All Forum Posts by: Roman Gwin

@Aaron Cullen lol, oh man you should see how bad our property looks right now but the uglier the better as we can hopefully add some value.  I'll take some pictures next time I'm there and start a blog showing what we're doing.  I'm in LA half the time and in Phoenix the other half of my time so if you ever want to grab a coffee in LA I'm open.  

@Shital Thakkar @Rob Terpilowski @Aaron Cullen

My Indy properties are in Far Eastside area of Marion County. I bought them for $45,000 each and the gross rent is $750 per unit. I worked with a guy I met here on BP who brokered those as well as my KC investment. His name is Mike D'arrigo and he owns Pinnacle Properties. Both projects I've done with Mike were incredibly turn key....houses were already occupied and property management teams in place. My experience has been positive so far but that doesn't mean there haven't been challenges...One of the Indy units had an issue out the gate with a tenant that didn't pay and some initial communication issues with the Property Management company. However, Mike stepped in and got involved even thought his party of the deal was done. Indy, unlike LA, was easy to get tenant out quickly and I got a new one within 60 days after doing some work to the house. Based on my experience with the cost, revenue and expenses of Indy and KC I would consider purchasing there again...as for my experience in Dallas area I won't buy there again. I reiterate, this is just from my experience and in no way should my 2 measly properties be an indication of the country's 4th largest Metro. My 3 challenges for me in Dallas are the price of houses vs gross rents, the property taxes and the insurance. If I were to buy my houses at today's prices they would cost about $150,000 and rents are at $1,450. My property taxes are 3x what I pay for comparable values in other markets and my insurance is 3x what I pay for houses valued at twice that amount in Phoenix and LA. Every agent has told me it's because of the weather. Regardless, while Dallas is an awesome city to live and visit, it's just not one where I'll be buying other property.

As for Phoenix returns I have 4 different projects there and they are all pretty different:

1) A 3bedroom townhome that I VRBO when I'm not staying there (side note: the Arizona governor signed a law making it illegal for local municipalities to bar VRBO for homeowners, love that. My HOA bylaws don't mention VRBO and I've had no issues after 18 months with HOA).

2) 2nd property is a SFR we tried to flip a year ago....bought it for $260,000 and put $30,000 into it. Listed for $350,000 with no offers so leased it for $2,000. Swing and a miss....but it was worth a shot and we'll re-list it when current tenants move out, the market is very healthy right now and I'm confident we'll get our money back when we list again.

3) I went in 50/50 with a guy and bought a 16 unit complex in Central Phoenix for $340,000. I was an out of state investor at the time living in LA full time so I gave him General Partner status to 

make decisions on maintenance etc. We have a good working relationship but we differ on "pride of ownership" to a degree. The property is in a C- neighborhood and he keeps the property barely above minimum standards. We have zero problems filling vacancies but he isn't able to keep people very long due to the transitory nature of the tenants he's able to achieve. For my $170,000 investment I'm averaging $2,000 a month Net from him. The money is good but when I drive by the property I will admit to being a little embarrassed that I own half of it. In 3 years our partnership makes a decision to either buy one of us out, agree to maintain as is or list the property. I'll either buy him out or option to sell it. But, I've learned a little bit about the area and have researched a few other properties so I'm now on to Project 4...

4) 4th project is a 19 unit apartment complex we bought in Central Phoenix. We paid $300,000 for the property and are in the process of rehabbing each of the units. 16 units are 1+1, 1 unit is a 2+2 (with a basement of all things) and there are 2 3/2. The building is currently completely vacant and only has a concrete floor, studs and a roof...it's a real s***hole right now and I love it. Our budget is $300,000 to rehab all units both interior and exterior. We've just finished the first unit and came in under our $12,000 budget for labor and materials. This property is not in "Beverly Hills" by any means, it's rough and our tenant pool will be a lot of section 8 type people but it's literally 1 block from the State Capital and other government . Once it's done we'll be all in for around $600,000 with gross rents projected at $13,000 and everything except the subfloor, studs and roof will be brand new.

This post is long enough without getting into actual percentages etc on each project but as you can see they vary...I look at it like my old 401k where I tried different options of risk...some had a better return than others.

