All Forum Posts by: Bonnie Low

Nicely done @Kevin Zimmerly! I have to ask, what is a CL-100??

Hi @David de Luna - the 1% rule is a guideline, not an absolute, and I tend to think about it working the other way around: If you pay $60,000 for a property, the 1% rule says you want it to rent for at least $600/month. The possible rent doesn't determine the property value. That is determined solely by comps in your area. If they're at or above $60k, you should have no trouble selling it for that. Sounds like you're also wondering if it will be harder to sell if there's a tenant in it. I think the answer is yes. First, you have to coordinate showings with them and tenants can be intentionally difficult. Second, they may be messy so your house doesn't show well. Third, they often refuse to leave during a showing and prospective buyers HATE looking around "someone else's home" while that someone else is staring them down and making them feel uncomfortable. Finally, you run the risk that they tell your buyer something about the house that isn't true, like the basement floods or the roof leaks - just to sabotage the sale. So if you want to sell and sell quickly, don't put a tenant in there. Good luck to you!

@Ellie Perlman - your explanation of cap rate is the best, most straight forward explanation I've seen yet! Thank you.

@Jason Weeks - blue heeler cattle dog for me ; )

@Mary Mitchell this is great info. I would not have thought to ask them to carry a liability policy for their dog or to ask to meet the dog first. Thank you!

@Matt Stricklen - funny you mention vegetable gardening during COVID. We are finishing up a BRRR and decided that a few raised bed garden boxes in the backyard would not only be cheap landscaping, but would really appeal to folks as everyone seems to be interested in raising their own food these days. I found someone on facebook market place that makes them out of reclaimed lumber and had them build me two 3' x 6' boxes for $40 each. That's probably the cheapest landscaping we've ever done, LOL!

We're getting ready to rent out our 3/2 1250 sq ft recently flipped home with a small front yard and generous backyard. As pet owners ourselves, we're willing to allow our tenants to have a family pet, but realize both cats and dogs can potentially do damage. Landlords seem to be fairly evenly split between the NO pets camp and the Pets are ok and that's what a deposit is for camp. We tend to fall into the latter as our property is in a neighborhood likely to attract a family and families often have pets. So I'm wondering how you handle this? What do you allow: cats, dogs, numbers of each, size or breed restrictions and what kind of deposit? Any input would be much appreciated!

If you're able to get the rents up to where you want them and keep her in it, I'd do that. She's already done damage to the place it sounds like. It wouldn't make any sense to sink the $ into cleaning up the cat damage and then rent it right back to her or to someone else. She obviously doesn't care or doesn't notice the smell so I'd just kick the can down the road until she moves out. But I would insist on a semi-annual inspection by your property manager to make sure she hasn't moved more cats in or done additional damage. Cat smells can be very, very hard to get rid of. We've been in houses that need the subflooring replaced because the urine seeps through the carpet, the padding and into the subfloor. Same goes for walls and baseboards with cats that spray.

Hey @George Rodriguez congratulations on being ready to get started! We flip homes in California. To give you an example, we probably looked at 50-75 properties, offered on 20ish, and got 2 under contract. That's not at all uncommon. Given those numbers, it is VERY, VERY hard and inefficient to have a GC go with you to give you a repair estimate each time. Unless your real estate partner happens to be a GC, you'll burn your bridges real quick. Instead, I recommend you educate yourself as much as possible on estimating repair costs. BP published a book on estimating repair costs - it's a bit dated now but still gives some really solid information. You can also call around your area to get an idea of big ticket costs, like replacing an HVAC system, windows, interior and exterior painting and a new roof. All of those are very common repairs/replacements. Knowing some of the major costs should allow you to run your numbers and see if the deal makes sense. If it does and you're able to get into contract, make sure you have an inspection contingency and during that time period, get your GC to look at it and give you an actual repair estimate. Hopefully, you were in the ball park and the numbers still make sense. I wouldn't waste my GC's time on anything I'm not in contract in. Where we live, they're just too busy and we want them to know that we're serious customers, not just tire kickers.

If the comps are $215-$225k, it seems very unlikely you're going to be able to get it appraised for the 240k that you want. The appraiser might reconsider if you can bring comps that show the price range you're looking for. If you really want to hold out for $240k, you might have to move on to a different buyer who can bring more closing cash to the table. This isn't uncommon in a multiple offer scenario.