All Forum Posts by: Bill Pate

First off I think you did things right.  I always low ball offer properties.  Sometimes it works sometimes not.  I have bought three properties in the last two years for a total investment of $65000.  Now I was able to command a better price because I paid in cash and all three were desperate to sell.  The three properties include a 2br, 1.5 bath condo in an A+ neighborhood, a duplex and a single family home in a C neighborhood.

I have owned a negative cash flow property for the last 11 years.  It's how I became a landlord.  We owned a small 2 bedroom house that wouldn't sell in 2007, so we rented it out.  I still lose a small amount of money on the property each month, but have had some major maintenance expenses over the years.  Including new furnace, fixing the sewer lines, replacing the front porch.  The long term goal is to pay it off and turn it into a positive cash flowing property.  The house is in a great neighborhood and rents very easily.  That being said I would not buy the house again had I known it was going to go this way.  We do own 7 other rentals that cash flow very nicely.  The other 7 are paid off and were bought when the market was at the bottom, so we got some really good deals.  One of the properties was purchased as a negative cash flow property with the intent to turn it into a really good cash flowing one.  The house is a duplex and was bought due to a bankruptcy, so I got it super cheap.  I have had to put a lot of money into the property to bring it back to livable condition.  I started just over a year ago.  So I have been losing money this entire time.  Now the property is almost done and will cash flow very nicely once the other half of the duplex is rented out.  So is just depends on the property and if you can get it to cash flow positively and how fast.

Fly down to meet them.

We live in the Cleveland area.  We have 8 rentals total 5 in Lorain County and 3 in Cuyahoga.  We have one section 8 tenant that came with a property I bought a couple of years ago.  We haven't really had any problems.  Personally I won't consider section 8 in Cuyahoga county because of CMHA.  LMHA in Lorain County has been great to deal with.  We have had a couple of times where they mail something that requires me to do something and we have very little time to react because it took a few days for the mail to come.  First time was the annual inspection second time was some kind of certification.  Other than that no problems.

My payments this month did come through, but I just went in and disabled all my properties with ERP.  Might as well head off the problem before it becomes a bigger one.  It's a shame too because I have been using them for almost a year with no hiccups.  Oh well I am glad I pay attention to these forums.

There is a 4-plex close to me.  It's a foreclosure listed through Hubzu.  The address is 378 S. Main St Amherst, OH 44001.  The list price is $15,900.  That's not a typo, but it's an auction and realistically I think it will sell between $75,000 and $110,000.  Depending on what kind of repairs it needs to make it rent ready it could be a really nice property.  Amherst, OH by the way is probably an A- neighborhood, with very low crime, and excellent schools.  It's considered extremely desirable especially for renters.  I posted it because I saw it and thought it could be a good deal, but it's not what I am looking for right now personally.  It looks like there are (2) two bedroom units and (2) one bedroom units.  A very conservative estimate on rents would be $650 a month for each two bedroom and $575 for each one bedroom.  You could likely ask more, but I am being conservative.  If after repairs your total price is $125k then the rents would bring in just under 2% a month...

@Cody L. you won't care about licensed and bonded until you need an inspection or the work the person does causes a fire that won't be covered by insurance because they weren't licensed and bonded.  Stop being cheap.  You could be looking at manslaughter charges because you used a contractor that wasn't licensed and the house burned down with the people in it.

The very first rule of landlording is stop taking things personal.  I have spent over 12 hours on my hands and knees to sand and strip a subfloor because of the smell of pet urine only to have the next tenant's dog pee on the floor.  You just have to take these things in stride.  Remember it's just a business and don't make it personal despite your hard work.  Also remember for rentals good enough is just that good enough.  Renters aren't going to care about how much work you put into the unit, so you shouldn't care either to a point.  Make it clean, safe, and bug free.  That's my motto.  Anything more than that and you are throwing money away!

$6000 a year in property taxes and only $1200 a month in rent?  I wouldn't touch it.  I have one property that gets $1100 a month in rent and the property taxes are $1100 a year.

Chris is right.  The bank won't care and you can complain to them until you are blue in the face.  They will tell you to walk.  If you really want the house you just have to be patient.