All Forum Posts by: Daniel Hanson

@Account Closed

I don't have a specific question by question checklist, but I get a phone conversation with them and see how well we would work together.  During the phone call I'm trying to gage their motivation vs. my goals.  I will also try to figure out how large their internal office staff/ contractor team is, and what is their capability to take on new properties.  Also looking to see their reaction to certain parts of Milwaukee county where I hold my rentals- some PM's prefer specific parts of town- takes a different management style depending on the tenant base.  Also geographically how close they are to the property for responsiveness- for my Waukesha-based properties I prefer a Waukesha PM for example.

My goals for a PM are as follows:

Properties will be managed and maintained by professional property managers, who provide these services: lease-up/ screening, collections, direct deposit to my bank, quick tenant response, maintenance (billed separately), < 24 hour response to owner, escrow for security deposits, tenant community communications, inspections, late notices, final walkthroughs, and eviction support (billed separately) for 8% to 10% of monthly rents. Set up systems to operate passively.

@Brian Garrett

I have several focuses.  One set of searches focused on building type, for example looking at keywords like multi-family, duplex, excluding terms like "single family" in my case.  Another set of search terms focused on seller financing keywords, and a third focused on keywords that indicate distressed sellers.  That's why I recommend  starting the category search wide open to learn the keywords, then gradually add specific keywords while eliminating certain subcategories.  It also pays to learn the advanced search syntax, so you can screen out the spammers who    post generic listings 10 times a day.

@Brian Garrett no problem.  The addition of saved searches on Craigslist in the last few years has enabled you to create a search, and continually update that search as you get more interested in specific areas or keywords.  So I actually have about 30 different searches set up, from real estate to vending routes to ATMs to shop tools I'd be interested in buying.  I recommend starting with a category search wide open so you can get a feel for the whole range of listings for sale and also what keywords are interesting to you.  Then after a while you can knowledgeably search for specific terms, and exclude others.  One tip that not everybody knows, if you limit your searches by price, it also unintentionally excludes listings that don't have a number in the price field, so I leave price wide open.  I look at the searches either daily or a few times a week.  You can also set them up to be emailed to you, but unless you have a very targeted search, that's a little overwhelming.

@Stephen Yancey I have had tremendous luck setting up saved searches on Craigslist for the milwaukee market. Lots of the Craigslist stuff isn't in MLS, so you don't face much competition on bidding. Of course need to have your BS filters on.

Thanks @Dawn Anastasi

Hi Jason,

I  live in Waukesha but mostly invest in Milwaukee County.  Be great to meet for coffee if you want sometime.

@Varinder Kumar

Here is the math as I see it, just wanted to make sure I could summarize what your post says:

Purchase Price $406k
Down Payment @5% =$21k
Original Mortgage $385k
Rehab $105k
All-in purchase price + rehab =406k + 105k =$511k
All-in Cash= 21k + 105k = $126k
Current value = $525k to $550k
Current mortgage = $372k

Not clear if you have lived in the property prior to renting it out. If not, you will still have capital gains tax on the sale, just depends if it is short term or long term capital gains. Very simpistically, ignoring capital gains taxes and accumulated (negative?) cashflow and selling costs, it looks like your profit from sale would be mortgage paydown (385k-372k) + appreciated price minus all-in purchase (525k-511k) = 13k + 14k = $27k, or $52k if you are able to sell at the higher price. Once you subtract the other expenses I'm ignoring, you may find no profit in selling.  I'd recommend doing the math in a spreadsheet and accounting for all your costs so you can decide the true profit before making your decision.

@Aaron Hite Are the buyers going to occupy the house or will they be non-owner occupied?  You will need to take account of the Dodd-Frank rules.  There are some summary articles on BP about Dodd-Frank, starting with this one as an intro:

https://www.biggerpockets.com/renewsblog/sell-properties-owner-financing-and-avoid-dodd-frank/

 Yeah, it's always gut check time when you want to spend "x" but that account only has "y" dollars

@Jordan Sutherland

There is lot of good advice above about marriage and cars.  Since that is covered I'll give some personal finance advice.  

We used to always have this debate in our household about how to allocate the money that was sitting in 1 single pot at the bank.  We solved it by setting up a free account at ING for savings ( it's now Capital One 360) and then creating about 8 sub accounts on the ING account.  ( emergency fund, car buy and repair, property taxes, RE down payments, vacation, etc.). A portion of our paycheck goes directly to our spending checking account for things like mortgage, bills, groceries etc, but the rest gets deposited to the ING account, and then automatically transferred to the various sub-accounts.  Since you've already saved up $40k on one income, I'm sure you can figure this out.  For us the most valuable part was sitting down and making the decision on how to split up the pot of money, because every decision to put $1 into a sub-account took that dollar away from a different account.