All Forum Posts by: Gaurav Nandola

Thanks @Ahmad H.@Drew Sygit @Remington Lyman, @Chris Seveney for great thoughts and suggestions. Yes the properties are in B and C+ areas. I had budgeted using 8% maintenance, but might need to revisit. I will try to make some projections for next 5 years and consider whether it makes sense to hold on or not. It is great to be able to tap in to experts on this forum.

Thanks @Kenneth Garrett. Yes it has been a learning experience. The tenant was paying for the 1st couple of months, then he lost his job and since then hasn't paid a dollar. The main PM is very responsive and is good in taking care of things. However, some of his staff don't get back unless I send a few follow-up emails. 

Cash flow is negative right now due to repairs and non-paying tenant. It should turn positive once the units are all occupied and paying rent, but CoC returns will be poor. Thanks for the tips on communication. Yes I do have agreement on dollar value of maintenance.

I am out of state in California and have a demanding day job, hence I can’t do the day to day management. Thanks.

I am newbie and I was motivated to invest and acquire a number of properties to create a portfolio.

I took the plunge this year and bought 2 duplexes in Columbus, Ohio. However, in my enthusiasm, I made several rookie mistakes. 

First, my deal analysis was showing a cash flow of 5-6%, which was low, but I thought it would be good for a start. 
Secondly, I trusted my realtor too much and didn't verify all the information about the neighborhood, expenses, vacancy rates, etc
Third, I assumed that rents would go up.

Now, after owning the place for 6 months, I find a lot of pain points
1. The deal is not turning out how I thought. I knew about some repairs, but the operating expenses seem much more that I budgeted.
2. Recently, 2 of the tenants moved out and I found that I had to lower my rents by $100-150 per unit per the new comps in the area, eating further in to cash flow
3. One of the tenants hasn't paid rent for past 4 months. While the property management team managed to get some support from a non-profit, the funds are yet to arrive.

I also thought it would be more of a passive investment since I hired property management. However, I am constantly replying to their emails and following up.

Anyways, given what has happened, and since interest rates are on the rise, I was thinking a few options.

1. Sell one or both duplexes and take a small loss due to commissions, etc. Maybe now is the time to get out, before the market corrects significantly.
2. Grind my teeth and hold on to these properties. Since RE Investment are long term investments, wait a few years to see if things improve. But right now they seem to be like money pits.

Appreciate your thoughts on this.

Regards,

GN

I am a bit late but if anyone still has a ticket they want to sell, please DM me.

AHS ShieldPlatinum plan says they cover "roof leak repairs".

I am trying to buy home insurance for 2 duplexes in Columbus. One of them has roof repairs recommended per the inspection report. 

However, adding roof leakage coverage will double the insurance premiums. From what I read in the forums so far, most people recommend not to claim minor roof leakages to insurance company to avoid premium increases.

In that case, is it worth it to carry roof leakage coverage or just go with basic home insurance.

Thanks Dan, yes based on the responses I backed out of this property. I will keep looking for better deals.

Thanks Bruce for sharing this. Makes sense.

Hello,

I am trying to buy my 1st rental property. The numbers look good with a positive cash flow expected. However, it is a 1200 sq feet home, which was converted from 2 bed to 3 bedrooms without a permit. I am not sure how to handle this and if this may create any legal issues later on. My realtor tells me that many units here have done that and if the county finds out, I may just have to pay the permit fees. But she added that I should do my due diligence. Does anyone have such an experience here in San Diego?

Thanks,

Gaurav