All Forum Posts by: Bruce Scannell

@Dahlia Khalaf what makes RUBs costly? You just need to get the tenants to agree to it in the lease and you simply bill the tenants back by means described in the lease...done!

@David Sanford, hard money can play in apartments but typically the “flips” take longer than a house flip, on the order of years instead of months. Where hard money plays is taking down a property cash, only to put longer term debt on it based on purchase details as soon as possible. The cash obviously makes your offer more interesting to a seller as the commercial loan needed for an apartment property with take 60-90 days to close. 

Hope this helps. Where are you looking at buying? VA?

Bruce

@Jeremy H., I know it doesn’t add much, but I’ve personally never heard of them. Hopefully this will bump the post so someone who has can comment

Good luck!

Bruce

@Brandon Hall, it’s funny how different peoples opinions are. How many units do you have? I’ve read the previous posts, and although you won’t make enough to support an assistant with only a few properties, you won’t need one. And who’s to say managing a few units is hard work, that all tenants are nasty, and there’s no money to make? 

First, a little background on me to qualify my response. I have a graduate degree from USC in engineering, still work full time, and do well, but working the 9-5 and trading my time for a set amount is what bothers me, I would say for any amount, but that’s not exactly true, but close. Instead I would prefer to leverage systems I’ve created to scale how much my time is worth. In other words, how much I make at the office is linear, the more hours I work, the more money I make, linearly. However, if I can create a system managing one property, then apply that to another property, it will take less of my time on the second than it did on the first, and so on, making my time effectively worth more.

So, I currently have 57 units that I self manage in Michigan from California. My tenants are blue collar, and my properties are C+. The tenants are probably more maintanence than A’s, but I wouldn’t call them nasty. I was a tenant at one point and I try to sympathize with their situation while enforcing the lease. Because of this a relationship is formed and most tenants do all they can to fulfill their end of the deal.

Coming back to your question, I am leveraging what I’ve learned with dealing with people and forming a property management company, partly because I don’t think it’s hard work, secondly because I think their is an opportunity to make money, and most importantly because there are a lot of crappy property management companies, both from the perspective of tenant and owner and I hope I can do a better job.

Sorry for the rant, but the property management stigma as being too hard and dirty drives me crazy. If you want to be a successful real estate investor, hard work is part of the deal. 

Good luck, hope I gave you a different perspective and actually added some value and depth to your situation.

Bruce

Hi @Sam Hanaa, I personally love SE MI, but you’re right taxes tend to be high due to historically low housing prices...the city/state still needs their money for past corrrupt officials and whatnot. You’re thinking the right way though. As far as tenant friendly goes, there’s a lot of real crappy landlords that take advantage of hard working people which has given us better landlords a bad name. However, if you get everything in writing and follow all laws laid out in the Michigan Tenant Landlord Guide, https://www.legislature.mi.gov/publications/tenantlandlord.pdf, you should be ok.

Bruce

Hi @Account Closed, when you say you looked in Detroit, did you visit? There is definitely regions of high crime, but also areas without. Similarly there are areas where you can get a house for $100 and others where a condo costs $150k. What I’m trying to say is, you can find all types there and in surrounding sub markets, but it depends on what exactly you’re looking for. So what does “good potential” mean to you and what level of risk can you tolerate?

Hi @Courtney M., welcome to BP! Sounds like your'e getting a lot of good advice. Investment real estate is definitely trendy right now, but its not a get rich quick scheme...more like get richER slowly. Even so, as long as you're persistent and patient, I'm sure you can still reach your goals. 

If you want to chat more about investing in Michigan, let me know, I've made most of the mistakes in the book I'm sure and can help level your expectations with reality.

Bruce

@Emily N. this is a very interesting topic, thanks for posting and congrats on the acquisition to start, taking that step is a major deterrent to most. Now that you’re here, it’s definitely a balancing act of making necessary changes while managing the budget, trying to keep enough of the right tenants while getting rid of those who sour the rest and keeping enough cash flow to make it all happen. 

I’ll be following and see if there is anything I can add, but you’re in uncharted waters compared to my experience level.

Good luck! Oh, where is your property? Maybe that will help to set the level of tenant/property expectation.

Bruce

very valid @Stephanie P.. I think I’ll just try and call a couple more lenders then. I wonder why an agent for the lender would be overly conservative but instead be the opposite to hook the client. Do you know how the agents typically get paid? That might shed some like on their potential lack of motivation. Thanks 

Thanks for the advice @Matt Popilek, do you have a good reference to find Fannie/Freddie lenders? I went to their website and there were only a couple and I grabbed the one that was closest to the property.