All Forum Posts by: Paul C.

Can anyone recommend a good plumber in Scottsdale?  I'm trying to find a reputable smaller company and avoid the "Roto Rooter" type shops and their extortionate prices.

Thanks!

Sarah Albert cool, sounds like you’ve thought things through. The 17k was from 1k/month from personal savings and 4,800 from 400 a month for 12 months. Again, that’s assuming everything went right the first year.

Congratulations to you and your fiancé on taking the initiative to invest in real estate! Your reserves do seem a little light and may cause undue stress. What will you do if a tenant vacates right away? A turnover could easily cost a couple of thousand dollars, plus you won’t be collecting rent for a month or so. Other unexpected repairs could add to that. On the other hand, everything may be smooth sailing and you’ll have 17k of reserves in a year and growing. I would suggest you do some contingency planning. Suppose the worst case scenario transpires, can you borrow from a 401k or credit card at a reasonable interest rate, sell some stock, etc.? As long as you have options and are prepared to use them, you’re probably okay. Also, this wasn’t part of your question, but how do current rents compare to market rates? If below market, that’s some extra tailwind that can help you as tenants either vacate or leases renew. If it’s at market, just be cautious as any dip in the market could prolong vacancies or require you to reduce rents and 400/month of free cash flow could quickly become less. The fact that you’re asking about being over leveraged is great. You’re on the right path!

I don't like to volunteer anything, but if asked, I will usually answer openly.

What I find awkward is that when people hear you invest in real estate, they'll usually ask how many properties do you have.  It's a little odd because you would never ask someone how much they have in the bank, but for some reason, asking how many properties you own is acceptable.  Then after you answer that, they ask, so did you get mortgages for them?  If you didn't, then you basically just told them how much equity you have in real estate.

I can share my experience both as a landlord and as a tenant.  As a landlord, we had a tenant that just retired and wanted to pay us a full year in advance.  That was great, but she couldn't pay rent when the year was up and ended up being evicted.

As a tenant, I've paid my landlord a year in advance 5 years running now.  The reason I did it was the discount he offered easily beat the 1% I would've gotten in the bank.

So I guess at the end of the day, it depends on the tenant's motivation for paying in advance.  If it's because they ran into an unexpected windfall, then you might want to look for other factors that show they'll be financially responsible enough to pay rent when the first year is up.  If they're doing it because they're financially savvy and want to save a little money (assuming you offer a concession for upfront rent), that's probably a safer bet.

Thanks @Andrew Michael.  Any idea whether it's possible to cross-collateralize properties from more than one state?

@Antoine Martel I wish I could find the post to review the details, but it definitely wasn't seller financing.

@Tom S. just confirmed it's possible.  Thanks, Tom.

I read a post recently where an investor mentioned they were able to get 100% financing on a multifamily apartment complex by pledging paid off property for the loan.  I didn't give it much thought at the time, but am now more interested in the idea and just can't find the post anymore.

Does anyone know what I'm talking about?  Thanks!

Congratulations @Andrew Michael.  That's inspiring.

Hi @Cristy George, I went through a similar process earlier this year trying to find an insurance company that would properly insure my vacation rental.  Most of the typical home insurance companies (State Farm, All State, etc.) did not provide adequate coverage for a vacation rental business.  I found that agents sometimes did not realize this, but upon insisting that they get confirmation, would come back and say they could not cover vacation rentals.

Bottom line is I went with Proper Insurance and now use them for three properties.  CBIZ offers a similar product, but I found their prices were not as competitive.  I would recommend giving Proper Insurance a call, they were very good about explaining their product and why it was the appropriate policy for a vacation rental.

Hope that helps.