All Forum Posts by: Mike Makkar

@Todd S., Have you done a cost analysis on how much you are spending on labor for all of your properties. I spend an average of over 80k a year on various repairs and improvements minus parts. I'm sure, if I had a handyman on staff, I could pay him 45k and scale it for more properties. However, the flexibility of having multiple subs across various parts of the city outweighs the costs of managing an employee. Furthermore, if my worry would be if I had a crew, would I keep the person busy enough for the entire year. 

If you can keep a crew occupied (8+ hours a day, 5-6 days a week) then it makes complete sense. As far managing employees go, its just a matter of figuring it out and achieving a streamlined process in place. 

My rule of thumb is if my expenses are 3x are that of a employees salary, then I would bring in as an employee. For me that would be 45k x 3 = 135k a year.

Welcome to BP, @Jeremy Sicarro

Sorry about your father-in-law's situation. Sounds like he is a young man, :( Its tough for you and your wife.

You'll learn a lot from BP. My suggestion never stop learning. A four-plex is a good way to learn. Having gone through your recession experience, I believe your got your first training of buying a property at the right price. I'm sure you guys will do well. 

@James DeRoest, Hmm, read the first parts of the thread where I ask for other landlord's opinions. My "humanity" lies in the fact that I'm not going to evict him for delaying his January payment and pretty soon his February payment. The 13% ($19) markup is my "service fee" to act like a bank so instead of him advancing 1 month's rent, I'm giving him a break to advance rent on a weekly basis. 

Sure I could demand him to get a payday loan to pay his monthly rent or else face eviction. For $1125, he would be paying payday loans, $170 in fees in one week. I.e  if he pays them back in time. So in other words a whopping 600% apr!

The tenant has agreed to my terms and I have disclosed that instead of $1125, he'll be paying $300 a week ($1200 for 4 weeks) and he is fine with it. I think I should be able to sleep peacefully.

@Jay Hinrichs

Yup, short-term pricing markup strategy. Actually the monthly rent is $1125

1125 x 12 = $13500

300 x 52 = $15600 (13% markup for the service is more than fair)

@Bonnie Rakes, good ideas. Yes, i wrote up a new lease addendum and planning to give it to him tomorrow. Yes, I've considered the 1 week advanced rent vs. 1 month advanced rent. It will take 4 months to get him to a 2 week advance (for the up charge) and that will be covered through the security deposit. Any delay in rent starts the clock and grounds for eviction. Lets see, I wanna see how this arrangement works out. I have enough of a buffer to play this "rental speculation" idea.  

Hi, Anybody have any recommendations for lenders or banks who offers FNMA's delayed financing option? Not all banks are familiar with this and most CU's and banks I talk to run through their standard loan origination script and I'm getting penalized (with 3/4 points) for having purchased properties ALL-CASH in the last 6 months.

Thanks, Mike! 

@Carol Donaldson, They are one of the bigger wholesalers around. Like most wholesalers, they over-estimate their ARV and underestimate their rehab costs. I'm on their mailing lis and occasionally I see good deals from them. I've never purchased any properties from them to comment on their added fees. My advise is, as a good investor, network with several wholesalers around and keep a pulse on the overall market as a whole. Occasionally you'll come across a good deal that you can capitalize on

hmm, you're not going to find a qualified tax accountant or attorney to suggest one way or the other, and especially not on a forum. Talk to your accountant. I'll bring it with my accountant as well. 

@Franklin Romine, collecting rent?

My tenants just deposit into my bank account or they just ACH.

Hmm, I'm beginning to see how all landlords stick to standard rules when it comes to these things.

@Nathan Gasti, heavy reno? Not sure what that means

@Ray P., I wouldn't rely on school rating unless you want to live in the house or banking on longer-term appreciation and a flip there-on. Flips are more school dependent. And in my experience, in a good-market, good deals are harder to find in good schools/neighborhoods.

I assume, you applied the fundamentals. For flips, Purchase properties at 70% of ARV (minus) repairs. and for rentals, purchase at 50x to 60x of monthly rent amount, criteria?