All Forum Posts by: John Whittle

 Maybe its his way of raising rents right away.  Can't just be the bed bugs.  Maybe the last manager has a of bunch of riff raff in there and this is his way to get them all out.  

I've heard 10% for vacancy and maintenance each.  You probably have the right idea at 7% in an A+ area for vacancy though.  If the place is old enough to have knob and tube I'd count 10% for maintenance if not a little more.  Other then that looks good to me. I would run the numbers like you are paying for a PM.

What area? A+ and knob and tube is throwing me off.  Mt. Adams?  

If this is your first rental period and you want to get your feet wet.  I'd get a single family house in bridgetown, white oak or an area like that.  If you get in and like rental property.  I have a feeling you'll regret tying up all that cash.

Insurance could be an incident the owner had.  Might be why he's selling.  You can only have 3 claims in 2 years depending on the insurer before rates go sky high.

PM fees should of been 3700 at the gross rents they were getting.  Its usually 10% most of the landlords I work for self manage.  

I think you could do a lot better around here.  I would stay out of A areas for a 6 unit.  I got a guy trying to sell me a duplex on the good/bad price hill border that could make close to $500 a month and I'd only have to put 4k up.

This is horrible advice.  120 volts can kill you.  All it takes is being grounded on one arm shocked on the other.  You get lucky most of the time.  All it takes is that one time the AC cycle is just right with the rhythm of your heart to kill you.  

I'm not saying a DIYer can't change some plugs but electricity is not something to take lightly.

I got $500 with @Ben Leybovich.  Lets rebuild a block in Detroit and turn a $500 house street into a 30k a house street.  

You might even be able to talk me into a road trip/working vacation.

The 2% rule isn't possible in every market. Especially if you want a nice place in a nice area to build equity.   I would say this is best for a beginning investor without much real estate experience.  Especially with your goals.   Just make sure you budget enough for vacancy and maintenance.  The last thing you need is negative cash flow.

 I'd stay away from auctions at first.  Foreclosures would be a good way to get ahead. Only if you have a good contractors you can really trust.  Meaning affordable with plenty of references, license and insurance.  Around here the handyman types generally don't have licenses or insurance.  A lot of them are still good guys and can give you the best deal but it adds a level of risk.  They can still be great just don't use them for major plumbing, wiring, etc. Leave that to a quality licensed pro.  You would have to want to be your own general contractor and possibly do some work yourself..  If you want to be able to hire one guy to do or hire for everything.  It will probably take away the advantage.

I would diversify just like with your retirement.  Maybe get your feet wet with a nice house or two in a nice area. Then you if you think you can handle it.  Get a decent or bad place in a bad to decent area.  That handyman will be important here.  It won't be easy. The bad place in a bad area. Could get you in over your head really fast too. It could also get you some nice cash flow going for that retirement though.  

Just put that extra cashflow in a oh s**t fund.  If the oh s**t never comes use it for the next deal.  Just make sure that fund is in addition to the maintenance, etc. fund.

I still need to check out my local reia, so I can't answer that one.

When you bond neutral to ground at the outlet.  If the neutral breaks the voltage goes thru an appliance but can't go back to the panel.  The ground becomes hot because the neutral upstream of the break is.  Ground is bonded to the metal in appliances.  So guess what has 120volts on it?

I had an apartment where they did this, neutral failed.  I could take my meter to the fridge and faucet and read 120 volts.  

GFCIs on ungrounded circuits are code with the no equipment ground sticker.  Connecting neutral to ground at the outlet is definitely not and is really dangerous.  

The guy who jumped gfcis.  Good one you wasted all that money on gfcis to make them worthless and more dangerous then a 2 prong outlet.  GFCIs work by detecting the current from hot to neutral.  If they detect more current on hot then neutral they switch off.  This is why they don't need an actual ground to work.  By by-passing ground to neutral the gfci will never trip.  Completely useless.

I'd hold out until you can get some cash saved up.  I've been at it for almost 5 years from nothing slowly building my business up. It doesn't get easier. You need to think about getting reserves for your business built up then save for a property.  Find a buy and hold investor to work rent off for.  Then go for a 203k rehab loan.  

That's my plan anyway.  Almost to the first property.

Opps accidentally hit post 

The circuits even out through the other phase like they always do.  Now the neutral can't take away the unbalanced portion.  So like you said they become a 240 series circuit.  Only resistance changes voltage.  So one side goes high the other low. Unless the loads are even between the phases.

You can try this yourself.  Get 2 60 watt and one 75watt incandescent light bulbs.  If you put 2 60 watt in series with 240 you get normal brightness.  If you do one 60 and one 75  one goes dim the other bright. You can check the voltages to the mid point they go high and low from one phase to the other.  Then put a neutral between them and bam its back to normal.