All Forum Posts by: Xin Peng

In person conversations can be insightful but the hard facts (credit score, eviction history, criminal history, tenant income, etc.) are more important.

In my area, adjusting for utilities included or not is the biggest swing, since there is a not a standard. But I do look for other things and make adjustments. Maybe seeing my system would be helpful:

I base 25% of my calculation on $/square footage. For the bedroom count in question, I grab the low, high, and average $/square foot for the past 3 months, and apply that rate to the square footage of the new/vacant property, to get to an average to weight 25%.

I base 15% of my calculation on the average market rent for the bedroom count in my target neighborhood. So if others have been getting $750 for a three bedroom over the past 3 months, I give the $750 a 15% weighting.

And I base 60% of my calculation on geographical comps. I look for three or four listings with the same bedroom count that are one block either direction from the new/vacant property, making adjustments for features to make the properties comparable. For example, if the comparable listing has a garage but the new/vacant property doesn’t, I subtract $25/month to make them comparable. I use $25/month for all of the following features: allowing pets, garage, dishwasher, and washer/dryer included.

Your methods, amounts, or details may vary, but it is a framework to consider tweaking.  Our aim is to be in the middle, not the highest or lowest rent.  We want plenty of interest when a unit comes available, but to not be flooded with interest.

I had this happen once, early in my career. I found an excellent tenant: single, elderly and retired, no pets, kept an immaculate home. Three months later the Landlord called me and said, "She's going to stay there forever, so I don't think I need property management anymore." I implemented a termination fee shortly after that.

The majority of the work is done up front with marketing, application screening, putting them under contract, etc. But the income is spread out over the life of the lease. I really don't turn a profit until after six months. If the owner left early, I would lose money.

@Xin Peng Everyone wants to break contracts with no penatlies - including tenants!

Let's use your logic and apply it to lease contracts with tenants:)

According to the logic of your own words, with roles switched for this analogy, "if the LANDLORD does a good job, normally the TENANT wouldn't bother to switch the PROPERTY, so they shouldn't worry about the early termination <charge>."

So, why hold tenants to lease contracts?

If you want tenants to honor their leases, or pay a penalty, then why shouldn't Property Management Companies expect owners to honor their property management contracts or pay a penalty?

Going to guess that you, and many other owners, won't like this analogy because it rebuts what you want - the ability to enforce an illogical double-standard. 

YOU want to be able to get out of a contract without penalty, but don't want to be held to the same requirement.

Hey @MarieChele Porter, glad to hear you are moving to Fresno!  I've been buying MFH in Fresno since 2014.  Here are my favorite team members that you can check out

Lenders:

Mayu Capital - Eric Mayu

Mid Vally - Jordan Ribera

Contractors

Sawatsky Construction - George Sawatsky

Impeccable Construction - Justin Summerford

Managers

Neighborhood Property Management - Franklin and Lisa Spees

I have a lot of others too, feel free to message me with anyone specifically.  I can also send you numbers via email as BP doesn't allow numbers on the forums.  Just let me know what would be helpful!  See ya! 

@Xin Peng Here's how we, and several other companies do it:

1) You get 30 minutes on the phone to discuss if we're a good fit

2) We send you a form to complete about your investment goals

3) We put in you our drip campaign

4) You let us know if anything interesting

If you want us to give you a tour or evaluate a property, cost is $50/hour, minimum $150 upfront. 

If you can't afford the $150, then you're telling us you're NOT serious and just want to waste our time.

May seem harsh, but it's the only way we can invest our time wisely:)