All Forum Posts by: Matt J.

Thanks for the thoughts, @Joey Dingman. There are certainly a lot of factors that contribute to a strong RE market. And I agree that part of the current drive may be due to the skyrocketing prices in areas to the north. In fact, I know of some who commute to Denver from the Springs. The few times a year I'm down there and have to drive 25 are miserable. I can't imagine doing it every day. Yet it's the housing market forcing people that direction. While I agree a market adjustment is due, it would have to be one heck of a correction to normalize some of the MLS prices we're seeing lately.

Hello everyone,

We all have methods for estimating operating costs when looking at a deal and mine tend to be fairly conservative. After chatting with several other investors recently, I've found many do not account for some property management and turn-over costs I believe to be inevitable. These are costs beyond the monthly percentage of gross rents. Many of these items erode my cash flow when considering a deal. I'm curious to know your actual experience with these things:

1. Tenant placement costs - What does your PM charge to find and place a new tenant in your area?
2. Lease renewal fees - Does your PM charge you a fee to renew existing leases? If so, how much?
3. Mark-up fee - For items beyond the basic maintenance, how much does your PM charge to process bills?
4. Unit turn-over costs - How much does it cost to turn over a unit between tenants?

There are many other items, but these seem to be the most overlooked and they can quickly sour an otherwise good looking deal. If nothing else, this discussion may help some of the newer folks form more realistic expectations.

Thanks in advance for your insight!

I agree with the other comments. Curb appeal often sells the house. In fact, many real estate books suggest starting any rehab with the exterior. It sets the tone for the project and encourages initial interest. 

@Damian DelSignore, I would look at all the numbers - including what you spend on rent - before moving forward. For a simple example, if you pay $1,200/mo for rent, but find an out of state property that ultimately returns $500/mo in cash flow, your net is a negative $700/mo. If instead you house hack a triplex in Austin with total expenses of $2,500/mo and gross rents of $2,000/mo, your net loss is only $500.

Again, this is just a simple example. There are many factors to consider such as potential appreciation, market conditions, financing, etc. Just consider the whole picture before making a decision. 

Hi @Jesse B. and welcome!

I'm also in the Seattle-Tacoma area and looking out of state. Let me know if you'd like to get together to chat. 

And @Ryan Evans is right about Tacoma. It was a great market until the prices went crazy. 

Thanks for the add, @Brian G.! Accountability is huge and education will never hurt you. Great advice!

Great advice, Michael! Focus makes all the difference. That and being open to learn from others can lead you to success. Thanks for the insight!

 Love the idea of thought and focus, Tyler! Your mind absolutely creates your reality.

Mine is do something. There are two types of people in the world - thinkers and doers. The vast majority are thinkers. That's great, but it doesn't lead to action. While it is important to plan, nothing comes of nothing. You must act!

For many, a big goal can very easily become overwhelming. It might help to break it down into simple, actionable steps which could look like this:

• Establish and write down your big goal with a due date
• Break down your big goal into 5-10 significant milestones, again with due dates
• Make a written daily action plan with simple steps for every day leading up to each milestone
• Recruit an accountability partner. This is someone to whom you will report your progress, say on a weekly basis. A good one will keep you on track and not let you miss your milestones.

This format works well for people who struggle to make sense of a broad goal, but can work from a list and accomplish simple tasks each and every day. It effectively turns thinkers into doers. 

Do you have one piece of advice that spurred you to get started in REI? Maybe it's something you learned along your journey or maybe it's something someone else shared with you.

What is your one piece of advice for a newbie just starting out?