All Forum Posts by: Brian Roberts

@John Sherwood

@John Warren gave you some great advise there. Personally this is how I break down cost for capex. The numbers will change depending on the number of units in each property.

Roof-$10k (30yrs)

Siding-$5-7k(20yrs)

Water heater-1k per (4 in your 4plex @10yrs)

Furnace-$4-5k per(20yrs)

Windows-$400per window(30yrs)

Entry door-$500 each(30yrs)

Replacement vinyl floors-$5per sq ft(20 yrs)

This isnt all the costs you will have but it's how I get a rough estimate for amount to work into my calculations.

So I take the a 30 yr total of estimated expense. 1 roof, 1.5 siding, 12 water heaters(4 units in your 4plex, 10 yr each), 4 furnaces x1.5, number of windows and entry doors and 1.5x the flooring calc. Then divided that number by 30 to get a yearly amount and then divide that number by 12 to get a monthly.

The math will change with size of property and individual features such as windows and doors and sq ft of the property but it will get you a rough number before you have looked at the property. Once you inspect the property you can adjust the numbers based on the like left on the existing items. For example if all the water heaters are new you can take that amount of life out of the calculations.

Hope that helps a little bit.

@Daniel Ditto

Nothing changes with your mortgage. Just need to make sure you change insurance to non owner occupied. It will cost more monthly but if you would need to file a claim and its listed as your primary residence you will have problems.

@Steve Proia

I agree with @Max T. Both the 529 and real estate are good vehicles for college savings and growth. I currently use both in the hope of giving my kids a good debt free start to their adult lives.

My investment in the 529 is what lead me to look into real estate more in depth. I wasn't happy with the returns I was getting for a few years in the 529 and I was looking for something to invest in where effort could lead to more return.

Nothing I can do day to day will effect what the market is doing and in turn how my 529 performs. However in real estate sweat equity when applied correctly can in turn lead to higher returns.

I like to have a little more control of my money and that lead me to put less in the 529 and more into controllable real estate. How much risk you are willing to take, and age of your kids will play a large part in your strategy.

@Kelsey P.

I would call a few similar rentals in your area and see how common/uncommon having a dishwasher is in your area for rentals. If everyone in the area has one you will need to offer one as well. If your competitors dont then I would fill the hole with a cabinet. In my experience dishwashers can be a real pain. If they have problems with leaks they can be difficult to see right away and cause some serious damage. Just one more thing to maintain. Not worth it to me if it's not necessary.

Sorry I know that's not really a brand suggestion but just a different point of view for thought.

@Stephanie Sicard

Congrats on getting started. I agree with a lot of what the others have commented but maybe my story can help you.

The first rental I purchased was a duplex. Reason being, in my area there are still some multi family properties that arent anymore expensive than buying sfrs. For example I can buy a single family for 30k-50k and duplexes for 50k-100k. So unit for unit cost is similar. The reason I bought the duplex is pretty much a direct contradiction to what you realtor is trying to sell you.

I like the fact that it has 2 stoves, 2 refrigerators, 2 hot water tank etc. The reason I decided to purchase is because it also has 2 very important things.... RENT CHECKS!! What's better than getting 1 check? 2 Checks!

It also only has 1 of a few things that are beneficial as well. Roofs, siding, driveways and yards.

Buying a duplex vs 2 sfrs will save me on a few of the major capex costs down the line also because it's one roof and not 2. It also saves me monthly maintenance because it is only one yard to mow.

So for me the duplex made way more financial sense in my area. There are pluses and minuses for each property type, but for me multi-family was the way to go. Dont let someone else's agenda get in the way of your future.

@Derrick E.

Sorry. Wasn't really talking about you business specifically. I'm glad you found a system that works great for you. I was commenting on a poster who asked about collecting rent weekly more specifically as that would be quite a bit more work then you are doing and difficult to accomplish at a scaled up level. Again, glad you found a good system for you.

Hey @Brock Hoffman

My w-2 job is as a union electrician and most of the advise you are getting is mostly accurate.

A commercial contractor will generally be 30% more than a resident contractor. They generally have more overhead and their employees generally are trained to handle more. A residential electrician here is a 2yr apprenticeship vs a 5yr apprenticeship for someone who is doing commercial/industrial work. Hence the difference in cost.

Without having a detailed scope of work it's very hard to get an apples for apples quote. Even in the commercial world with detailed scopes quotes will be wildly different.

A small shop that only has a few guys and is busy may give a large quote on a job that they dont want. If they get it they will figure it out. On the other hand an owner operator who hasnt had a job for a few weeks may work on a tighter margin to get a job. That guy might also give you a low quote and hammer you with overages or extras half way through costing you more than the others anyway. A commercial estimator is also going to over estimate vs a guy who does residential quotes for a living.

Best thing you can do is get an exact scope of work and get re quoted. You should get quotes with a smaller spread.

Some difference in cost can come from one company expecting you to supply materials and another supplying their own.

Honestly unless you have some higher end fixtures, even 13k seems high without the service in the scope.

@Wes Donithan

The biggest reason that a weekly or even biweekly lease isnt ideal is time. Even with 2 units can you imagine having to verify rent payment 8-10 times per month every month. That's the same workload as 8-10 units to make 2 units worth of money. It would turn into a nightmare super fast even with auto payments. With 5 units you would basically doing the bookkeeping of a 25 unit apartment.

While it is great to be able to "have a heart" this is also a business. I doubt you will find anyone, in any field, that is willing to do 4-5 times the work for the same pay.

@Christian Ferreira

Make sure that you document everything as well as possible. Any interaction between you and any of the tenants. Have the roommates make written complaints via email to get a timeline and accurate accounts of the situation. If it does come to eviction that will only help build your case against him.

As others have said, have the roommates call the cops for any threats. That's what they are there for. Any more complaints about noise have a certified letter to fix or quit sent to the tenant. Again this may help get him out on his own or will help in your eviction later.

@Andre' Arceneaux

Sounds like you are in a tough spot but one that is fixable. As @Jill F. Said you need to get a local contractor out there yourself and get the problem fixed. You can find out with the city what they have put you into rent escrow for. Fix the problem and get your money.

Secondly fire the property manager if they arent being fitting your needs. Sounds like they are doing a pretty poor job.

Some tough love thoughts though. The problems you are having are pretty well documented as the biggest issues of OOS investment. Not having the right team in place(seems like you have known the property manager was an issue) will get you burnt when you cant drive over to the property. Did you spend any time in Akron vetting PMs or talk to local investors before deciding it was a good idea to invest across the country?

There are 100's of posts on here about how great it is to invest in the midwest, which can be true if done right... but, it can be crazy difficult to deal with people who's office you cant go sit in until you get results on a Tuesday afternoon.