All Forum Posts by: Chris Harkins

@Micah Copeland

I just used the Gross Rent Multiplier (GRM).

As-Is

100/1.5= 66.67

5,850 x 66.67 = 390,000

----

Completely Occupied

100/1.5 =66.67

8,850 x 66.67 = 590,000

I'd always buy rentals for cashflow, and if you get appreciation great!

@Micah Copeland Did you get a peek on the inside? May want to factor in some costs to update the units if needed. And I agree with @Michael Noto.. not having the 2 bedrooms rented out because she requires 2 months down is a big red flag as to the type of tenants she's expecting to get in there. If she does her screening properly a typical deposit and 1 months rent should do fine.. The only time you start doubling up is when you put questionable credit history/ semi recent evictions in as a hedge against them not paying. 

 Also, have you checked the records to see what she paid for it, and when?

General Rule of thumb to use for SFR, but can be a quick guide for what you're looking at..

1% for A neighborhoods

1.25% for B Neighborhoods

1.5-2% for C Neighborhoods

2+% for D Neighborhoods.

Not sure of the exact location, but I would venture to say you're probably in the C range in Madison and the way she is charging tenants/ vacancies.

As-is with vacancies I would estimate $390,000.

Completely Occupied / No major deferred maintenance $590,000.

I'm curious to see other peoples thoughts on this too..

@Anna Watkins, He's in Nashville. I dealt with him for several years before I moved to Memphis.

@Anna Watkins

 See above

Call Brian Bousselot with ABC Insurance Group.. I know he does some rehabs/ flips himself and should be able to help guide you with what you need.

He's also always been incredibly straight forward with me, and explaining what I need and why, and not padding the policy with extra junk that just drives up cost.

615-646-2117

@Amanda Hoening, once you implement the call ahead strategy it may be at a 1% rate where people don't show now (who call) vs a 40-60%. It is a life saver! 

Doctor said I've got the blood pressure of a 12 year old, so it definitely helps the old ticker if you put it in place! Haha

Definitely best way to get your feet wet.. That's how I started with a SFR. Good luck!

@Pat Martin,

Out of the several years I've been doing this now.. I only had one couple who really complained about someone beating them to the application process. But it ended really well for both us, because I had a similar property less than 5 minutes away that we were just finishing rehabbing so I had them follow me over to it after that showing.

Needless to say they didn't beat around the bush for getting the app filled out and paid for.

Others have been a little let down, but I typically collect the application from them on the spot anyways and tell them I'll call them to get a debit/credit card to process their application if the other falls through..

So we are in the process of renting out a couple houses again and now comes the lovely time of meeting with prospective tenants. I remember the first year of ever renting out homes, I was so nervous about offending someone or putting them off that I bent over backwards to try and accommodate their schedules and make sure they had ample time to see the house without them feeling rushed from someone else coming in to look at the place..  So I would book people in 30 minute segments. Say I'd have a showing at 2pm, 2:30pm, 3pm, and 3:30pm 

Or Better yet a 12p.m.  2:30pm, 3pm, 5p.m  (Same property mind you)

What do you supposed happened a majority of the time? 

A. Applicant - Was Late 

B. Applicant - No Called/ No Showed

C. Applicant - Was on time and everything went smoothly

Well if you've ever rented out properties, you'll know the majority is probably A & B.

After getting sick and tired of this nonsense, I threw the tenants "feelings" out the window and took my own time and effort into consideration and started booking people at the EXACT same time.

So now instead of a 4 hours gap where you are bouncing in out of the house waiting on people to show up, you are there for maybe 30-45 minutes. You also have half a dozen people looking at the property simultaneously, creating urgency for them to hurry up and get an application in and their fee paid, since we operate on a first come first serve basis.

The other rule I started implementing was that the TENANT/APPLICANT(s) must CALL ME 1 hour before the appointment, otherwise I WOULD NOT be at the property.

I was AMAZED by the results.. Not only did I no longer have any no call no shows (because let's face it, I actually don't go to the property if they don't call) but I started getting multiple applications the very first time I showed the property, because of the perceived urgency of others looking at the exact same time..  Talk about a complete game changer!

So the 2 takeaways!

1. Book People at the exact same time. (Create a sense of Urgency.)

2. Require that the tenant(s) call you an hour before the appointment (So you don't waste your time driving across town for a no show.)

Any other tips/ tricks you've found over your years??

@Chris A., thanks for the thorough breakdown.