All Forum Posts by: Eric Telese

I am currently looking for an investor friendly agent in Nassau County. More specifically Glen Cove, Locust Valley, Glen Head, Sea Cliff, Oyster Bay areas.

I am looking to potentially BRRRR and/or flip houses in my area. I have access to an off-market property that I am very interested in and will need an agent to help me with the deal, rental and purchase comps, etc.

Hi everyone! @Rich V. and myself are currently under contract on our first rental property in East Point, GA- just south of Atlanta. Our due diligence period ends on 10/23. We have had our inspection report done a few days ago and have now compiled a repair list highlighting all issues discovered in the report. It is a 1,156 sq foot, 3 bed, 1 bathroom single family home: Zillow Listing. We are under contract at the top of our budget for this particular house where the numbers will still make sense for us.

We have uncovered a lot of issues after our inspection report. Most of my gut tells me that these are too many issues for comfort on our first property, and to find a new one. But, we also will not walk away without asking for repairs/lower price to try to find a way to make this deal work and still hit our numbers. We have $3500 in rehab costs already planned for, but I think this list looks more like 10k-15k. If this is the case, we would need either some of the big repairs met, or a pretty drastic decrease in agreed price. Keep in mind we do not have known cost amounts for these repair items, and can just make estimates, and hope no other costly issues are uncovered after attacking some of the repairs.

My question is, with our next interaction with the selling agent, should we:

A) Ask for the major repairs be met

B) Ask for a decrease in agreed upon price (without great idea of what the repairs will cost)

C) A combination of both; settle with some repairs met, and a decrease in price

Our entire list is below: (keep in mind that I am not sure if all of these things need direct attention to get the unit rent-able, or if some items can be overlooked for now and deal with later as they become more of a problem)

Repair List:

Items that need attention before renting unit:

Big Ticket Items:

Install furnace
Install all new appliances
Install water heater
Exterior electric power supply is damaged, needs repair
Install gutters
No termite treatment
No gas meter, install new
Attic decking has moisture damage, needs repair

Smaller Repair Items:

Install electric panel faceplate and secure exposed wires
Two prong outlets (could not test), swap out, install GFCI where needed
Trim tree limbs in contact with power lines
Missing light cover under front entrance
Repair kitchen windows
Repair kitchen sink leak
Repair utility room leak
Insulate attic
Seal gaps in living room door
Loose bathroom faucet
Adjust shower water pressure
Patchwork performed in multiple rooms, walls are plaster on wood lathe- which I have been told can have asbestos issues once opened up

Deferred Cost Items:

Large tree removal
Torn and missing roof shingles
Seal plumbing boots on roof
Raised soffit under car port
Secure electrical lines in attic, they run over attic stringers, not through them (necessary?)
Hose bib loose
Install concrete pad at rear service door

If you made it this far, thanks so much for reading! Advice/opinions on any aspect of this post are greatly appreciated!

After a wonderful weekend trip to Atlanta to check out neighborhoods we want to invest in, we came to the following conclusions. Would love to hear opinions on any of the areas discussed in this thread, what we might be missing or not seeing. Of course, just driving areas can not paint the entire picture.

(1) Morrow

• Small neighborhood feel. Small blocks, all look well maintained (landscaping, upkeep, etc.).
• Definitely the most rural-feeling of the areas we visited. Looks like quality tenants and felt safe. With that being said, not much in the area, rural and more spread-out. Not much on highways, restaurants, bars, etc.
• Avg rents looking to be consistently over $1,000 with some upwards of $1,500. Good cash flow, but not sure about appreciation.
• Reminded us of East Point, but a bit more spread out. Uber driver was from Morrow and had good things to say.

(2) East Point

• Drove for about 2 hours around the neighborhoods. Got out talked talked to a flipper we saw from his construction truck and he said great things to say. He walked us around and showed us the house. Definitely a solid guy, he's on BP, knows the BRRR method. He said he's completely gutted and flipped 15 houses last year, he showed us pics and the work was impressive.
• Neighborhoods felt very nice, but surround areas seemed a little more rough (strip malls, etc.) Neighborhoods well maintained and a lot of small brick houses around the $120k mark.
• Rents look to be around $1,000, agreed?

(3) Rex

• Looks like 3/2's renting for around $1,200. Lots of homes for sale in the low $100's. A lot of small brick houses. Solid neighborhood.
• More rural & spread-out than some of the other areas we saw.
• Seems decent, but same as Morrow, cash flow seems pretty stable but not sure about appreciation.

(4) Jonesboro

• We were expecting this be more rough just based on some of the listings we've seen online. Don't know if we just saw the better areas when we were exploring, but was pretty impressed. Nice houses, pretty good neighborhoods. Overall well kept up with.
• Didn't spend a huge amount of time there, but rents look over $1,000 and priced at or below $100k. Are we missing anything here?

(5) Riverdale

• Same as Jonesboro, was expecting it to be more rough, but wasn't bad.
• Stopped at a liquor store which we think was on the edge of Riverdale and more rough than the neighborhoods felt. 
• Rents stable around $1,000 and homes at or below $100k.

(6) Forest Park (1263 Watts Rd you showed us)

• Decent neighborhood, didn't get a chance to drive around too much.
• Rents around $1,000 and homes at or below $100k.

(7) College Park

• Didn't drive too much of, rents looked strong and saw some more expensive pockets there. Some people we talked to said its an up and coming area.

(8) Hapeville

• Didn't drive too much of, not too sure what to expect here. A bunch of people we talked to said it was a good spot to invest in. Is this because its close to the southern loop of the Beltline?

