All Forum Posts by: Bill B.

Use Joseph’s plan or get all tenants to agree not to use any water for 5-10 minutes and see if the meter keeps spinning. (On a single family home most water company’s can tell you the last time water stopped flowing to the home. So when they say 4 days, you know there’s a leak. )

If the meter keeps spinning turn off the water valve to all toilets. If it stops turn them back on one at a time. That’s 90% of your leaks, and BY FAR the cheapest. You do want a main line leak.  

That will help. Now maybe someone form Rexas will respond or you’ll have to look it up yourself. Try adding it to your profile. It will help in the future. 

Ps. If you type “@“ and then a user name it will let them you know you responded to them. 

@Alexander Ignacio this is an example. 

You forgot to put your location in your profile. People can only guess without knowing your location.  Some areas may let you charge to replace the affected areas. Others will pro-rate it depending on how old it is. (The IRS says carpet should last 5 years so you may be out of luck if it’s older than that. Again, depending on your market.). Other areas have started to disallow for anything that could be considered wear and tear. Even nail holes, small scuffs and stains. 

You may want to hire a PM if you are too busy working to learn your market’s rules. If you violate one of them you could easily end up owing the tenant 2 or 3 x times the entire security deposit. (Especially for failure to document deductions or return the money owed in time.)

Any chance your PM offers “ala-carte” services? Where you can pick which ones to use? Your $100/mo is AWESOME on $2,000/mo rent. I’d be charged $160/mo.

But….

I pay $300 to find a tenant and $150 to rent a tenant for a year or more. ($0 for MTM or any lease less than 12 months.)

I HATE paying the $150, I don’t think there’s ANY chance I’d pay $2,000 for a renewal. Not if it’s an email or web form the tenant clicks on. I’d leave a PM before paying that. 

Any chance you’re using renter’s warehouse? (I ask because of the low flat monthly fee.) I used them to find me a tenant and that tenant has been great. But this was a class A townhome at $3,200/mo and I didn’t need them to manage the property. So I paid them a month’s rent to get the tenant. (THat stung but they guaranteed a year of occupancy for that.) 9 years later the tenants still there and I’ve paid zero renewal fees. 

Sorry, I misunderstood when I read this part 

“I can put 25% down and get a $300k Townhome to cashflow near 0.”

And thought you were assuming $225k on a $300k townhome.  

You could/should ask for at least 4-5% off if neither of you pays realtors commissions. If they sell to someone else they’d pay $12-$15k in commissions and only net $285-$288k.

If they owe near market value they’re really not in a position to sell. They must have put $0 down themselves or the market is falling and you may not want to buy there. They should have put at least 5% down and earned 4-6% in appreciation over a couple years. Giving them some 10% breathing space. 

So the plan is to earn NEGATIVE $300/mo on $75k instead of a positive $300/mo GUARANTEED return with a bank CD. IF, you self manage for free, and nothing breaks, and there’s zero vacancy?

Sounds like a great idea, with the best of intentions, what could possibly go wrong?

 I guess, if you were unemployed. and wanted to pay $600/mo to buy a job. As long as your crystal ball told you a tenant would move in day 1, stay for 7 years, and nothing would break. 

Don’t get me wrong. I’ve bought negative cashflow deals. But I paid under market, had a 15 year loan, included Managment fees, knew I could raise rent, values would rise, and I was negative less than the principle portion of my payment. 

Until you have more than 20 rentals Quicken (quickbooks little brother.) is cheap, easy, and overkill. It will auto download your bank and credit card transactions. You can get reports based on date range, property, category, account, personal/business, or any combination.  

I wonder if you could change any of those assumptions and come up with the appraiser’s $70k/door? Since he actually looked at the building and the real numbers. 

Especially if you compared a new buyer to how this was purchased. 20+ years ago as a HUD project with "historical credits". They might only be cash flowing because they have a loan based on the value 20+ years ago, minus the credits. We just don't know.

I used to think they should pay at least a little under market but think about it. 

If your place is worth $2,700 and they already live there. Will they take a day or two off from work to look at places and do the move. Pay for new applications and security deposits. Lose some of their current security deposit. Pack and move everything to pay the same? I assume they’re out $1,000 if everything goes perfectly. 

I bet most people would pay $100/mo over market to not have to move. 

Imagine this situation. You’re told your property taxes are going up $100/mo or you can move to an identical house 4 miles away and keep paying the same.  Is anyone that can afford to stay moving?

ps. You can type @ symbol and someone’s name to get their attention. 

Like @Linda Roberts. I didn’t know about the dog rule. But then do they even have to ask you about the additional dogs?

If the income per door is $1,500/yr ($125/mo) then $70k seems pretty high. That’s a 2% return. You could earn twice as much in the bank. Is there someone willing to buy your shares? You could sell tax free and double your return. 

You really need the appraisal “fixed” if it’s wrong and you don’t plan to sell now. If a couple years from now you sell for $105k and the $70k appraisal sticks. You will have gone from 100% tax free to 33% taxable. 

But think about it. Would you give me $70k or $105k for a $125 monthly check?

Good luck and sorry for your loss.