All Forum Posts by: Daniel A.

Hello Ricky,

In regard to what is considered "abandoned property," you want to make sure you follow the law. So far as I understand, with New York, so long as you give the tenants reasonable notice and they have not come back for it, then you are free to dispose of it. "Reasonable notice" entails, usually, at least 30 days.

I applaud you for reaching out to them and giving them every chance to reclaim their property. At this point, you have offered them the option of having their stuff moved out, but it seems like they're in no hurry to "be present" for that process. What I would say your next step should be is you reaching out to them again and telling them that under the law you have given them adequate notice and that you now have the right to dispose of their property and that you will be doing so unless they come get the property. You own a rental unit, not a free storage unit.

Just make sure that you document all communications with the tenants. The courts will not take your side if you tell them that you talked to them on the phone. There is no proof. Send them written letters. Make copies of these letters. Make sure they are dated and that they are sent via certified mail. Remember, the court will consider the "reasonable notice" period starting from the first documented letter you send to them. They won't backdate anything based on your previous contact if it isn't written down.

Also remember that you are liable for their property while it's in your possession. If any of it gets damaged or destroyed because you try to discard it, then you can be held liable for gross negligence.

Keep in mind that I just did a quick Google search and that is what I found. I would recommend that you consult an attorney before you start disposing of their property.

Hello Blake,

Do you have the numbers that yielded those calculations? Is there any way you can provide more details? Such as, is this a property you bought that you plan to rehab? Or is it turn-key? Is it in a good neighborhood, or a not-so-good neighborhood? Usually when you have great profit margins, such as those that you outlined, it means the value of the property is low, which usually indicates that it's in an unfavorable part of town.

There are of course always exceptions, but we can't really give you a position on whether it's a good or a bad investment based on what you've provided thus far. It could be a run down trailer sitting on a swampy lot 15 miles from town, and someone believes it could rent for $850 a month.

Let us know the purchase price, the expected rent price, comps of surrounding areas, the size of the house, how many beds, baths, you know, all the juicy stuff.

Hello Jayce,

I would recommend Buy It, Rent It, Profit! by Bryan M. Chavis.

That book provides a unique perspective and there isn't as much fluff as there is outlines and procedures.

Hello Dane,

I have always felt that long term rentals were more beneficial to the investor. You lessen the opportunity for vacancies. But I do not own an apartment with 26 units, so I could not speak to a larger scale operation. 

My simple thought process would be that, if you're dealing with a higher number of vacancies, you should offer an assortment of leasing options. You don't want to detract someone who may want a 6 month rental by offering weekly or monthly options. And vice versa. But it largely depends on how you have your business set up. You can likely charge more for the short term rentals, but do they stay rented, and do you deal with more vacancy? Sometimes those vacancies consume the profit you made on the short term rental.

As to making the choice based upon the market, it's tough to say. There will always be a market for rental properties. People can't always afford to get a mortgage. Even during these tough times, there will be people with jobs and there will be people who need housing. A lot of people are not risking moving because of the fear of the unknown. With all the different information (true and misleading alike), people are burdened with misconceptions about newly implemented policies and what have you. 

You offer the community a housing solution. Have you always done short term options? If yes, what is the reason for that? Have you had success with doing weekly rentals? Are you in an area where you have a lot of nomadic travelers who want something a little more homey than a hotel?

To end, I will simply reiterate: When you're dealing with larger vacancies, sometimes it's best to broaden your options. It is hard to determine what the market will want when we are going through such uncertain times. When you get new tenant applications, ask them what they're looking for in a rental. Send out surveys online asking people what they want. Reach out to the community and see what they're in the market for.

I wish you the best of luck and I hope that you get those vacancies filled.

Hello George,

I want to start by congratulating you on making the decision to get things going. It sounds like you're taking the appropriate steps in figuring out what works best for you.

As to moving to the place where you want to invest, I can speak from experience. I used to live in Portland, OR, and have recently moved down to Texas. For me, I felt that I could get more bang for my buck. But I really would love to move back to Portland at some point. I love the city, it's just that the prices are very high in Portland.