@Lance Robinson

Everyone's goals and thresholds for management are different. For some folks having all $2,000,000 tied up in one safe, secure, high demand market like SF makes sense. I have no idea what that house you mention would rent for but I'll take a wild *** guess and say something like $7,000 or $8,000...maybe $10,000? Hell, I don't know, you tell me...but $2,000,000 SFR in LA would be something like that. For someone like my brother who makes well over 6 figures and loves his job at a major bank that is what he'd put his money in. Low maintenance, good A+ tenant, long term appreciation up the ying yang and good old fashion pride of ownership. For me (and I'm the first to admit I don't know half of what I hope to know some day...and I've made and will continue to make mistakes) but for me I would much rather buy a 40 unit Apartment building with gross rental potential of $30,000 or more and deal with the costs of managing it and the expenses associated. When I first started out there was no way in hell I could afford to buy in SF anyway so it was a moot point....$50,000 houses in Indy, KC...$100,000 houses in Dallas...then eventually $300,000-$600,000 projects in Phoenix are where I personally am at. Out of state investing is fine but for me, now that the investment levels are no longer a sort of hobby, I'm sticking with areas close to where I live. I gave up the job I hated (i wasn't as fortunate as my brother is in that regard) and cash flow for me is where I concentrate as that's how I pay for date night!

@Carlos Gonzalez ...congratulations and good luck.  If you ever want to trade war stories or exchange thoughts on vendors or come see the project let me know.  

@lance robinson Everyone's goals and thresholds for management are different. For some folks having all $2,000,000 tied up in one safe, secure, high demand market like SF makes sense. I have no idea what that house you mention would rent for but I'll take a wild *** guess and say something like $7,000 or $8,000...maybe $10,000? Hell, I don't know, you tell me...but $2,000,000 SFR in LA would be something like that. For someone like my brother who makes well over 6 figures and loves his job at a major bank that is what he'd put his money in. Low maintenance, good A+ tenant, long term appreciation up the ying yang and good ole fashion pride of ownership. For me (and I'm the first to admit I don't know half of what I hope to know some day...and I've made and will continue to make mistakes) but for me I would much rather buy a 40 unit Apartment building with gross rental potential $30,000 or more and deal with the costs of managing it and the expenses associated. When I first started out there was no way in hell I could afford to buy in SF anyway so it was a moot point....$50,000 houses in Indy, KC...$100,000 houses in Dallas...then eventually $300,000 projects in Phoenix are where I personally am at. Out of state investing is fine but for me, now that the investment levels are no longer a sort of hobby, I'm sticking with areas close to where I live. I gave up the job I hated (i wasn't as fortunate as my brother is in that regard) and cash flow for me is where I concentrate as that's how I pay for date night!

@aaroncullen @Shitalthakkar @robterpilowski My Indy properties are in Far Eastside area of Marion County.  I bought them for $45,000 each and the gross rent is $750 per unit.   I worked with a guy I met here on BP who brokered those as well as my KC investment.  His name is Mike D'arrigo and he owns Pinnacle Properties.  Both projects I've done with Mike were incredibly turn key....houses were already occupied and property management teams in place.  My experience has been positive so far but that doesn't mean there haven't been challenges...One of the Indy units had an issue out the gate with a tenant that didn't pay and some initial communication issues with the Property Management company.  However, Mike stepped in and got involved even thought his party of the deal was done.  Indy, unlike LA, was easy to get tenant out quickly and I got a new one within 60 days after doing some work to the house.  Based on my experience with the cost, revenue and expenses of Indy and KC I would consider purchasing there again...as for my experience in Dallas area I won't buy there again.  I reiterate, this is just from my experience and in no way should my 2 measly properties be an indication of the country's 4th largest Metro.  My 3 challenges for me in Dallas are the price of houses vs gross rents, the property taxes and the insurance.  If I were to buy my houses at today's prices the would cost about $150,000 and rents are at $1,450. My property taxes are 3x what I pay for comparable values in other markets and my Insurance is 3x what I pay for houses valued at twice that amount in Phoenix and even in LA.  Every agent has told me it's because of the "weather".  Regardless, while Dallas is an awesome city to live and visit, it's just not one where I'll be buying other property.

As for Phoenix returns I have 4 different projects there and they are all pretty different: 

1) A 3bedroom townhome that I VRBO when I'm not staying there (side note: the Arizona governor signed a law making it illegal for local municipalities to bar VRBO for homeowners, love that. My HOA bylaws don't mention VRBO and I've had no issues after 18 months with HOA).

2) 2nd property is a SFR we tried to flip a year ago....bought it for $260,000 and put $30,000 into it. Listed for $350,000 with no offers so leased it for $2,000. Swing and a miss....but it was worth a shot and we'll re-list it when current tenants move out, the market is very healthy right now and I'm confident we'll get our money back when we list again.

