All Forum Posts by: Glen Wiley

Great post, not preachy - just solid advice. I hope newbies read it and learn.

I don't think your numbers reflect the real comparison.

Our SFH cash flow gloriously - after doing that for 20 years I am comfy with the returns for sure. We have a minimum $300/month cash flow after debt service to consider a deal and watch for $400-500 as a preferred return.

I amortize HVAC repairs over 10 years and bake that into every SFH, about $8000/10yr/12mo = $65 per month. Roof on one of our SFH was $7800 this year. 7800/20yr/12mo = $32 per month

To keep it real you have to look at rent increases that average 3-5% per year so your cash flow changes over time.

To compare this fairly you have to remember that many multi-family have an HVAC unit per apartment so you don't get to escape that expense. The roof is cheaper per unit, especially if you have multiple floors but it isn't 0. You also still have turnover costs in multi-family, those units don't paint themselves!

Quote from @Bob Stevens:

 OF COURSE!!!!! ALSO, your evicting over a late fee of 50 bux, WHY ?? RE is nothing but math. Ok so let's do it ,Evict, 2- 3 months no rent maybe more.  Now you need to do a rental turn, assume 5kish, , so you just lost 10kish or more,  over 50 bux a month, NOT smart.  HIRE A PM CO ASAP

All the best 

Really good point Bob. It is important to do the math - I wouldn't evict over late fees, only missed rent. You can always pick those up after the lease ends via a judgement in court - you will have the same odds of collecting unpaid rent (close to 0).

Sometimes we take it personally when folks do stuff like pay late every month - landlords live longer when we learn to not take things personally. Treat it like a math problem.

You have to provide a disclosure that simply says that there may be lead paint.

I have found that evictions in Virginia are simple enough and the landlord/tenant law is well enough documented that there is no need for an attorney. My most recent eviction was last fall :)

Take a few hours to search for/read through eviction process in Georgia, the clerk of court is often helpful in filling out forms (but they will not offer legal advice).

Just being late will not be enough to get an eviction, she will need to be in arrears. I suspect that unpaid late fees will also not be enough to trigger eviction but you will want to check.

I have found that starting the process on the 5th day of the month for late rent is essential - they may pay late again but getting formal letters to pay or quit might straighten her out.

Good post. It is important to be constantly educating yourself so that you know what is real/fantasy. 20 years into our RE investing journey and we work to find things to learn every single day.

I don't think LLCs are worth it when you first get started unless you already have major assets. We didn't start forming entities until after 6 properties were in service.

The best place to buy and hold is where you can :)

1. Look at employers in the area - you want some diversity of employment so that if 1 company closes you don't lose a bunch of the population

2. Look at population/migration trends and futures. Read the census.gov site and do a few searches. You want areas that are trending positive for population growth.

3. Neighborhoods matter, even a few miles can make the difference between good and bad deals. Get to know the specific neighborhood, RE is hyper-local, there is no single market in any metro area, it is comprised of many micro-markets. This matters.

4. Deal specifics of course are a big deal - define your buy box and make sure the specific deal works (cash flow from day 1).

Quote from @Nathan Gesner:

Don't listen to the YouTube "experts" that say you can build wealth without any money. We have thousands of years of sound, practical advice that has proven to work. Increase your income, reduce your expenses, save consistently until you build up enough to invest. That's the proven path to success. It takes sacrifice, consistency, and time.

Such hard truth....

I have seen many people discouraged because they can't scale as quickly as they think everyone else does or they think others had it easy. They look at a snapshot of success and don't realize the years of brutal hard work it took to get there.

I have spent SO MANY nights and weekends getting off my day job and racing to a rehab site. For years I would go months with no free nights, no free weekends.

Now, with a rocking portfolio, I don't regret the absolutely brutal effort I put in to get here.

It can be very hard, but it is very worth it.

Don't get discouraged, tighten your belt, put your shoulders to it and push, you will find a way - you will not be sorry.

Two things that have caused me to choose to not install a hot tub at our STR:

1. Sustained maintenance costs that are higher than anticipated increased occupancy and nightly rates. I just can't make the numbers make sense assuming a $0 capital expense for purchase/install.

2. Potential problems resulting in bad ratings. If a guest spills food in the hot tub or fouls it, the cleaning crew will discover it during turnover and have to block it (no way to clear that kind of mess in a 4hr turnover). The next guests will almost certainly be upset that the hot tub is out of service for their stay and are likely to injure my near perfect streak of 5 star ratings which will injure search rankings and possible lose me bookings.