All Forum Posts by: Carini Rochester

I self-manage. I think getting a PM is the next step to allow me to grow. But I haven't begun that process yet.

I have a single family in Greece, NY. I've owned it nine years. I have found that careful tenant screening is critical. My current tenant hardly ever calls about any problems. Repairs and maintenance costs have been pretty low. Depending on your current financing and monthly payments, you might get this to cash flow once you get it repaired and get a better tenant in the house. It sounds like your property manager isn't doing his job. My house was appraised nine years ago at $95,000. Now Zillow estimates the value at $210,000, so Greece houses have appreciated nicely in the past three to four years. Double check market rents. Consider the fact that these areas are appreciating nicely. You'll probably do well whether you sell at the appreciated value, or hold on to it and get a better tenant at current market rent.

I think crime data is key. All the other economic and "do you feel safe" criteria seem intricately linked to crime. Here's a link for Rochester Crime Map.

Rochester Crime Map

good luck. I've got a guy who can paint, do yard work and cleaning. Plumbing and electrician are licensed skilled trades. I've never found a handyman who could do those.

The flippers in my area who are most successful are also very experienced. Some are contractors, some are real estate agents, some are investors. But, they all started inexperienced. See if you can find a contractor who will show you around their current project. Get to know people in the various trades (plumbers, electricians, carpenters, painters, siding installers.) Start with one that only needs some cosmetic fixes (minimal drywall, paint, flooring) and see how you do. Probably don't start with a complete gut. 

The sales pitch may not be true (gasp.) Maybe their guess at what the market value is is actually what the market value could potentially be if someone (the next owner) does the hard work of getting the rents up to that value. That hard work includes making the investments that the current owner hasn't made (nicer kitchens, new flooring, fresh coat of paint, etc.), removing tenants and marketing to new tenants. Raising the rents will not be as easy as merely sending out notices of rent increases. If it were that easy the last owner would have done it. Don't pay the current owner (higher purchase price) for the work he/she didn't do. You do the work and reap the rewards.

I think Gino's assessment is right on. Sell this one and keep the cash on hand (after taxes (Ouch!)) to be ready for the next opportunity. My small 4 unit office building has been much harder to rent out than my residential units. Working from home has negatively impacted the commercial real estate space in my market.

In my (one time) experience with section 8 I put my emphasis on my perception of the applicant's personality, work ethic and credit score. I disagree with J Bock in that the payment won't change significantly unless their income changes significantly. And if that happens, they will be able to afford their new share of the rent. $950 income for the entire month seems quite low and probably justifies your concern. However, find out their story. Are they likely to get more hours or are they looking for another job? What's included in the rent? Will tenant still have to be responsible for utilities? My section 8 tenant qualified for a mortgage 3 years later and bought the house from me.

Quote from @Paul Cijunelis:

Thanks Paul! Yes I have done one cash-out refinance and it worked well. I currently own some properties I don't want. Wrong part of town. One is a four unit office use in a 200 year old house. The offices are difficult to rent and the building is . . . old. So I feel like I could redeploy the equity on better properties. Excellent point that you make!

I use DSCR more than conventional. The banker I use has gotten to know me. At my last closing he told me how easy it was to approve me. (Really, to approve the deal. Plenty of rent money to cover the PITI.) I have been getting loans that change interest rate every 5 years. All my rates will (I predict) go up at the 5 yr date. That's bad. Or is it? This will incentivize me to sell and buy a better, more expensive property (1031 exchange.) In round numbers, I bought a property for a little under 300k a few years ago. 60k down payment, 240k financed. After five yrs., my equity will be my down payment + mortgage paydown + appreciation, say, 60k + 45k + 75k = 180k. There will be realtor's fees and closing costs. I could take 150k and use it as a down payment on a 700k property. Sure, I could sell and scale up even if I had financed with a conventional, fixed rate mortgage. But I find the pressure to do so at about the five year mark helpful.