3)  I went in 50/50 with a guy and bought a 16 unit complex in Central Phoenix for $340,000.  I was an out of state investor at the time living in LA full time so I gave him General Partner status to make decisions on maintenance etc.  We have a good working relationship but we differ on "pride of ownership" to a degree.  The property is in a C- neighborhood and he keeps the property barely above minimum standards.  We have zero problems filling vacancies but he isn't able to keep people very long due to the transitory nature of the tenants he's able to achieve.  For my $170,000 investment I'm averaging $2,000 a month Net from him.  The money is good but when I drive by the property I will admit to being a little embarrassed that I own half of it.  In 3 years our partnership makes a decision to either buy one of us out, agree to maintain as is or list the property.  I'll either buy him out or option to sell it.  But, I've learned a little bit about the area and have researched a few other properties so I'm now on to Project 4...

4)  4th project is a 19 unit apartment complex we bought in Central Phoenix.  We paid $300,000 for the property and are in the process of rehabbing each of the units.  16 units are 1+1, 1 unit is a 2+2 (with a basement of all things) and there are 2 3/2.   The building is currently completely vacant and only has a concrete floor, studs and a roof...it's a real s***hole right now and I love it.  Our budget is $300,000 to rehab all units both interior and exterior.  We've just finished the first unit and came in under our $12,000 budget for labor and materials.  This property is not in "Beverly Hills" by any means, it's rough and our tenant pool will be a lot of section 8 type people but it's literally 1 block from the State Capital and other government .  Once it's done we'll be all in for around $600,000 with gross rents projected at $13,000 and everything except the subfloor, studs and roof will be brand new.

This post is long enough without getting into actual percentages etc on each project but as you can see they vary...I look at it like my old 401k where I tried different options of risk...some had a better return than others.  

@rohan...I live in LA like you and have a few sfr's here but also in Indianapolis, Kansas City, Dallas (Mansfield) and Phoenix.  I really like the Indy and KC markets because I bought 4 houses for an avg of $50,000 each and they rent for $800....to me, that's like buying 1 property for $200,000 here in the LA market and getting $3,200 in gross rent...it's literally impossible here.  Indy and KC are top 50 markets with stable populations and employment not tied to one or two large employers.  The property taxes are 3x lower than what I pay in Dallas.  And my insurance is also only $40 a month per unit compared with nearly $100 in Dallas.  Adding in the property management fees for an out of state owner and my Dallas experiment ended 6 years ago.... with that being said, those Dallas properties have finally had some appreciation.  For an LA investor I like Phoenix because it's only an hour flight away, and man, the Landlord rules are 100 times better than LA.  

Hi Lauren and Andrew...thanks for reading my post, I have an update on the house/pool situation as it closed last October...after a lot of talks with my folks we decided to keep the pool and repair the cracks, replace the pump, etc.  Of course, like any rehab there were issues we didn't see coming...2 fairly large ones came up:

1)  I was talked into buying a larger pump by my pool guy because the older broken one was too small for a pool our size.  Ok, no big deal, order it right?  Well, the new pump arrives and when they go to connect it, the new pool pump will only run on 220v because it's larger than the older one that ran on standard 110v.  So now bring in the electrician to dig a trench and run new 220v cables from junction box to the pump EXCEPT by now the pool is disgusting because there's no pump clearing out the water... the city actually can charge a penalty for having a "dark" pool due to safety issues of a kid falling in and no being able to see the bottom...so, we had to drain the pool extra cost about $300 or so if I remember. 

2)  So now after draining the pool, putting in the new pump with new wiring and re-filling the pool with thousands of gallons of water that isn't free (not too mention I live in CA with the drought and my conscience is screaming at me about the waste)...we find that the pool is constantly being re-filled by the "auto fill"...somewhere, somehow there's a leak and we're wasting even more water and money...so, I had to call in a leak detection specialist who thankfully found the leak at the filter and not in the actual pool itself...Another $1,500 in unexpected costs.

So, long story short, fixing up the pool cost about the same as removing it, refilling with sod, getting a new fence but now we have a nice updated pool and it should help the value a little bit when we go to sell.

Thanks Blake and Kyle...I heard back from Cozy and they said their revenue model consists of making money from charging for screening reports, collecting 2.75% from tenants who pay with credit/debit cards and the $2.99 per month per unit for quicker deposits.  I'm sold, just sent my first tenant through and plan to transition the rest shortly.  thanks

thank you Kyle!  I actually emailed their customer service to ask how they make any money if this service is free...seems to good to be true.  I sincerely appreciate it.  Roman