All Forum Posts by: Andrew Lawrence

In what situations would you give an incentive to a tenant to occupy your unit? Some suggestions I've heard were if the market was a little soft to include the first month's rent free to get more applicants, etc.

Another way I've wondered how to apply incentives is through a podcast that described a method of building lasting relationships with nearby big local employers in the hopes that they refer their employees to live at your property. But it didn't go into detail on how you would do that. So my thought was to give a 1st month's rent free for employees of ABC company, but what if the rental market softens and everybody is offering 1st month free, then it wouldn't be much of an incentive anymore. Thoughts or ideas?

Thanks

Any recommendations on a deal funnel page or system where you can put a lead's contact info in and it could separate by the type of lead (ex. foreclosure, divorce, etc.) and give you push notifications or reminders to send out another touch to the lead? I know there are funnel systems that just send an automated text or email to a lead, but are there ones that can do that and also remind you not to forget to send out the next hand written letter or other forms of custom touches?

Thanks

Curious how others handle out of state closings with a self represented seller. Assuming you found the deal yourself, how would you handle it? Do you prefer to negotiate directly with the seller or are there more benefits to negotiating with your agent team member?

Thanks

As the description states, I have a list of questions for BP members as I browsed the internet and BP forums for some of these, and others for opinions of others who have gone through these scenarios. 

1. When giving out draws to contractors (30/30/30/10), how do you determine, based on pictures what percentage of the work is actually complete? As in, the contractor has started his first 1/3 of work, calls/texts you and says he's ready for another draw, sends you pictures of completed work. Coming from someone with minimal construction knowledge or experience, how do you gauge that a project is a certain percentage complete? Ex. I can see the granite countertops are done, but based on the whole project, what percentage does that equate to?

2. I have heard recommendations for "Firing fast" when you recognize a contractor isnt quite working out. How do you have the talk to let them go? Especially if they are in the middle of a project and still have some left from a partial draw?

3. I have heard suggestions to pay a contractor a bonus for completing work early and penalizing for late work. How do you know that they don't abuse the trust between the two of you with this system? Example: they give you a bid and say it should take 4 weeks to complete a job, you get it in writing and promise to pay a 5k bonus if they complete the job in 3 weeks. They follow through. In the second job, they quote 5 weeks, knowing that you're likely to pay another nice bonus for finishing early even though they know they could really complete it in 4 and once again, complete the job in 4 weeks and get the bonus for finishing "early". 

4. How do you determine if a property manager is being forthright and honest? What if they say there's a vacant unit but they secretly rented it out and are pocketing the money from the "empty" rental unit? Best ways to confirm that this isnt happening without having to visit the investment constantly? (Assuming an out of state MFH property) Such as checking utility meters on a separate unit (assuming all units are individually metered)

5. When analysing a real estate market, aside from job & population growth which seem arguably the most important factors, how important is looking at a city's number of new commercial and multifamily construction in a given area (construction/community growth?) and how do you gauge this? I have seen ideas such as looking at the number of permits issued at a city/county permitting office but even they don't seem to have all of the info together to show the bigger picture of how a city is doing in terms of investment activity, best ways to approach this?

Any insights would be greatly appreciated!

Hi,

I recently explained what I wanted to do with a family member about how being a multi-family property landlord would be like and how property management works in the scenario. They brought up the question and basically asked me, "What do you do in the situation where the property manager is claiming some units as vacant, but have secretly rented them out and just pocketing the income from that?". 

So what is the most effective way to make sure your out of state property management company is doing things the right way / above board? Not trying to sound paranoid, but I've been reading horror stories and Id like to be able to assure future investors that everything is running smoothly when taking on a project like that.

I know there's a lot of posts already dating back asking about which markets are good for someone from X state to invest in Y or Z states for good cashflow etc etc. But I am wondering the why behind it. Some posts mention fundamentals of a market or growth vs declining markets. 

How does one look at a market and decide that it fits the 1% (or more) rule to determine which market has some of the highest ROI?

What are some good sites for determining value like this? Population, unemployment rates, potential big companies moving in = more jobs, Rent rates, Etc?

Yes, thanks for your replies I have tried to use the calculator to illustrate what I sort of see. This is my first time playing with this calculator so I apologize if it is done incorrectly. I tried using the BRRR calculator but it doesnt seem to work the way I intended, so the first PDF shows what I think Year 1 should look like if I lived there and occupied one of the units "house hacking". While the second PDF shows Year 2 after I refinance when it has 20% equity and I move out and rent out the 4th remaining unit. I know the first time is going to be painful but I am keeping my hopes up that after the 2nd property this should go more smoothly but it looks good to me, but I would like some opinions, would this be considered a deal for you?

Year 1:

https://www.biggerpockets.com/calculators/shared/173855/64367e94-011d-4d9a-91cd-35177ae6ae6d

Year 2: (Refinance)

https://www.biggerpockets.com/calculators/shared/173855/1fc967ee-18aa-4a33-bf6b-5696e4e4a0d4

I have a couple properties that I am currently looking at in my area and when I went to my lender to get preapproved heres sort of what happened. The lender pre-approved me for a certain amount based on a rent rate estimate being around 1200 per 2/1 unit. The kind of deals I am finding are usually 50k over my preapproved amount, but the rent rates that they listed they are currently renting the units out are typically around 850-950 or 1000ish. The ads usually say something like "Great investment opportunity. Value add opportunity with option to increase rent rate" etc, etc. 

Is it standard practice for sellers to price their properties based on what rent rates COULD be (1200's) as opposed to what they actually are (around 850-950's)? Because I like the properties, but just buying the property I would immediately have to start raising rents to market rent or evict some people if they're unhappy about the sudden dramatic increase in rent. Then theres the conversation I would have to have with my lender explaining that I want to buy a property 10% over the pre-approved amount and how the rent rates arent quite what is expected which I'm not sure if its a problem since part of qualifying for the amount was the rents working to make my DTI ratio work.

Is this a good problem to have?