All Forum Posts by: BOB CRANEY

@Katrina Nicole-Ivy

When you learn to ride a bike, you don’t get taught to ride 2 at the same time.

What book, course, podcast or forum taught you to buy 2 properties you can’t afford, have never seen and don’t have any clue how to rehab? Your blasé attitude about loosing your auction deposit is why you will end up broke. You mindset sounds enthusiastic to the point of wreckless.

Do yourself a favor and go to some REIA meetings and find someone experienced in what you want to focus on and talk to them. If it feels right, ask to partner with them so you can learn while holding someone's hand as opposed to floundering around blowing money you don't have to lose so early in the game. If you come across as genuine and offer an experienced investor some value, then soak it up and do 1 project. Sell/rent/flip then do it again. Repeat until you can confidently do it yourself without the need to back out of a deal because of rash decisions.

Don’t burn out your flame of enthusiasm to early

I have about 10 Rental apartments and in some I supplied the washer and dryer and some I didn’t. The ones with W/D seemed to rent faster but not for much if any more than the apartments with the pair. I did a quick calculation and it seemed an average family of 4 would easily spend $35-50 per month if they went to the laundromat, not including trace time.

I can pickup decent used sets for less than $200, but the move in/out is a hassle.

Just looking to see in your 1-4 unit rentals if your including the W/D and if your getting a good bump in rent for it. Also, if you offer it as an upgrade how much did you ask for the W/D.

@Travis Kemper

You would probably be best to either seal the access off or

Make sure your lease specifically mentions the attic is to be used as storage only, not living space. Make sure hand rails are in place. I would also put up some kind of signage at the property to reinforce the storage only rule.

I would guess that most of the other steps on your house wouldn’t meet current code either for one reason or another. Just about every rowhome I ever rehabbed in baltimore had a “Non conforming” stair on both Floors.

I usually ripped them out and installed new, but it was easy because of the scale of my rehab.

@Dante Foreman

When you want to succeed bad enough, a full time job will not be an not be an impediment to your eventual success.

No baby can start running until they have learned to crawl, then stand, then walk, then run, no matter how much hustle they have. We are designed to build on what we learn like the baby. Falling on your face a few times will also teach you a lot about persistence.

@Anthony Wick

Sherwin Williams Agreeable Gray is one of their top colors. Not to dark and contrasts well with white trim or other darker accent colors on the same color swatch.

I have been using Pro 400 Egshel

For easy wipe off during tenancy and I don’t always have to repaint between turnovers

@Isaac Johnson

The biggest barrier to entry in larger MF apartments is the ability to qualify for the financing. A very small % of new investors are able to come up with 25% down on a multi million dollar purchase and still meet the net worth and liquidity requirements post settlement. This is why almost all large apartments are syndicated. If a single investor could take down a multi million dollar deal by himself then he would but it’s rare.

Even if you make decent money if you are not Accredited then there will be a smaller % of deals you would be qualified to invest in legally.

Limping in to apartment investing thru smaller deals will be the only way you can participate when you aren’t accredited.

@Yonah Weiss

If you desire better success with SFH then you need to model the same benefits you can get with MF. Buy more houses close together in the same neighborhoods, use the same materials and finishes in all for simplicity, negotiate deals with subs based on getting all your work, not just one house, negotiate better financing terms using a blanket loan on your whole portfolio with individual releases worded in, etc. With 75-100 SF homes you should be able to hire a full time bookkeeper/property manager, handyman and sub the rest out while you quarterback the team.

The biggest benefit of MF when you have enough units is that it's a business that supports itself and a lot of the savings you can get goes to the bottom line. The way large MF is valued is the major reason people want to buy it now due to being able to find a deal where you can force an increase in rents thru some combo of value add or better more efficient running of the property. With an increased NOI your MF value goes up and its independent of what any other MF complex near you is doing. You simply don't have that option in SFH when you property value is more closely tied to the others in the neighborhood.

The problems with MF more recently are that the prices per unit have begun to approach the cost for lower end SFH/town houses in many areas and it's starting to dilute the benefit MF used to have.

Without a bigger spread between cost per unit and rents, MF will begin to become less attractive as it will not have the cashflow to afford the additional overhead required to manage it day to day.

When a MF property has changed hands 2-4 times in the last 10 years there eventually not be enough meat left on the bone for the next guy to do any value add and then those properties will be selling off cashflow alone.

For a small owner it is also difficult to qualify for the financing to buy a 100 unit deal without doing some kind of syndication, which will dilute your ownership %, so you get a smaller slice of the big pie. Don’t misunderstand what I am saying here. The loans are available and the terms are reasonable but you have to qualify.

Fannie Mae basic requirements want you to have a net worth equal to the loan amount and also have at least 10% post closing liquidity. Not a lot of individuals sport this kind of balance sheet

@Mike Baldwin

Most small portfolio lenders will do a blanket loan for all 3 properties at better rates than each individually. You can get them to include an individual release for each property if you ever want to sell one at a time. Be very conservative on he cap ex and ongoing yearly maintenance. If you don’t have that figured in your GP # will be falsely inflated

One of them had unauthorized occupants (baby daddy and other family) repeatedly and thought she could get away with it. 

Another was always on the edge of going under financially, even though Her portion of the rent was around $100 on a $1350 total rent. I can over one day to fix something that had failed on the recent inspection and found the power was cut off. She made some excuses about a misunderstanding about the payment to the Electric Utility company but it was BS. Come to find out she decided her new man was going to take care of her better than section 8 so they officially kicked her out for not keeping utilities on during her tenancy.

Had another lady who said she wasn’t a smoker but turns out she lied. I don’t rent to smokers, who are not a protected class. While doing some service one day, I took pics of cigarette burns in the carpet and ashtrays hidden away full of cig butts. When the offending tenant heard my phone camera go off she came running in and flew into a tizzy, saying I violated her privacy and kicked me out. I filed termination paperwork with section 8 and she tried to deny it but I had proof. She was a real pain to get rid of and began a war of attrition by calling the local building inspector, and reporting a bunch of frivolous items which of course I had to answer. Eventually I was able to get her out and due to being evicted for a lease violation she got kicked out of the program. 

@Adam Shelley

You should attempt to troubleshoot any issues over the phone with your tenant before sending over any contractors. Between having them send me pictures or even doing a FaceTime with some, I am able to ascertain what the problem is and the best course of action. Most tenants are fairly ignorant of how to maintain a home/apartment and less motivated to learn how because they don’t own it.

You don’t necessarily need A licensed plumber or electrician to look at something as basic as a light switch or clogged toilet. Most of these properly licensed contractors have a trip charge of $50-75 plus and hourly rate of $90-120 hr for time on site. Consider a qualified handyman who has a much lower overall cost and can look at and repair a wider variety of things. If it turns out it’s over his level of expertise then you call in the next level company.

You can also reinforce with the tenant that if you send someone and the problem is not one you are responsible for per your lease then they will be responsible for paying the bill. You want them to call you first and then you manage the situation appropriately. Once you have been in business a while you will see the same common issues come up again and again.

I have started to assemble a book of common issues and fixes that I will eventually put together into a handout that will be supplied to the tenant at the time they move in. Continuous learning and improvement of your systems will make you a better LL for your tenants.