just let my contractor take care of.

Curious to hear thoughts on the advantages of cash purchases. I always thought they would be the preferred method given the speed of closing and appeal to sellers (less hoops to jump through, less likely for deal to fall through, etc). 

My experience with cash offers has always resulted in, what I feel, lower offers to be accepted.

I think it is largely dependent on the contractor. There are definitely some sleazy ones out there and I'll paint a worse-case scenario.

Say a contractor wants your business so he intentionally overlooks something that you aren't aware of. He knows it will be a problem that needs addressed, but he hides it and then gives you a low-ball offer on your project so that you'll hire his crew. Once hired, he raises these problems to you mid-project and gouges you on the repairs. 

I'm not saying it is likely, but it is a scenario where a contractor could really screw you.

A few ways that I have found effective:

1. Call area property management companies and ask about the area and whether they have any rentals (or experience with rentals in the past) in that area.

2. Try to connect with some investors in the area. The experienced ones probably either have knowledge of the area or know of someone who has properties in the area that they could connect you with.

3. Try to grab census data. You might be able to find info on owner-occupied homes vs total dwellings in the area which should provide a nice snapshot of rental demand in that particular town.

I know the MLS is generally regarded as a really poor resource to find good deals. It is picked over and great properties disappear within a matter of days (sometimes hours).

I would love to hear from others on how they utilize the "price reduced" filters on MLS listings to find good deals or targets for low-ball offers.

Personally, I look for houses that have been on market for more than 60 Days and who have also had price reductions within the last 60 days. What does every one else do?

As someone who has gone through the same debate (whether to get a formal inspection or not), go get one. The $600-$800 fee is worth the ease of mind, imo.

Am I misunderstanding that your property management takes 26% of your rents ($450 of your $1700 rent)? If that's right, then I would suggest going to find a new PM.

I agree with the HELOC option - especially since you are free and clear on the SFH.