All Forum Posts by: Keith N.

Originally posted by @Kirk Hayes:

So y'all suggest really just trying to take the time to find a single person who is a jack-of-all-trades vs. trying to find multiple people who each specialize in a particular area?

Also, how much should I try to budget annually for maintenance repairs to my unit (as % of rent)? Is there a benchmark for that?

There's never going to be a single person who is a jack-of-all trades and is reliable.  In my experience, you'll figure out who your A+ guys are over time by trial and error.  I have one reliable guy for plumbing, one for AC, and one for lawn-care.... Those are the main 3 "things" in my opinion.

Regarding budgeting for maintenance and repairs based on rent... I don't think basing it on % of rent is really reliable at all (But that's how I do it anyways!). I allocate 15% of my rents to Maintenance/Capex/Vacancy and that has seemed to work for me so far. I have certainly not spent 15% rents on these expenses, but once a roof or AC unit breaks it will even out.

@Dan Marshall

Well, I'll assume you mean your "Total Monthly Payment" is $1,830 and their are no other additional fees.

 If I assume your maintenance/capex/vacancy expenses are $250/month (yes, totally arbitrary number), You'd be cash-flowing $415/month without a property manager.  

With a property manager (Assuming you pay them 10% rent) it'd cut your cash flow to $165/month. If you paid $300K+ for the townhome that really is not a great ROI%, but you'd still be cash flowing $165/month from essentially doing nothing.

The option to sell or not is up to you, but if you didn't want to there's always the following options for tapping into equity.

1) Taking out a HELOC

2) Taking out a traditional home equity loan

3) Cash out Re-finance (normally done on free-and-clear properties though I think they can be done as long as you're above 80% LTV)

@Dan Marshall Welcome to BP! We have a pretty active community in Raleigh.

What makes you want to sell your townhome if its cashflowing well?  If you have a good property manager taking care of it and it's not causing you any headache, I'd hold on to it!

Regarding your interest in Multi-Family's in Raleigh, are you interested in acquiring small multi's (2-4 unit) or apartment buildings?  

I painted my first rental off-white.  It looks alright.  My next one I painted "Agreeable Gray" (eggshell) by Sherwin Williams.  I will use the gray in all my future rentals.  Looks excellent.

The thing is, finding wholesale deals is TOUGH. You really have to be a hustler and go out of your way to contact people who own properties (95% of which don't want to sell them). To be good at wholesaling, it seems you have to be okay with potentially getting yelled at, berated, and people just being pissed off at you in general because you contacted them to buy there house. The only house I ever wholesaled, I found by walking up and door knocking. I tried a few more door knocks after that, and some people got VERY MAD at me.

@Ben Kirchner As it looks like everyone else in this thread already said, YES different mortgage companies will have vastly different requirements in my experience.  I've talked to some who have told me "we cannot count any of your rental income until it is on 5 years of tax returns" and I've dealt with others which don't even seem to verify income before handing out a loan.  The most flexible mortgage lenders are usually A) huge nation-wide credit unions (Navy Federal, PENFED, etc.) or B) much smaller local banks.

Hello,

What would be the best way to shield one's investment properties from OUTSIDE liabilities?  For example: Someone decides to sue me because I injured them during a flag football game (this is completely fictitious FYI).

In this scenario, my worry is that someone might try to sue me, realize that I own multiple real estate properties, and try to essentially drain all of my money and force me to sell said properties.

What is the best way to mitigate this? LLC, Trusts, something else. I live in North Carolina if that matters.

@Paul Schackman You are only allowed to use the FHA loan on a primary residence (The rule is you must "intend" on living there for at least one year). You cannot use an FHA loan on a property purchased as an investment which you aren't living in

@Juan Pernas  1) The purpose of every business is to make as much money as possible.  2) There's nothing morally wrong with "offering" someone even $1 for an $80,000 house.  Nobody is forcing the seller to agree to that price.  The seller is agreeing and signing a contract themselves.  

I wouldn't let anyone pay by semester/year. What if you have to evict them 2 months in and you have all their money? Seems like it could cause more issues than if normal monthly payments.