All Forum Posts by: Bryan Reid

 This was pretty much my take too.

I'd be very surprised if he is actually able to consistently put people in a $30K house for close to $1K a month, as is his plan.  I just have my doubts as to whether that will really pan out.  (My guess is that no-one who can afford a $1K rent payment is going to choose to move into a $30K house.)

But if it really is true that the 'mentor' has been doing lots of these... well... all I can say is I'm not sure that is a model I would be comfortable emulating.

Just curious if there are still any lenders out there (community banks, etc) that permit partial seller financing?  Is this totally a thing of the past?

I have plenty of cash to put down the 25%-30% for several deals of the size I typically invest in (SFR in the $90K-$130K range), but would be interested in a larger deal if it passed underwriting.

A local investor is selling a group of turnkey SFR rentals. If I could purchase say 10 for $100K each ($1M total), putting 15% down and having seller carry 10%-15%, the cash flow would work very nicely. Just not sure if that is something that would ever fly with any banks in the current lending environment.

I'm assuming a conventional mortgage is out... was considering a commercial (blanket/portfolio) loan since I'd be buying a group of SFRs.

Playing devils advocate to my statement above: there is a good point to be made for making sure you're not TOO far below market.  If nothing else, it limits your exit strategies if you ever find you need to sell... another investor will not be interested if rent is well below market, and it would be a much harder sell to raise a tenant's rent by a huge chunk to catch up with market if you've gone many years with no increase.

I just know that so far, what I've done (keeping rent level when I find good tenants) has worked for me.

Probably the optimal strategy is somewhere in the middle...

I have a simple formula I apply to calculate the percentage a rent increase should be on a unit.

First, look on craigslist/zillow for other advertised rentals similar to and nearby yours. Take the average of what you find to determine approximate FMR. Then, take your FMR figure, throw it away, and use the formula below:

New Rent = Current Rent x H

where the variable 'H' = 1.0 + the headache factor for that tenant.

In all seriousness: I believe the #1 most successful rule for managing rental property is to find amazing tenants and then keeping those tenants as happy, long-term tenants for as long as possible.

I bought my first property nearly 10 years ago now.  Have 3 units.  I have only ever had one tenant leave in those 10 years, and that is because he was military and was transferred.

I have never raised the rent on any of my tenants because they are all taking care of their homes, paying reliably, and never cause me undue 'headaches'.  And I've no doubt each of them will recommend me to their friends/family as a good landlord when I buy my next property - word of mouth is the most cost-effective marketing strategy there is.

Could I probably be grossing another $50-$100 now per unit?  Maybe.  But how much have I saved over the past 10 years in avoiding vacancies/tenant screenings/repairs/etc just by keeping the great tenants I have now?

$975/mo sounds like a great return on your $31K.  Are you really finding tenants paying that much for a $30K 2/1 house?  How much of that $975 is rent, and how much is applied to the tenant's equity?

In the market I'm in (Lexington, KY), a 2/1 would be very hard pressed to bring $975 unless it was very nice inside and in a very desirable part of town. Around here, I have to search hard to find deals where the monthly Gross Rent Multiplier is under 100. Is it really typical in VB to find properties with GRM of 30?