My suggestions are as follows: If you're serious about getting into real estate and you're just starting out, I think it's best that you live where your initial investments are. It provides you more oversight and you get to see the day to day operations first hand. Once you learn what real estate fully encompasses, from buying a property to managing it, then you'll know what you need to look for when doing long distance investing. There are books out there that tell you everything you need to know about long distance investing, but really, nothing quite cracks up to first hand experience.

I will also say that if you retain any reservations about up and moving, just take the leap. Being in a new environment (i.e., moving from California to Portland, for instance) will bring about a different mindset. When I lived in Portland, I took things slow. I was in no hurry. But as soon as I moved to Texas and saw my property and saw what needed to get done in order for me to start renting it out, I quickly slipped into the mindset of getting sh** done. 

I also espouse the belief that if you move for a valid reason such as real estate, you will not feel that you made the wrong choice. You are working on your future. You have your dreams. You have your goals. You won't know many people, so you're starting from the ground up. That gives you the ability to create systems that work for you. Why? Because you're actively doing these things.

When I moved to Texas, I knew one person down there. Other than that, I had to figure out who at the county to call to get inspections. I had to weed through contractors. I had to learn where Lowes was. But all of that has created such a robust mental image for me of what needs to be done on a property. (That is, of course, if you plan on doing some rehab work.) Even if you aren't doing rehab work, learning the "lay of the land" will enhance your knowledge and understanding in such a way that you can take that knowledge anywhere with you.

I wish you the best of luck in whatever decision you make, and remember: This is your future. As long as you're proactively pursuing it, as long as you're proactively continuing your education, you will find that the answers come easier and easier.

Hello Brandon,

It's a shame that you are dealing with this problem. I am sure there are many remedies to this problem other than cutting down the tree. I don't know the particulars of your property, but would erecting a fence do the trick? Does he (or she) only come during the darker hours? If so, consider installing some floodlights. Some homeless people are shameless and simply do not care. I would half recommend to ask for the police to stop by, but again, sometimes even a trespass warning won't really drive the point home.

You might even consider installing cameras and posting security system sings. One suggestion I had heard of was to plant thorny shrubbery.

Homeless people tend to go where they feel that others aren't. You might suggest to your tenants to make a visible presence in the areas he frequents for a week or two. You'll also want to keep the area as clean as possible, taking into consider the Broken Windows Theory.

Whatever route you choose, I hope that it works out for you. Best of luck.

Hello Erin,

I just wanted to reach out and congratulate you on the buy. It looks like a great duplex and I can imagine it will be a beautiful property once you get it renovated. Keep us updated on how the rehab goes. I'd love to see some before-and-after pictures, as I am sure others will too.

Hello Jose,

Wouldn't it be nice if all costs were as cut and dry as what you see in the supermarket? Unfortunately, when it comes to rehabbing a house, costs are as far from cut and dry as you can get. Yes, the materials are relatively straightforward. If you need to carpet 250 square feet, you can easily get some solid numbers. But when you delve into hiring a company that specializes in a particular area (i.e., roofs), the costs vary from contractor to contractor. One contractor will quote you $12,000 while the next will say it's going to be  at least $26,000.

The best way to go about learning how to estimate such costs is to have multiple contractors come out and give you bids. Having multiple contractors provides you a general range of what it might cost. While the contractor is there, that's when you start asking them what goes into the estimate and how they came to that number. Most contractors will gladly explain what they feel needs to be done. When you have two or three contractors who explain their process, you can generally deduce what absolutely needs to be done, and what each contractor does on top of or below that. 

I, for instance, had one a/c guy quote me $7,000 for a job. I asked what needed to be done and he kind of skirted around the question. "Oh ... the units aren't up to code, and the vents should be moved away from the windows." I then asked if the new units were included in his estimate. He provided a response that did not answer my question. I then asked how much the new, code-appeasing units were. He again skirted the question. The second a/c guy that came in quoted $2,600. He walked me through the property and showed me precisely what he would do and explained how his estimate came to fruition. He explained that the current units were brand new, they just hadn't been used since they were installed and that the code inspectors were not going to worry about it. They just needed to be connected. This guy had been in the a/c business for 20+ years.

