All Forum Posts by: John A.

@Cody Koetter

You handled this very well.  Congratulations.  I hope I never wind up in this situation.  But if I do, I'll refer back to this thread.

I've gotten 8-9 hours a sleep every night for the past 15 years.  I don't use caffeine past lunch.  I wake up every morning at 4:30 am and do my best thinking before lunch.

First, I'm not investing in L.A. or CA at all.

But, the way I see it, if a property doesn't cash flow in year one, one of two things must happen for it to cash flow in later years.  One, the expenses for the property must decrease.  Or, two, the rent must increase.

The only realistic way I see expenses to decrease is you pay off the debt on the property to create cash flow.  I would never count on taxes, repairs or vacancy costs to decrease.  I can see postponing cash flow to pay off debt early.

I think it is a gamble to expect cash flow based on rent increases.  Yes, it's nice to have rest increases if the market allows.  But, I would never plan on it  If rents are increasing, you can pretty much count on taxes and utility costs to increase too.

If there is another way of counting on cash flow out of a property in later years, I don't see it.

John

I learned from someone else on this forum (I can't remember who) to under promise and over deliver.  Meaning, give yourself some flex time when you tell the tenant when the problem will be fixed.  But fix the problem with time to spare.  An example would be:  If the hot water heater stops working and I think I can have it fixed within 48 hours, I'd tell the tenant I'll have it fixed within 72 hours.  But I'll try to fix it within 24 hours.

I've had 2 SFRs rented for about 3 years.  So far, it's been mostly plumbing:

Hot water heater pilot light out (gas).

Dripping faucets.

Hot water heater thermostat broken (electric).

Hot water heater pressure relief valve leaking.

Water supply line to Evap Cooler split open.

Every one of the plumbing problems was an easy fix and inexpensive.  But my biggest expense was the control board on an HVAC unit.

I do my walk through before the tenant signs the lease.  I note all problems and take tons of pictures.  When the tenant signs the lease, I walk them through the property and show them how to use the HVAC, the location of smoke alarms and fire extinguishers, and how to turn off the water/gas/electricity in case of emergency.  I give the tenant 48 hours after signing the lease to do their own walk through to find damages and record the condition of the house.  They must turn in the signed walk through checklist within 48 hours or the house is considered free of defects.

@Anthony Gayden, Sierra Vista is lagging behind the state in the recovery. The post is still down sizing and suffering through budget cuts. Home prices have been steady. There's not as many foreclosures on the market as a few years ago. But there are still deals out there. Rents were flat for a couple of years. They are starting to inch up a little this summer. I don't know of any wholesalers in this area. I've bought my properties off the MLS. If you're looking to invest down here, there are neighborhoods you want to avoid. And there are a couple of highly desireable neighborhoods.

John

I'd love to be there but the timing is bad for me.  If the meetings are on the weekend, count me in.

John

You can only go after the tenants for damages above and beyond the security deposit.  Wear and tear is a cost of doing business and should not be charged to the tenants.  So, how much was spent to repair damages and how much was spent to repair wear and tear?

There aren't any in Sierra Vista that I know of.  I would be interested in participating in one.