All Forum Posts by: Doug Matthews

We started with a property manager and now We manage our own properties (17 mixed doors). Our first property manager we thought was slow and unresponsive so we moved to another. We moved out of state and had a tenant move out unexpectedly taking many items including our water heater and the copper out of our ac unit. The pm let us know what the damage was going to be, but while getting ready to resolve the issue I received a call from a neighbor of the house (always pays to know your neighbors). He was asking if we were renovating. When I asked why and he said because he saw our pm moving our water heater, stove etc out and figured we were updating....

I wanted to share our experience because a) i suggest you plan to manage your pm and b) a pm doesn’t make it “purely passive” as some people think.

We are now at (past) the stage we need to decide if we hire employees or go with a “professional” We just struggle to find a good one that we can trust.

Natalie Kolodij thank you for the response. I will try that before I let the VFD burn it, but smore's sound good :).

Matthew Paul excellent idea. I will explore that! All others welcome.

I have a contract on a property in Hiawassee, GA on a lot with a double wide mobile home on it. My intent is to clear the lot and build a new home. My question for the MH experts is - how do I get rid of the mobile home? Any help is appreciated.

Joe Fernandez I would definitely let the tenants stay until at least next year. Leading in November - January can be difficult. Also, if you find they pay on time and are good tenants(imperative), then perhaps you explain the work you intend to do and see if they are interested in paying a higher rent. Considering vacancy, marketing and placement costs you can offer them a lower than market rate rent on the improved property and still cash flow positive versus the alternative. I've had some tenants stay and pay, others move. They typically would have to pay to move, come up with more money for the new place and endure a move. Again they need to be GOOD tenants to do this. Could be a win - win.

@Julie Kern the pictures look great and seems like a great job on the rehab.  I would be interested in your antIcipated COCROI on these.  

Ramin Yesharim to answer your question about what I am doing to position, I've begun to maintain a full cash position in half of my more recent acquisitions, while over leveraging some of my older ones to build a war chest. This should position me to weather a pull back in my own holdings if it affects rentals like the last one did, and allow me to go on a buying spree should we see a valuation pullback. I'm also planning to be much stricter on my analysis and requirements than I was the last couple of years as the appreciation curve has to flatten sometime (if not reverse). To be honest, the last couple of years have been pretty easy on some investors. Many in my area have bought homes expecting X rent or arv, and by the time we finished a 60-90 day Reno / Rehab, the rent/ arv had gone up, often substantially. (Ever watch an episode of Flip or Flop). I don't know how much longer that continues.

Eric Bilderback it seems everyone is looking for that pullback doesn't it. Bull markets go through phases and typically end immediately following a period of EXTREME irrational exuberance. We haven't seen that in the stock market or real estate yet although there is more evidence in real estate than the SM as most "good deals" I see don't last long and are highly competitive. Probably like you, I am finding it harder to find deals that I am "comfortable" with. For example my most recent acquisition was 105k with 10k in repairs and arv of 135k. Rent is 1195/month.... Looks ok right? Well yes, but 3-4 years ago this home would have been lucky to sell for 35k and rent for 600. So historical prices have created a bias for me against these deals as I plan to hold long term and I am concerned about the next crash, but the market continues to snap back... The properties still cash flow today, but will they continue to is the question no one wants to ask...

@Alan Jones, @David Faulkner beat me to it.  Personally I would take the 30. Then pay it as I saw fit to shorten the note.  Typically I do all 30's, but take a portion of my extra cash flow and pay extra on a single mortgage to pay it off early.  The flexibility of doing the 30 is more valuable to me than the automation of the 10.  Combine that with the time value of money, potential of inflation (?maybe someday), and 30 is the best way.  No real advantage to the 10 year beyond a slightly reduced rate (overcome IMO by TV), and automation.  

Jana,  I would search Zillow for local rentals and observe the rates with and without garages.  I own properties with and without garages. As someone who would never live in a home without a garage, I expected to have difficulty renting my carport units.....    Nope!    Kitchens, bathrooms, and master bedrooms are generally more important.   Now if the garage less property is in an area where everyone has a garage or bad weather risk is high, then that could be an issue, but if those aren't affecting your property then you should be good to just focus on which gives the better cap rate.   IMO you will need to bring in more than 150 / month on the garage property in rent to make it worth the 15k. 

When I bought my first house without a garage I thought to myself, "Most people living in an apartment moving up to a house don't currently have a garage" so it should be fine....   It has been so far.