The best way to learn how estimates come into play is to get out there, talk to professionals, and ask them questions. Most of them will give you a summary of what needs to be done, but you can always ask them to walk you through their process. I do this with everyone I hire. I have learned how to install P-traps, how to wire breaker boxes, and how to re-run ductwork. 

Learning how to do these things also clues you in to when a contractor is saying you need unnecessary work. If they say you need X, ask why, then verify. I don't like calling out contractors on the spot because maybe they know something I don't. If they say something that I don't agree with, I generally nod, then look into it. For instance, I had a contractor bring out a plumber. He wasn't licensed but my contractor was getting annoyed waiting for a licensed company to get out there and assured me this unlicensed plumber knew what he was doing. I told him I would pay a small deposit, the remainder contingent on a licensed company giving it a thumbs up. This plumber came in and installed washer and dryer outlets and moved the main lines for the water heaters. He used SharkBite connectors instead of brass connectors, and he didn't put in P-traps on the washer connections. Three separate licensed plumbers came out, and each one said that nothing was done right. One of them even started laughing upon seeing the work. When I told my contractor that I would not be paying him, he went off on a rant about how it's easy for one man to judge another man's work when really all it boils down to is preference; just because he did it a different way from how they would have done it doesn't mean it's wrong; and he went on to say that those licensed plumbers just wanted money. When I spoke to the licensed plumbers, they told me that they don't use the SharkBite connectors behind the walls, like the unlicensed plumber was trying to do, and that they generally only use them for temporary applications. The O-ring isn't meant for permanent applications.

The reason I detail that story is to show you that there are a lot of factors that go into estimating a cost of anything in particular. Labor costs rack up faster than the supplies. The size and the complexity also matter. A roof on a small cottage is going to be a lot cheaper than the roof on a two story Victorian. Same with plumbing and electricity.

Once you start asking questions, you start to learn what to look for. When you view a property you want to buy, you'll have a baseline. Well, I know that with this last place, which is largely similar, the plumbing cost X, so that's a starting point. So on and so forth.

You would also do well to read up on J. Scott's  The Book on Estimating Rehab Costs. 

Sorry for the long rant. Oftentimes I prefer to overexplain rather than give you a quick two lines about learning and reading.

Hello Joo,

This COVID-19 pandemic has caused a lot of concern amongst the real estate world. But the thing about it, many people are intrinsically wired to prefer a certain type of living arrangement. While some people will allow fear to guide them, most will continue on living in the midst of a dense city. And if ten people move out of the city, thirty people will vie to move in. I doubt that this virus will cause city rentals to dip to a point of concern for investors. 

And even if it does, I believe it will only be a momentary blip. Cities offer so much in the way of jobs and entertainment, and a lot of people aren't willing to add to their travel times, especially if they don't have a car. Then you must consider what the landscape will be once a vaccine becomes available. Cities are still prospering in light of the flu, rubella and tuberculosis. We have vaccines and we are not concerned with them. Eventually COVID-19 will fall among those.

That is looking at the house rental front. I cannot speak to commercial real estate.

Hello Andrew,

I'll toss out some quick advice. If you have the money, update whatever CapEx items that you can. That way you won't have to worry about them for some time to come. Your tenants will love that you have new and updated items. If you have a tenant that moves in and a year later you have to bring a team in to fix the boiler, then that's an inconvenience for your tenant. If it's vacant now, take care of anything that you think will cause you problems within, say, 5 years.

As to the particular type of anything in particular, allude to local standards. I have properties in Texas and the codes vary wildly from those up north. In Texas, our codes are geared toward efficiency in hot weather, because that's what we deal with. We don't need to worry about pipes freezing, but we do need to worry about hurricanes and rain.

I wish you the best of luck.