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All Forum Posts by: Greg Weik

Greg Weik has started 8 posts and replied 207 times.

Post: Out of state or in state

Greg Weik
Property Manager
Pro Member
Posted
  • Property Manager
  • Denver, CO
  • Posts 219
  • Votes 285

@Adam Regos, there is some great advice in here, and I originally came in to echo the "don't try to time the market" sentiment.  

But I also thought your 5-year timeline to get out of corporate America and into full time investing intriguing. 

Probably not on your radar, but there are more ways to make money in real estate than ONLY owning properties (which is a good way and I recommend.)  Specifically, if you started a property management company in San Diego (or elsewhere) you could very well be a millionaire in 5 years if you hustled at it.  Take that $170k and invest it in yourself and in building something that's recession-proof and worth more every year - your own company.  Then, if you want, take that PM company 5 years down the road and sell it for 1.5X annual revenue.  Boom. Or just keep raking in the monthly recurring income and have your staff run it. 

Once you have an established PM company, you will have all sorts of connections.  Pocket listings from your clients who want to sell, Realtors you interact with, etc. etc.  Doors simply open.  Ask me how I know.  :) 

Anyway, just a thought outside of the usual box. 

Post: Most real investors should not buy from realtors....

Greg Weik
Property Manager
Pro Member
Posted
  • Property Manager
  • Denver, CO
  • Posts 219
  • Votes 285

My lens as a property manager is a little different.  I locate and buy my own deals because no one knows the market like a property manager.  No Realtor will have the volume and data to draw from that a busy property management company has in a given market. 

Our smart clients contact us before they buy.  They ask us what areas and types of properties have the best return, and they are not solely focused on the cap rate.  Cap rate doesn't take into account things like "what kind of tenants can I expect in this area", or "what kind of turnover can I expect", or "what is the trend in this area in terms of rental rates and vacancy times."  

Most of the people I've worked with since 2008 who claim to be investors aren't.  If they own multiple properties, the portfolio is usually made up of the worst of the worst in terms of property condition, location, and tenants.  As others have said, the self-proclaimed investor is often a very difficult and demanding customer to work with as well.  The investor moniker doesn't imply wealth or wisdom in my world; I would suggest people use it more sparingly!  :) 

Post: Colorado Springs or Erie, Colorado?

Greg Weik
Property Manager
Pro Member
Posted
  • Property Manager
  • Denver, CO
  • Posts 219
  • Votes 285

Some great insight in this thread.  From a pure appreciation standpoint, this comment is golden:

@Maria Bakaj "I personally tend to stay away from areas where there's a lot of land for new developments. I'd ask yourself the question, "In 10 years why should someone buy my house if there's a brand new one with the latest styling and fixtures down the road for the same price or slightly more." 

Whether you are buying rental properties (my specialty) or looking for your primary residence, if appreciation is your goal, you want to buy in an established area where there is little-to-no room for new construction.  This is where appreciation consistently is strong. 

Post: Is the 1% rule that important?

Greg Weik
Property Manager
Pro Member
Posted
  • Property Manager
  • Denver, CO
  • Posts 219
  • Votes 285

@Kate Cavanaugh, that's interesting that a new construction home will rent for 1.5% of the sales price. 

Are you sure?  Sometimes, I find that new clients get bad information on rental rates, either from a Realtor trying to close a deal or a neighbor who dramatically inflates the actual rental-rate. 

In my experience, new construction is a poor play for a rental property.  When you buy new construction you are always buying at "top of market".  

If you buy new construction, at the top of the market, you will not see any significant appreciation for years to come.  This is why I always advise my clients to look for homes in established neighborhoods, preferably without HOAs.  Owning a rental property - in my opinion - is not about cashflow only.  This is missing the forest for the trees.  

Example: $500,000 new construction home near me rents for $3,000/month.  Meanwhile, a $500,000 home in an established neighborhood rents for $2800/month.  

The new construction home makes $200/month more in cashflow.  The new construction home does not see any appreciation for 5 years.  

Meanwhile, the established neighborhood home appreciates 5% (conservatively)/year.  $525k year 1, $551,250 year 2 and so on.  So that $200/month or $2400/year cashflow on the new construction home is a red herring when compared to $25,000+ in appreciation annually. 

Hope this helps you! 

Post: Landlord Questionaire for Tenants

Greg Weik
Property Manager
Pro Member
Posted
  • Property Manager
  • Denver, CO
  • Posts 219
  • Votes 285

Time, expense, liability are all reasons to hire a professional property manager.  

The questions matter less than what can be proven via documentation (i.e., income, credit score, reliable rental history.) 

If you're lucky, there might be a PM company that offers free tenant placement and only charges on the monthly rent collected. I would search google reviews of PM companies in the area. 

Post: Landlord Questionaire for Tenants

Greg Weik
Property Manager
Pro Member
Posted
  • Property Manager
  • Denver, CO
  • Posts 219
  • Votes 285

Time, expense, liability are all reasons to hire a professional property manager.  

