All Forum Posts by: Frank Maratta

@Antonio Salgado

Do you currently own any real estate? Depreciation helps a lot to offset the passive income in real estate.

@Brant Richardson

This is what I love about real estate, it’s the one industry where you can make a mistake but if you hold on to the asset long enough it work itself out.

That statistic sounds like restaurant owners. My father is in that industry. He has owned and built 10 restaurants over the course of his life, out of those 10, only 3 have been successful. He is like the majority of people who don't have the patience and want quick money "now". The result is a high risk for high reward. I would rather have a lower ROI but a safer investment. He's 66 years old and still trying to find the next "sure" thing in terms of a restaurant. I'm 30 years younger then him and have a greater NW because I had the patience to chose safer investments.

I don’t know how the 97% failure rate was calculated but my guess is that the types of people that pay for those courses may be too scared to pull the trigger and therefore never get started, thereby falling into the “fail” category. I would like to see the statistics on those who have actually purchased a property and failed.

@Pietro Serra

Rough estimate $100-$125 / sq foot

@Maria Luna

$5000 per month, I did it in less than 3 years and I started with about the same amount of cash as you. Use the BRRR method and self manage for as long as you can. I disagree with those who are just starting out immediately paying property management to handle their units. Unless you are really that short on time, a few hours a week is all you need to manage your rentals yourself and the amount of experience and knowledge gained is worth the extra time.

Buy the building, rehab it without taking any short cuts. Get the property 100% especially the exterior to the point where no major cap improvements are needed for the foreseeable future - this is what enables less tenant phone calls and problems with the property and gives you more time to focus on growing your empire. Refinance it and move on to the next.

@Jennifer Rysdam

Was that fridge disconnected from power and remained closed after they moved out? That mold growth looks typical of that

@Scott Kidd

About 50% of my tenants are on section 8. It’s true that section 8 gets a bad rap for the type of tenant it brings. However, if you screen your tenants you will be fine.

I don’t have to worry about chasing the rent, the government portion comes in the mail between the 1st and the 10th. And the tenants portion is there before the 10th. I have heard that if the tenant does not pay their portion, they risk losing their section 8 voucher. Not sure if this is true or false. If someone could chime in on that let me know.

The inspection is really just a safety inspection. If your apartment is in good shape you don’t have much to worry about. They don’t do a lead “test” as someone mentioned, but they do look for peeling paint and require you to correct. If they did a lead test 70% of the multis in my area would fail.

The biggest drawback is electrical. All the multis I have had knob and tube wiring, as with any rehab I completely gut the old wiring. The inspector will go around to electrical outlets and if you have knob and tube in the walls and have a 3 prong outlet it will register as an open ground. Your choices are to either convert it back to a two prong outlet (not ideal with many electrical appliances now needing 3 prongs), wire the house correctly, or put in a GFCI at that outlet (which can get costly as well).

@Jennifer Rysdam

After 8 years I would expect a mini rehab - cabinets appliances countertops and repainting the entire apartment. If after 8 years all you had to do was clean, you got away easy.

@David Nino

In my area, $4000-$5000. Typical sales values are mid $300s for a 6 unit with rents around $800/unit.

@Joel Kleyer

I’ve done something similar to this. The appraiser simply asked what I payed for the property. The original purchase price didn’t limit my after rehab appraisal at all.

I bought one property for 80k, he asked what I thought it was worth and I said $250k, I gave him the highest comps I could find, and sure enough the appraisal came back at $253k.

As long as your rents can support the ROI you typically look for in a deal with the ARV you have in mind I wouldn't be too concerned about the appraisal. You can always challenge it as well. Every appraisal I've had, I never am surprised with the ARV that I get, the appraiser always depended more on me then I depended on him.

@Michael Temple

I use wire mole in all my rentals. Keeping it on the baseboard and painting it, you can’t even tell. Tenants don’t mind it. But if your flipping, the seller may or may not. It Can sometimes save a ton since the multis I buy are built early 1900s and have plaster instead of sheet rock. If the house had sheet rock, I might open the walls and run it correctly. Once you start messing with plaster, might as well take the whole wall your working on down. A good electrician can old work it all making very minimum openings.