All Forum Posts by: Brian Kraft

Would you smartypants (with "bigpockets") please weigh in and innumerate the pros and cons of investing in markets of varying sizes? A commonly stated risk of a smaller population is possibly having an employer, that's providing jobs to a rather large segment of the population, leave/shut down. 

What are other things to consider (I know there are many!)? How does your strategy play into your decision of location as it relates to population size?

Thanks for all the input. It sounds like I'm more or less headed in the right direction -- and I always appreciate all the guidance and invaluable little tidbits.

@Joel Owens -- great question -- it's not been my plan, but it's important to know what's possible on the land, so I will know those details here shortly.

@Todd Dexheimer - A T3 4 cap wasn't an approach I was familiar with, but I get it. So, I assume that'd be the same as saying you're aiming at 16 purchase caps or higher (while using the most accurate data you have)? While @Matt Popilek said 12 cap or higher. I imagine it's based on your individual tolerances/the specifics of the deal, but is there a rather standard purchase cap rate "rule," a la 70% ARV, etc? I've been somewhat familiar with market cap rates, but the purchase cap rate is a more recent variable for me, that I need to get a better handle on.

Thank you both for the additional input. 

@Matt Popilek -- curious if you use a certain default percent for maintenance and vacancy when analyzing to account for the higher-than-expected? I've seen some guidelines, but curious what you think is realistic. 

 Well, that's super helpful -- I will be sure to look at the T3 (I didn't know what that was until you mentioned it and I researched it... learning curve and all). 

I don't have the last 6 months yet because it's been a chore to get much of anything from them thus far. I mean, they're trying, but they're trying to clean up a mess and it's at their own pace. But, until I started talking to them, all they knew was they wanted to sell, but they hadn't yet prepared a single thing for the sale. They were planning on selling retail, but I found them first and we've started to talk in greater detail. Next I'll be asking for those last 6 months, with a specific eye to the T3. Thanks! 

Hey -- I'm keeping my SFR/Duplex buy and hold portfolio and heading into out-of-state multifamily, so I'm still trying to grasp various elements. I'm looking at a property now that has been mis-managed by some adult siblings, who received the building after their parents' death several years ago. The more responsible siblings have even more recently taken over management from the less responsible siblings, as they try to bring things back into order after a rough couple years.

They've provided me some initial number that cover their year until Nov 30, 2017. Based on that, there's a very, very low NOI (again -- poor management). Now, I haven't gotten any numbers from the last 6 months, but based on some conversations -- it's likely that an even more current snapshot of their NOI would prove to be better.

So my question is -- what's the typical approach for arriving at a possible purchase value -- as it relates specifically to capturing the NOI in time, especially if it seems to be changing somewhat rapidly? TIA!

A few of my properties were hit. I just received reports/checks from the adjuster. I have everything under the same insurer and I'm bummed to see they want me to pay the $5,000 deductible for each property. Is it worth me trying to fight that and see if they can combine into one deductible? I also have an umbrella policy, but I have yet to review the details of any of my policies just yet. I'm about to dig in. I'm not sure if an umbrella policy is something useful in this type of situation for a single event. Or the fact that all my policies are under one insurer. I'm sure hoping so! @Bill S. or anyone else have any helpful guidance? Thanks!  

I'm also wondering if anyone has insight into national lenders (in addition to Wells Fargo) that do HELOCs on rentals? I'd rather not randomly call around and sit on hold over and over before being told 'no, we don't offer that.' So, any guidance would be great. Thanks!

The polymer solution looks like an interesting one and one that will hold up for a long time. I would assume covering hardwoods with it would leave the wood hard to bring back, if I wanted to refinish them someday. Thoughts?

Also, still curious why a vinyl solution like Ultra Allure would be a waste. Anyone have insight into that? @Bill S.? 

Thanks, all! I appreciate the advice. I'm getting the bed bugs taken care of.

@Bill S. I'm interested to know why you think Allure is a waste in this case?

If using floor paint, how often does that have to be re-done to keep it looking in pretty good shape?

I'm wondering if I can get some help on navigating a bed bug issue in Colorado. Bed bugs are something completely new to me. I also have a question about vinyl flooring going over hardwoods (what!?!?).

I purchased a duplex a few months ago and inherited tenants on each side. There was no mention at any point of any issue before or shortly after purchasing, but about 1.5 months ago, one of the sides said they were seeing bed bugs and said they would work on treating it (with Home Depot products). They were not asking how I was going to fix the problem for them--which I appreciate. Having no knowledge of bed bugs, I did some quick research and read a mix of reports about different treatments being effective or non effective--depending on each unique situation. I had read that the home kits have the possibility of being effective if they are used repeatedly. I shared that info with the tenant and suggested they do multiple treatments--to which they agreed.

I checked back a couple weeks later and asked if they were having luck. They said it seemed like it was working and they were planning on doing another treatment still. 

A few weeks after that (a few days ago), the tenant (month-to-month) said she has a family matter and needs to move out at the end of March. I asked if they had the bed bugs all taken care of and she said there are still some. I told them I'd get back to them on that.

Now, the lease I inherited did not have a bed bug addendum nor any specific mention in the lease. Interestingly, the other side, whose lease started about a year later (almost a year ago)--did sign a bed bug addendum. I don't know if that was done by the previous owner just to cover themselves better in general or it was due to some specific bed bug activity. I've not heard about any activity on that side, although I've also never asked. And I'm not sure if this info is pertinent, but I thought I'd share it anyway.

The side in question has... yes, the tenant's used furniture...and somewhat thick carpeting on the main level, as well as the living areas in the basement. I'm not really sure how to proceed. Who's responsible for **effectively** exterminating? How do any CO laws enter into this current situation, as well as moving forward with future tenants?

I would imagine removing the carpeting (and their furniture) would be helpful, but I'm sure it's not THE solution. But, that does bring me to my next question about the flooring...

At some point I thought I may want to replace the carpet (yet, didn't plan on it at this point, but will if it helps the bug situation) with some Ultra Allure, which I've put in other properties and like a lot. It's a pretty simple replacement for the basement with carpeting, but here's where I'm really flummoxed-- under the main level carpet are hardwood floors. But get this... they are pained WHITE! Apparently interesting things were happening back in the 70s and 80s...and apparently they have made somewhat of a come back, but I don't think it's for the best in this case. So, instead of stripping the paint and refinishing them--considering it's a C+ type rental, I'm thinking I may just be better off with Ultra Allure going right over the top of the white wood floors. I figure there will be less maintenance required over the years with this approach, but I'd love others' thoughts.   

Any help on either/both matters would be great--thanks!