All Forum Posts by: Charles Perkins

This is another aspect of real estate. Deals come in many sizes and flavors.  Small lots with or without a small house to large tracts of land with large structures or multiple structures.  Also besides residential there is commercial and industrial lands and a host of zoning issues.

Each aspect and real estate type has maybe similar, but largely different skill set requirements. 

Like you said, one needs to be able to find deals, know that they have found a deal, have the skills to develop leads and lead sources, be able to negotiate the deal when found, communicate well with others.

Often deals start out as opportunities.  Analytical skills and research skills aid greatly in determining costs, value add opportunities, negotiation points.  Often in smaller deals one needs to be able to determine approximate costs, likely issues, and determine and approximate value quickly while larger projects can be taken more slowly.

There is an element of creativity as well.  A number of investors can look at a property and come up with many different values depending on their vision of what the property will be.  

Thanks for the input.  I hope this can help many investors and be a way of sharing important skills that contribute to success.

There are some that can walk into a house and right away determine how to fix it in such a way as to create, light,space and potentially add value.  Another might walk in and see how color changes, sidewalk appeal or a host of other minor changes make a property attractive.  Some are skilled negotiators able to take most anything and turn a profit.

As investors it is good to know and understand the skill sets one currently has and either develop or get help with those one doesn't have.  

What skill sets and experiences have you drawn from?  When you look at different real estate opportunities, what in your mind makes a good deal?  What differentiates you from another investor?  We are all different due to life experiences, skills we have learned, and our individual strengths and weaknesses.  

Success is often built on doing what we are good at.  Do you know what you bring to the table and how to use it?

 Like any business it is good to assess one's skill sets.  Getting help with and/or developing skills one lacks.  

One thing I have learned over the years is that there is no generic answer to how to invest in real estate or what one should do when getting started.  As individuals we come with our own skills, life experiences, strengths and weaknesses.  Learning how to use what you have and seeking advice and/or help with what you lack.  Learning what you are good at is an important step towards success, not learning this is why some have difficulty.

 It use to be necessary as a DIY landlord to have a set cleaning fee in the lease that could be deducted from the security deposit at move out.  This was necessary for landlords that did their own cleaning which could not be changed. If you hired a cleaner you had a legitimate invoice. Recent legislation has changed the rules for security deposits and a landlord can charge for their necessary work based on going rates.

Here in Washington you are required to have a signed checklist clearly stating move in conditions.  If your checklist clearly described the yard condition and your lease clearly stated it was the tenant responsibility to maintain the yard, you could deduct the cost of cleanup.  It gets gray when you start looking to charge for lawn care or landscape work.  How much is wear and tear?  Basic work might be okay again you want to establish clearly the move-in condition and tenant responsibility.

Pictures are a good way to supplement the checklist before and after move-in.  Without a checklist you will have to return the deposit in full.

As a long time DIY landlord,  I have learned the hard way how to do most any remodeling or repairs on my properties.  My investment approach required fixers with good value add potential.  

My wife and I made plenty of mistakes.  Probably one of the greatest challenges is letting some of the work go to others, today.  While I'm retired my real estate has become nearly a full time job.  Lately I have found some excellent small business contractors that do great work without the high overhead.  

One example I upgraded a 100 amp panel to a 200 amp panel.  I wanted to have someone do it at first.  Twenty years ago they were charging 2,000 to 2,500 for this work.  This was more than I wanted to pay at the time.  So working with an experienced electrician, I purchased for around $500  the materials required and permit.  After maybe 8 hrs of work with a helper, we had the new mast, two ground rods and wiring hooked up.  So today, when contractors tell me bigger numbers for work that I know l can do it is hard to let it go.

It was also a process building a good screening process and staying on top of legal changes that effected leases and other processes.  

Another challenge, was working full time and working properties many hours as well.  After nearly 30 years,  my wife and I are happy to know we can fully retire anytime.  The last 10 years I have been full time working real estate and can take time off when I want to.

There have been many good and bad stories on the way.

I initially setup the ADU on a separate electric sub meter when the ADU was being remodeled. The water and gas sub meters where done later on the lines going to the unit. The easiest way is to plan it from the start of a project.

Our ADU is separately metered for gas, electricity and water. We then take the utility bills determine base rate split and usage rate. Multiply monthly usage by rate. The garbage bill is split is allocated by number of weeks and split in half.

You have given us part of the picture.  It looks like you are an experienced investor that has a good source of income, but numbers by themselves don't answer the primary considerations.

Are you looking to grow income, grow appreciation or perhaps grow tax benefits?  Where are you at in your investment life (a young investor or perhaps an investor reaching retirement age)?  Your investment approach also makes a difference.  

If your goal is to pay down mortgages,  then tackling high interest loans often is best.  It also makes sense to consider the loan balances.  Can you pay off a higher interest/lower balance note first eliminating a payment.

If growth is your goal then it doesn't make sense to pay down any mortgage that is cash flowing unless the local market suggests this might change.