The questions matter less than what can be proven via documentation (i.e., income, credit score, reliable rental history.) 

If you're lucky, there might be a PM company that offers free tenant placement and only charges on the monthly rent collected. I would search google reviews of PM companies in the area. 

Post: How to Market Rental with Utilities Included

Greg Weik
Property Manager
Pro Member
Posted
  • Property Manager
  • Denver, CO
  • Posts 219
  • Votes 285

As others have said, do not have your tenant pay HOA dues (who is the Realtor who suggested this?!)

Market rent is pretty straightforward with all utilities included.  Most websites (Zillow, Facebook Marketplace) have provisions for listing utilities included.  I'd check Zillow for listings in your building since the $525 covers them.  Ultimately, it's worth exactly what someone will pay for it right?  Closely track inquiries and you'll know if you've overshot.  Don't wait more than a week to drop the price if it's quiet out there. 

A word of caution, however, is to never say "all utilities" are included.  You always want to specify that, for example, trash concierge service is not included :) 

Here's how we setup the utility portion of every description paragraph for our listings: 

INCLUDED UTILITIES: Trash Removal.

TENANT PAID UTILITIES: All other utilities paid by tenant.

Post: Buying A Property Management Franchise

Greg Weik
Property Manager
Pro Member
Posted
  • Property Manager
  • Denver, CO
  • Posts 219
  • Votes 285

Have you ever considered starting a property management company?  I started Real Estate Solutions (RES) back in 2008 and I've done the hardest part for you!  By the hard part, I mean the establishment and creation of all the systems, processes and methods in order to be highly efficient and highly profitable in property management. 

Monthly recurring revenue is the holy grail of making money.  

Making money while you sleep, making more money each year than the year before, not being tied to the office, or having your income tied to what you do hour-by-hour of your day -- these are normally the promises of a pyramid scheme!  In my world, they are the reality of running a property management company. 

If you have given any thought to becoming a professional in the most stable, most profitable area of real estate, please check out this article and reach out to me to see if we have a franchise available in your city.  https://resrents.com/thoughts-...

Post: Offering to let tenant out of lease early?

Greg Weik
Property Manager
Pro Member
Posted
  • Property Manager
  • Denver, CO
  • Posts 219
  • Votes 285

I'm glad it worked out for you, I hope she does leave in a timely manner and doesn't damage anything on the way out. 

Letting a tenant out of the lease in a situation like this makes sense, but if it happens again, I would suggest having a more formal process:

-A letter where you clearly state that you have complied with all laws, warranty of habitability, the lease, etc. 

-Tenant has to sign and agree not to disparage you. 

-There should be a finite window for the departure, assuming there is a full lease to be fulfilled/not fulfilled. If the tenant misses the window, you should reserve the right to revoke the offer. 

- Have the tenant sign a Tenant Vacating Agreement, asserting that they waive their right to any possessions inadvertently left behind and that they agree the lease has ended on "X date". 

-Make clear that any damage above ordinary wear and tear (and not the result of any ongoing maintenance issues) can still be claimed against the security deposit.  Whatever your state law is regarding security deposit return timeframes and methods, you should indicate this shall still apply and the clock starts as of the "X date" when you've taken back possession. 

I know it can be easy to think it's all good because the tenant agreed to move out, but in property management, there's always a minefield!

Post: Not keeping old tenant after buying

Greg Weik
Property Manager
Pro Member
Posted
  • Property Manager
  • Denver, CO
  • Posts 219
  • Votes 285

Hi Sara, terminating a month-to-month tenancy can vary by state and by the length of the original lease (it's not always as simple as a 30-day notice, but usually that's all that's required.) 

Do you have a copy of the tenant's lease that you are seeking to terminate?  If there previously was a lease in place and that lease defaulted to m2m, the original lease terms will apply.  The tenant's performance, post lease expiration (rent payments, utility payments, etc.) are constructive evidence of this from a legal perspective.  

There is no formal language typically required on notice to terminate a month-to-month lease (which is any lease that has expired or was not in writing), and you are not required to tell the tenant why you are terminating their lease, either (I recommend you do not volunteer this.)  Reference the date of posting, the tenant's name (and language that addresses "all other occupants"), the property address and certify that the notice has been hand-delivered by you or posted in the tenant's absence.  Take a picture of the posting if not handed to the tenant.  If you have the tenant's cell number, text with them so you have a written trail also (this can come up in court and in my experience, judges are largely accepting of any written communication to paint the context of a situation.) 

You'll need to do a quick search of your state's laws regarding month-to-month leases and review the lease in place, if there is one.  Most likely, you'll need to post or deliver (or possibly email, if there's a lease that allows for it) the notice of termination, with a required vacancy date of 12/31/2020.  

If things go sideways, and the tenant won't leave, be prepared to hire a PM company.