All Forum Posts by: Eric Bowlin

Refi as fast as possible @Joe Villeneuve I believe this is the velocity of money at power. Smaller return done faster and faster can outpace a slower but much higher return.

Leverage is not bad if you have good solid income to cover it. If you over-leverage and have slim margins..this is a recipe for disaster. After leverage you can easily have 20, 30, 80, 100% or more return on investment for a property. Save some of this return to fill in the lows when you get a tenant from hell, which happens to even the best.

It's really all about working the numbers.

As far as risk. Why not engage in a holding & operating company setup? I'm not an attorney but from what I understand it limits risk to the property, pushes the risk into the operating company which should be burdened with excessive amounts of debt anyhow..adds an extra layer of liability insurance..and ensures there are at least 2 corporate veils to pierce. 

Good accounting should limit the ability of the average attorney to pierce the veil. It's really all about the money trail.

@Dana R. I would always take full payment and then write a check for the cost. It's important to do this because all business accounting should be done in accordance with GAAP. Though you can account for it properly with the incorrect check amounts, I like to make all my checks line up. Deducting the expense inaccurately makes your expenses less than they are and your income as a ratio to your expenses looks better.

I'd evaluate my situation with the tenant. If they were an AWESOME tenant for many years..I'd probably be very stern..explain that we will just exchange checks for the proper amounts..and they will sign a document that they understand they violated the lease; any further violations and they will have to move immediately.

If they were not good tenants overall and this is something in a long list of issues.. Good time to find a new tenant.

The unfortunate thing about this is usually a broom handle and 10 seconds of time makes the stupid garbage disposal work. 

@Andrew Whicker I doubt the 7 bucks a month will really affect your decision. I have had difference in tenants or vacancies... Save on water.. And get a few extra dollars here and there. The fact that I have on site laundry is huge for the tenants.

Is AC required in Florida for a rental? AC is a luxury here and most places do not have it (but heating is obviously a big issue in New England). Is your HVAC heat and cooling?

Do you have right of entry written into your lease agreement? If so, not really an issue in my opinion. You didn't enter either way so definitely not an issue. Any landlord I know has right of entry written into the lease.

If AC is required or expected as part of your agreement then you should provide it to the tenant. If you are not providing what you agreed to, the tenant should not pay the rent..or at least receive some rebate for having not received the whole product/service. If this is the case, you are lucky you have Section 8 to blame for removing her. If I were the tenant and you refused to uphold your lease, I would refuse to move and I would withhold rent and put it in escrow until you fixed it. I would also demand a discount and let you take me to court if you refused. You are very lucky they have section 8 and get strong armed into moving and paying if they want to continue to get my tax dollars.  

I'm so excited for 2015. I'm focused on accumulating as many multis as I can. There are still some areas that the crazy prices have not hit and make good opportunities.

In 2016 or later I will start to invest in improvements like @Roy N.  suggests. Try to maximize the rents and occupancy of existing properties once there are few good deals.

Here in MA we have a bubble for sure.. Irrational..yes...but this bubble won't pop. A number of factors have me very concerned. I studied Economics at the PhD level before dropping the program to get into real estate. Though the saying still holds true for Economists that opinions are like A-holes..everyone has one... I can look at it a bit more analytically than most.

@Matt R. Full employment is a farce. The economy is a part-time economy now and has forever changed. Full employment is defined that everyone 'able and willing' is employed. With at least 3/4 of all my tenant applications filing with extensive disability income due to 'personality disorders' I know that the system is broken. These able bodied people don't work legally and generally work under the table (I get approached weekly to provide under the table work..which I decline to do). Of course though, I would never discriminate against source of income.

I live in an urban 'suburb' of Boston. When Boston real estate gets too hot, people invest in Worcester.... 1 year ago a 3 unit building would sell for 150-175.. Today it sells for 300-350. In one year there has been 100% appreciation in 3-decker buildings. Pre-crash 3-deckers sold for 300-350. Additionally. at 300k, they do NOT cash-flow. I have run the numbers for clients of mine (Im also a REALTOR) and the cash-flow is 0 or negative....they are speculating on appreciation as well as tax benefits.

Finally. I do not believe this bubble will crash like before. The old bubble was built on bad debt..This bubble is built on 5 years of pent up demand. The demand will subside and prices will go down..but there is no underlying fundamental misalignment. The rental market is far more stable and I believe the banks are far more conservative this go-round.

Additionally...MA has very strict foreclosure laws which means there is a very high 'shadow market' but many of these buildings trickle slowly to the market. This keeps supply low and prices high.

Just my opinion on my local market. Do not make any investing decisions on my insights as I'm not qualified to give you advice on investing decisions.

For us...the income on the laundry was not the issue..but the savings on water.

In my city..water/sewer costs around 25/unit/month depending on family size. So..3 units (standard size here) is around 225-275/quarter. Water is very expensive!

Also, in this area..almost every building...even every apartment..has a washer/dryer hookup.

I tested in one building to remove all washer/dryer hookups and provide 1 coinop washer and 1 free dryer in the basement. I earned about 250 for the year but saved around 400 on water. I Realized that tenants will do laundry with just 1 or 2 items when it's free..but do large loads when they pay.

@Gary Erdoglyan "You are a sales agent, not a secret agent."

In MA..we don't have to advertise agent # but all transactions that a sales agent is a part of needs to have full disclosure you are an agent. I literally write in all my offers... "buyer is an MA licensed real estate salesperson".

This is MA specific..but I would recommend this be universal if it isn't already.

Clear and marketable title is not a standard in the contracts in detroit?

I have plastic opaque blue business cards. I don't know how they work compared to other business cards but I get the same comment every time I give it...

"WOW! this is so unique..so cool!" 

People remember unique things..My business cards are plastic.. My credit card is aluminum, thick, and feels like a brick and has a gold chip (travel cards have these)..I get a comment every time I buy a coffee with it.

These things 'look' unique and expense and intriguing...I personally think it gives a good impression and people won't forget you quickly.. "hey that's the guy with the cool business card". They are great conversation starters and can find you business is the most mundane places.