All Forum Posts by: David Wilson

Curious about mistakes you've made and what you learned. Mine as follows:

My first investment was in a really rough area but penciled out well. My realtor convinced me I'd rarely even see the property because we'd hire a manager to deal with it.  All section 8.

Gross rents from this 4plex were 2,900 a month. Anxiously awaiting the first check from my manager, and it was 1300.  What? Expenses, blah blah.

This went on for a couple months. . Manager charged me for a new kitchen floor. $550. Never thinking I'd check because I was afraid of getting shot, I went there, started knocking on doors and introduced myself to the residents.

The floor was never done, and I was overcharged on what was done because I didn't know how much things should cost.

I fired him, developed a good relationship with my tenants and learned my numbers. Exact cost of carpet, flooring, water heaters, HVAC.

My ignorance of costs, reliance on a manager, and hesitancy to interact w my  tenants cost me.  

I never let that happen again.

Would you be negative each month if you rented it? If so, how much, and how long would you be willing to carry it? Would you ever move back or would it always  be a rental?  Is your market appreciating and is the area seeing population growth?Will it need a roof, HVAC etc soon?  Some things maybe to consider. If the conditions are right, hold on to it. I would avoid any wrap.

My experience w lenders is they count 50% of your rental income.  Good luck!

You're correct. You will either have to drive a few hours or fly out of state. So CA is not attractive for multi family properties that cash flow. Don't get lured into overpaying.  Have you looked at San Bernardino or Bakersfield? Crunch the numbers first. If they work, then go see the property. Ugly properties in non-desirable areas, yet w steady rent history can have a lot up upside.

My experience w seller financing is they want a higher rate than a traditional lender, and they want more income than int only, so you'll need an amortized payment. In exchange, you may be able to get away w less down. They also like to see some principal reduction.  In my case, a retiree who wanted monthly income bc interest on CDs  was so low. Also for tax reasons.  Why would your non- mortgage expenses be almost 1k on a 150k property? Seems high, but maybe I'm missing something.