All Forum Posts by: Andy McQuade

Hi everyone, 

Just giving some official notice that Knox REIA is under new management as of 8/7/24 and we're in the process of finishing the new, updated website. Not all the links work, please be patient.

What is working is the membership back end of the site and the calendar.

We ARE a chapter of National REIA, so joining gets the paint discount, cabinet program, and rebate - as well as access to all the other national vendor perks and programs.

We're in process of getting local vendors and sponsors lined up as we move forward.

Starting in September, meetings will take place in the evening on the 3rd Thursday of each month, 5-9pm, food and non-alcoholic refreshments provided (buy your own booze).  It's a long meeting, but a new format.  5-7 is networking, 7-7:45 we'll have an educational speaker and q&a, and 7:45-9 will be more networking.  Come as you are, stay as long as you want! 

While I'm still up in Rochester, NY and working with FFREIA,  the new President, Scott Gonyeo, is local and working hard to rebuild the group.

Check the website out for more info, and please give us feedback!

@Peter Scott you can't collect a debt from them without either a judgement or negotiating with them directly.  Those are your only two options or you're going to run into a mess of laws.

Every real estate investor needs at least 2 people on their team before they get involved in the market

1) a good real estate attorney that works in the market and knows the system 2) a good accountant that knows how to keep cashflow up 

Always consult your attorney for stuff like this, because their job is to keep you out of harm's way.

Rents increase because cost of living and costs of employment keep rising - you can't charge the same amount of rent when you're paying higher property taxes, higher maintenance and labor costs, etc.  As long as they maintain a cost level that is appropriate for the property, neighborhood, and local comps, there's no problem.

While updating the property is usually a trigger for a rent increase, it's not the only reason it happens.

Like I said, 10% is average for my area.  Buffalo has a couple that do as low as 7.5%, Syracuse, Rochester, Albany all sit around 10%.  Here in NY, it's an extremely low barrier to entry as you can still get single family homes in these downtown markets for under $20k, it's the property taxes that kill you.

The amount you will pay is largely determined by the labor and operating costs of the companies in the market.  If your market supports 10%, that's going to be what you pay.  When you shop it out, you'll get a feel for what market demand is.  From Buffalo to Albany, the average is 10%.  We're not a major metro market, but there is a reason why Rochester NY has been in the top 5 hottest real estate markets in the US since 2015 - it's because we're not NYC, San Francisco, Portland, or Seattle.  Average rent here is under $1100/mo, and section 8 will only pay up to $1500 for a 3 bedroom.   

Find a property manager that is well respected and does the right thing, and has average rates for your market - it's OK to pay a little more for better tenant screening, performance guarantees and not having your property turn into a derelict.  16% with a large signing fee and a difference between 1st year and later fees, as well as a premium fee for a low unit count if the PM is already working in the area will not fly in upstate NY - so take all the advice here with a grain of salt and shop around where your units are.  Beware anyone ridiculously low or stupidly high.

Make sure you get with your lawyer and write an addendum to your lease which forces them to have renters insurance that covers the pet.  Insurance agencies can't discriminate on breed anymore if it's a dog, so having this as part of your lease makes sure that if they don't have insurance in force you can evict for breach of lease.  

It WILL spread to other units as they run from the chems and actually move into the unit without the chemicals during treatment.  Get the whole thing treated.  It's pretty much a given that every rental moving truck comes with bedbugs on the east coast now, so you also need to make sure there is a clause in your lease for it.  

Force a renters insurance policy on the tenant with coverage for pets.  They can't discriminate anymore based on type of dog, etc.  

Also, as part of your lease addendum, make sure you consult a lawyer and that it asks questions about the pet (if it's ever attacked or bitten anyone, if it has issues with children, etc).  If the answer is yes, and the dog attacks anyone, you become liable.  

@Maile Clancy, property management firms typically charge between 6.5%-12% of gross rents to do what they do.  They can pay their teams based on this because of overall volume they handle. 

If your rent is $1k/month per unit, and you have 12 units, you're talking about an extra $1,200 a month...to handle all the calls, screening, maintenance, travel, insurance, inspections, lawyers, etc.  At 2AM when a hot water tank bursts, who is going to answer the call and drive over there to stop the damage from getting worse? 

When it's time to turn a unit, you will have to choose to either 1) hire out help to complete it within 2-3 weeks or 2) to lose rents from that unit until your husband can complete the work solo.  On the surface, this sounds like someone will be working for below minimum wage to make this work - unless everything in all 12 units is brand new and you have good tenants locked in and paying for the next 5 years.

Maybe leaving California taxes behind will add enough income for you to make this work.  Maybe not.

Do you have a team in place in this location? A good lawyer, an accountant, and an insurance provider who knows the business?  If you're serious about taking this over, you need a team that understands the business and your local market first.

Hi @Matthew Johns, property managers costs vary by market, but up here we typically see 10% of gross rent as the fee they charge.  

Not all property managers are created equal - there are a lot of them out there doing the right things and adding value to your property via good maintenance and screening.  Others will suck the value out of your property and leave you with a derelict building when you finally fire them.

Do research and choose wisely. 

Depending on what's down there, you may have another option.  

I've seen people bring in temporary steel (for clearance reasons), jack up the entire floor 1/4" per week to level (could require 3-4 pieces of steel and multiple posts) and then correct the failed beam and put everything back.

Since you've already done some modification to the support, this may not work.

In any event - it sounds like it may be cheaper to address this from the top down (removing the floor) vs attempting to find a contractor in your area with the correct insurance and training to do this without long-term repercussions.