Did a bunch more while we were down there too. Scootered all over the city, had some good food good drinks, explored the beltline, saw some of north Atlanta with our cousin. We found a beerfest near Piedmont Park and talked with probably over 20 people about Atlanta neighborhoods and areas to invest. A lot of people are saying near the beltline. While appreciation is great, our main goal is cash-flow. What are your thoughts, are we foolish to not invest near the beltline? Beltline prices seem to already be pretty high. Our original plan was to invest in Clayton County, hence all the areas described above.

We're using the BP deal calculator and looking to get to a monthly cash flow number of $200/month with a return of at least 10% (after all expenses allocated for: PITI, CapEx 10%, R&M 8%, vacancy 8%, property management 8% and other PM "other fees" 4%. What do you think of the percentages we're using? This is how we're filtering through properties, we're looking to hit those CF and ROI numbers conservatively.

Hi everyone. I am going to be in Atlanta tomorrow through Sunday 9/23, looking at buying my first rental property. Very excited to check out the areas and connect with new people.

We would love to meet up with anyone looking to chat real estate and have some good conversation! Message me if you would like to grab coffee, some lunch, a drink, etc.

@Joe Hines that is what I’m going to start doing- tack a few extra percent on when running numbers. It’s tough to estimate an accurate yearly or monthly number with those fees.

I like the idea of keeping those two accounts separate for bookkeeping. Definitely going to keep those expenses separate and track them over the years.

Thanks for your input!

@Rich V. I agree. I see that some of these companies have high leasing fees and renewal fees. Either way- if they lose a tenant or renew them, they get a nice chunk. I am not trying to create a win-lose situation for anyone, especially someone I will need to put this type of trust in with my property. But, I feel the same as you where interests might not be aligned. 

Definitely would like to know if this is typical structure, and any other tips would be great!

Hi BP community,

I have always accounted for 10% property management when analyzing deals. I have learned this through @Brandon Turner webinars, podcasts, etc.

Now that I have seen other fees involved with hiring a property management company, it seems like that 10% will be much more. I added in leasing, renewal, and setup fees, in addition to the actual 6-10% management fee. Now after calculating, my entire property management costs are coming out to 15%-22.5% of rent, varying by company. 

Leasing fees are varying from 50-100% one month rent. Renewal fees from 35-75% one month rent and some charged every six months. Management from 6-10% and some companies charging setup fees. 

These are all expenses I will incur to have property management, therefore I feel I absolutely need to calculate these numbers into my analysis. This cuts the margins I was thinking I’d get or requires me to offer lower. 

Am I missing something? Is this usual and do people use these numbers when running their analysis? I have asked some who have said they do not include these fees in analysis. If not, why would’t you?

I have always accounted for 10% property management when analyzing deals. Now that I have seen ither fees involved with hiting a property management company, it seems like that 10% will be much more. I added in leasing, renewal, and setup fees, in addition to the 6-10% management fee. Now my entire property management costs are coming out to 15%-22.5% of rent. Leasing fees are varying from 50-100% one month rent. Renewal fews from 35-75% one month rent and some conpounded every six months. Management from 6-10% and some companies charging setup fees. These are all expenses I will need to pay to have property management, therefore I absolutely need to calculate these numbers into my analysis. This cuts the margins I was thinking I’d get or requires me to offer lower. Am I missing something? Is this usual and do people use these numbers when running their analysis? If not, why would’t you?

Hi all. 

I am looking at purchasing out of state rental properties. I live in NY and want to invest in Georgia. 

1- Can I use conventional lenders in my area? Or do I have to go to banks in the area I am investing? 

2- Will I be able to secure conventional financing for a rental property?

How about using the BRRRR method in car buying... This is what I plan on doing with my current car. Let me know what you all think: I purchased my car used almost 4 years ago from a motivated seller with low mileage and under market value. I now own it free and clear but have 28k (my purchase price) equity in it. I can still get at least 23k for the car, hoping 24-25. (I also only put about 5k miles a year on this car). I will use a fraction of this money towards a newer car and use the rest towards RE investing. I want to find the same type of under market value, low mileage, used car for around the same 28-30k range. I will purchase with minimal money down and a low interest rate (2-2.5%) from a credit union. Now I am back into a newer car and the bank is holding the loan for me for 2.4% or so (basically free money as far as Im concerned) for 3-5 yrs or whichever loan life gives me the best rate. Do it again with another great value used car purchase after a few years and basically I have owned a very nice car for $4,000 over the past 4 years AND pull a large percentage of the equity out of my car before it depreciates any further. This 18-20k can be invested in Real estate which will yield me a higher % then the cost of interest on a used car loan. If i were going to bank it, of course this method would not make sense.

I recently had an idea that grew out of listening & learning about creative financing and BRRR, refinancing, etc. I currently own a 2013 Mustang GT that I purchased three years ago under market value from a motivated seller who needed to get rid of his high monthly payments. I got the car for 27,500 with only 10k miles on it. Like new, very well treated, low miles, etc. Took me a year to find this car used in the color combo i wanted.

Three years later and only added 15k miles to it. (25k total). I am thinking of selling it before the car depreciates any more. I think I may be able to sell for close to what I paid for it. I can then find another good deal- used vehicle for below market value, with lower miles, and a bit newer. 

I can pull all of my equity out of this car and get a 1.6% interest rate on a used car loan from a local credit union. Put the bulk of my equity into the bank and use it to put towards my savings to fund my first real estate deal (probably a flip). 1.6% is virtually free money. Let the bank carry the loan for me, and have the funds readily available to do other things with, as well as drive a newer and less used car. I would virtually have driven a beautiful car that I love for the last three years for free or just a few thousand bucks (if I can't sell for what I want). 

Repeat the cycle in a few years when I add some mileage onto the newer car and own it in full. I am against buying a brand new car because we all know how much cars depreciate. So I love finding nice, lightly used cars at value prices. I also would not lease a car like this. What do you guys think? Am i missing something or great idea?!