All Forum Posts by: Dave Chapa

@Mark Sewell I have looked further out than 30-40 min, more like 1 to 2 hrs. away.

Comps have been an issue however, I buy to hold so my main focus has been rent per SF and vacancy rates. At first, I was worried about vacancy rates in a small towns, 4,000 +/- population, however, I have found that in some of the markets I have looked have a high demand for rentals than what I would expect.

One thing I have found that helps is finding a local REA that knows the area, they have been instrumental when learning a new market.  

I paid $3300 to level a 1600sf house but that also included rebuilding the framing and floor in the kitchen, laundry room and bathroom.

@Darlington Agu First, how is your contract structured, are they collecting rent or are you? If you are collecting rents, then how are they notified about late payments? We have our PM collect rents, and it’s their responsibility to follow up on late payments. Also, you should negotiate all aspects of the contract. We negotiated an existing contract with a 30% 70% split on late payments, we receive 70%.

Second, you should clean house after buying the property. Out of all my properties I only have one that I retained all the original tenants and that’s because it’s a class B property, and all the tenants were qualified. All the others; my apartment and two houses, were served a 30day notes to vacate. Then renovated and filled with qualified tenants.

When I was looking for a PM and a friend of mine referred his PM to me, He just stated with them to manage is 11 house portfolio. I interviewed and like what I heard, I negotiated their contact and hired them. Since then my friend fired them because off all the “issues he was having”. However, I am still with them and very happy. So, why did the same PM work well for me and not for my friend? Because of communication and real expectations. I’m not saying it was all bliss, it’s been give and take with the PM, there were times I needed to set back and let them do their job and there has been times that I needed to intervene. However, maintaining clear communication and realistic expectations. Now, I hardly get involved unless it something major.

So, my advice is, go back to your PM and have a serious conversation about your expectations as the owner and, be willing to listen to their expectations as the PM before you decide to fire them. Set a clear plan and goal with them on what you are trying to achieve with the property. i.e. renovating, repositioning, cleaning house.

Everything starts with a relationship. Relationships are built with time, the more RE meetups you go to the more people you will meet, like-minded people who also want to grow in real state. Develop the relationships and grow together.

@Moe Soliman send me a PM and I'll send you my PM contact information.

I buy from a company the pre-assembled. All plywood and solid wood and no particle board, at a good price. They can also lay out the design for you with fillers. 

Send me a PM and I'll give you the company info. 

I use Capital Concepts Inc for most of my deals.

@Cody L. So, with that $10m dollar property, if it burnt to the ground, can you rebuild it for $3m? Does it cover loss of income when it's being rebuild? With your portfolio maybe you can take these risks, however, not everyone can.

Insurances is high and will always be part of the equation. If you ever been sued as a landlord/owner, you will gladly pay for insurance and, also an umbrella policy. I wouldn't think of not carrying insurance on any of my properties, even if it paid off. For most small inverters like me, one disaster could kill 1 to 3 years of profits or even put you out of the game entirely.

So, insurance should be tailored to the individual’s portfolio to minimize risk.

@Vijaianand Thirunageswaram I thought the same thing, who wounded want cash? Well, it was a company that also does hard money loans and would not take cash. The whole package looked attractive from the outside however, once you dig in, the numbers didn't work, that is, it didn't work for me.    

I find this thread very interesting. I have looked at several offerings from wholesalers (big box wholesalers) and passed on everyone. The numbers just don't work for me and when you point it out they get defensive. The wholesalers I looked at would not let you pay cash because they also provide the hard money loan and, want you to use them only for the loans. So, no thanks.