All Forum Posts by: Anthony Freeman

If it exists, a mortgage or deed of trust will be recorded in public record at the county courthouse. So, yes, it is public information that a person has a mortgage. Just search your county records via the register of deeds. For Phoenix, just google phoenix arizona registry of deeds and click on Maricopa County Recorder and Elections Department, then select Search Recorded Documents under the "Recorder" tab. Then you can search for documents. 

Using a percentage for maintenance is foolish and here is why.  

If I have two 3/2, 1000’ properties both similar age and features, one is class C- and rents for $1k/month.  The other is class A and rents for $4k/month.  

Which do you think will have the higher maintenance/cap ex costs?  My bet is the one that rents for $1k will have the higher cap ex/maintenance.

Now 2 houses one is 5/3 inland 3000’ with a big yard in nice class b area with a good tenant that rents for $4.5k/month.  The other is a 3/1, 850’ with virtually no yard 100 yards from the ocean with a good tenant that rents for $5k/month.  

Which do you think will have the higher maintenance/cap ex costs? My bet is the one that is 3000’ with the lower rent will have the higher cap ex/maintenance.

That is the problem with basing maintenance/cap ex as a percentage of the rent.  

Percentages only work when they are derived from a dollar estimate and then applied to very similar properties.  You might as well not use the percentage and use the dollar amount.  

by the way maintenance/cap ex is under allocated for small unit count properties in nearly every case.  How do I know?  It is because I have filled out spreadsheets with maintenance/cap ex cost and expected life of item for all significant items. The sum of these items is significant.  

Good luck

8-12% a year AFTER you have made upgrades. If we gut renovate places for ourselves or clients, we budget 2-5% depending on how thorough we were. If we also replaced mechanicals, roofing, siding, windows then that number is 2%. 

I don't trust home warranty companies. They look for the cheapest way to do things to avoid a payout. I'd rather have extra cash on hand to handle the problems myself. If you're strapped for cash it can be a good option but I try to avoid it.

@Anthony Freeman

I always suggest to investors, and homeowners to avoid home warranties.

"the typical home warranty costs $450 annually, and only 25% of premiums are paid to homeowners. The company providing the warranty keeps most premiums as revenue and profit."

https://www.ramseysolutions.co...

https://www.zanderins.com/dave...

Every time I hear about property warranties is when something major goes wrong, and the tenants are complaining (rightfully so), and the warranty company is taking their time accessing the situation, and then they tell you there is a deductible, they only will cover so much, you need to use their preferred company, and it will take 3 weeks. All the while, the AC is out, and it is July.

It is much better to just have a reserve fund, and add to it monthly. If you know that something major is going to need replacement in the future, increase the monthly amount you are depositing into your reserve fund. When something goes wrong, you can find the best contractor for the job, who can make the repairs right away, and now your tenants are happy, and you have minimized the time you would have spent speaking to your tenants about the delay or fighting a warranty company.

Never