All Forum Posts by: David Vaughn

Has anyone used crowd funding or perhaps a private equity reit to fund a deal in the 2 million dollar range and if so how did you set it up and make it attractive to investors while keeping it profitable on the back end to actually run and maintain the property correctly? 

 So far every time I have taken lump sum payments be it a few months up to several months the same result has happened. At the end  of the period I get no more rent. Generally this happens when a person that normally doesn't have any money comes into an inheritance or maybe a lottery winning or proceeds from a lawsuit or something similar. Once the money is gone, and it goes quick they are not adept at managing day to day finance. JMO and how it's worked out for me.

Find you a few good wholesalers that aren't shady and you will get all the deals you want. Many times, at least in my area the homes on auction.com go for more than they could have brought on the mls when you count condition. JMO

My honest opinion is I prefer to manage my own. Every time I have decided to do a property manager I have quickly regretted it. I have about 55 doors I'm looking after and run a full time construction company as well as a landlord website so I can assure you I don't do it because I have free time laying around But i do have much more of a handle on what's going on in my property. I have also learned that If i have a property manager now not only and I trying to avoid getting take advantage of by the tenants but in many cases the property manager as well.

My personal opinion has always been a resounding No. My reasoning has been from my experience, and I've worked with or negotiated with every property manager in my city, is now I not only have to worry about my tenants taking advantage of me but now the property management company as well. 

Example of how this happens in reality yet looks good on paper. So property management company charges you a "finding qualified tenant" fee typically 1st months rent. So you get the rent and deposit up front but technically the rental company got a portion of that. Now each payment going forward they get 10% or so on average of the rent. So a typically 1000 rental you are paying 100 off the top to the manager.  Make no mistake they are going to get a portion of the deposit at the end as well. I assure you it's going to happen. Also this " qualified tenant fee" scratch that crap. They advertise on FB and craigslist as well as newspapers just like us common folk.

Now they play contractor. I know this happens because I see it. A tenant makes a bogus complaint. Happens all the time. However you are now paying somewhere in the neighborhood of 35.00 per hour for a "professional" to view the complaint and process the work order. The so called professional is the 12 dollar an hour maintenance guy the management company has on staff for exactly such occasions and they manage to keep him busy.  It's good you met him. This is also the guy that's coming back to  your place to clean up behind the tenants and you will be billed again for his time of cleaning, again, 35 ish per hour for cleaning. 

My opinion, you're in the rental business. Suck it up and manage it. Sometimes it sucks. Sometimes it's cumbersome. Sometimes it's beyond cumbersome. Do it any way. And take the money you were going to waste on a PM and spend it on yourself and your family, the reason you started doing this sideline in the first place.

If I had solid reliable tenants there already I wouldn't rock the boat. 

Bruce I havn't seen to many with good credit personally, i guess good being a relative term. So i've never ran an ap and had a tenant come back over 800. Very few over 700. Snapshot in terms of say, divorce, plant closing in a single industry area of the nation, or major medical issue. All of which I have rented to remnants of in the past with both favorable and unfavorable results. One thing that seems to be a good constant in my selection process is I will not rent to someone with a violent criminal history. I do look at job history and I make them give me a very detailed list of where they have been living. I also am working on the website the underground landlord to help us warn one another about the really bad ones. 

Diane i've been at this game for over 20 years. What I have learned for the most part is 90% of my tenants have been ok until their situation changes. Then it tends to go downhill. I guess someone with a higher credit score might care a little more about hurting themselves credit wise but in the rental side i've never seen that so much. What i have noticed as just in most other businesses the customers that are more stable and reasonable tend to be the most relyable and easier to deal with. There isn't one total magic combination to picking the best tenants. We have processes and minimum standards and still at the end of the day there is some luck involved. 

I wouldn't do it. I have never had luck with someone paying a large sum up front and so much so I now refuse every time. JMO

Bruce that's fair. I"m just saying in the rental business theres going to be some give and take. Most with great credit scores wouldn't be renting