All Forum Posts by: Jeff Copeland

We recently started offering coliving property management in St Petersburg, Florida (in addition to our portfolio of long term rentals), and I'm not sure exactly what you mean by "the importance of household" or what you mean by "household-led property management". 

These are interesting buzzwords, but I actually don't think there's a fundamental 180-degree difference between coliving, mid-term, and long-term property management. 

Our role as a property manager is to:

1) Put the right people in the units; Meaning well-qualified applicants who have stable income/employment, positive rental, credit, eviction, and criminal records, and are a good fit for the property, while staying within the scope of fair housing laws. 

2) Minimize vacancy and turnover

3) Maximize rent and rent collections (and provide the tech to make this painless and easy for tenants and owners)

4) Maintain the property and curb appeal (and provide the tech and staff to make maintenance responsive and relatively painless). 

These goals are the same for LTR, MTR, and coliving.

So I'm genuinely curious where "foster the household's sense of community" or whatever falls on your list of priorities, and what are the specific things you are doing to make this happen?

Don't get me wrong: It's wonderful that your tenants give each other rides and bring each other soup when they are sick. But I'd argue this is just the nature of living with good people (and my job as a coliving property manager is to put those good people in place). It's not something we taught them or fostered as their property manager. 

 When I first read the subject line of your post, I was expecting to read a gripe from a novice investor who wanted his agent to submit 20 offers per week at 60% of asking price. (We actually get that fairly often as investor-friendly agents, lol). 

But that is not the case here. An offer of $355k (or even $340k) on a $370k listing that has been sitting on the market for four months is not unreasonable on the surface. 

But, to be fair, it's also possible that you agent is speaking to the listing agents to feel out the situation, and being told things like "Don't waste your time, the seller just rejected an offer of $365k this morning. $370k is truly his line in the sand". (This happens all the time as well) 

So I think your first option is to have a heart to heart conversation with your buyers agent, explain your frustration, and ask him to explain to you why he won't write up these offers. If he doesn't have a solid answer that is to your satisfaction, then you are obviously within your rights to move on. 

And finally, "the agent who sold us our primary residence who we really liked" is often not the best fit for you when you decide to move forward as a real estate investor. Investing is different, and requires an agent with a different skillset. It's nothing personal. Business is business.

As an experienced property manager, I have no qualms about one-bedroom units. Steering clear of them is outdated advice in my opinion. 

One bedroom units are very popular and easy to keep rented to single people and/or couples, because they are usually a relatively low cost housing option. They experience much less vacancy that a 3/2 home, for example. 

I do, however, have qualms about leasing to homeless or near homeless individuals (veterans or otherwise). Let me be clear: I am a retired military veteran myself with 22 years of service, and I do think it's a noble and honorable idea for you to want to help homeless veterans with housing. 

But I am also an experienced property manager with experience with the VA's VASH program, as well as similar programs for non-veterans. As such, I have grown jaded over the years and can tell you that in my personal experience 90% of these tenants don't work out. Often due to non-payment as soon as their benefits run out, and other times due to drug and alcohol abuse or mental health issues.

Just make sure you aren't looking at it through rose colored glasses, and understand what you are getting into. Managing tenants on these programs requires 2-3 times as much staff time and energy as managing a normal class B to C rental, and these units will very often experience much higher vacancy, collection, and eviction-related losses. 

That doesn't mean you shouldn't do it. These are just the cold hard facts. 

The answer to most of your questions will be determined by Zoning. 

The zoning for your parcel will determine:

1. Whether you can have an ADU.

2. What size it can be in relation to the primary residence. 

3. Where it can be located on your parcel (front yard extremely unlikely).

4. How many you can have, if any (there are likely density and impermeable surface area limits). 

5. What it can be constructed of (for example, some municipalities require an ADU to be of the same construction type, look, and feel as the primary residence).

And yes, it will absolutely require permits - Even if the building didn't for some reason (which is highly unlikely), you would still need water, sewer, and electrical connections at a minimum. 

Wat do you mean by "partners"?

I initially assumed you were looking for financial partners to team up with you and buy real estate, but your comment about there being "very few RE Agents" confused me a little. There is no shortage of investor-friendly realtors here on Bigger Pockets. Most of us are just careful not to self-promote because it's against the forum rules. Bigger Pockets even has a Featured Agent program where you can search for agents in specific areas (click on the "Find an Agent" tab at the top middle of this screen). 

Likewise, there are plenty of people on here investing through partnerships and syndications. What exactly are your questions or needs in that regard?

As far as where to find partners to team up with, the best place to look is your own network of people you know and trust, and you can get to know more of these through local face-to-face investor meet up groups. 

It depends on what the contract says. 

It is customary for the seller to pay the property taxes up through the previous year, and then the taxes for the year of closing are prorated. 

But this can be negotiated different ways. The buyer could offer to pay these to sweeten the deal, or raise the purchase price accordingly to cover the cost of the back taxes.

This is a great example of why investors should never prepare their own quit claim deeds (and in the  majority of cases, you'd never want to use a quit claim deed anyway, when you can use a warranty deed instead). 

Compared to the risk of ruining a chain of title (and the potential cost to correct it years later), the cost to have an attorney prepare a deed correctly in the first place is ridiculously cheap!

It really depends on how much equity you have, compared to the closing costs and rate/terms of the new loan. 

$30k isn't a lot (because you can only access 75% of it on an investment property refi), and capex such as roof and HVAC usually don't impress appraisers in terms of adding value to the home (these are just things that all homes have that need to be replaced at certain intervals, they aren't really much of an improvement in terms of appraised value). 

For argument's sake let's say you paid $300k, put 25% down, financed $225k of the purchase, it appraised for $330k, and it's now worth $350k. 

You could pull out $262,500 at 75% LTV (75% of the current value of $350k)

After paying off your current mortgage balance (let's assume you now owe $220k after making several months worth of payments), you'd have access to $42,500 in equity. Minus closing and origination costs on the new mortgage. 

If your closing costs are $7,500, that's 17% of your available equity eaten up by the refi costs. It might make sense to wait until you have more equity. 

Then again, it also depends on what you plan to do with the remaining $35k. If that enables you to invest in something else that is a home run, then it might be worth it. Only you can decide. 

But, as you can see, the closing and origination costs are a huge factor when you don't have a ton of equity to pull out. 

A couple of other factors to keep in mind:

1. Rates are in the low 6's right now, so getting a lower rate is unlikely (at least not low enough to justify the costs or save you any significant money). If/When you can get a lower rate, this often justifies the closing costs on the new loan (if you can recoup them through lower interest payments within 2-3 years, for example). This does not appear to be the case for you right now.

2. Your old appraisal is irrelevant. The lender will have to order a new one, and not only has the market changed a lot since last year, appraisers also tend to be more conservative on refi appraisals. So it's possible you end up spending $600 or so on an appraisal only to find out you don't have as much equity as you thought. 

You'll have to set the permissions on the link in Google Drive to "anyone with the link" can view.

Unable to see the video. But to he honest, it's not going to be possible from a video to tell if a shower pan is cracked all the way through. If it's leaking, it probably is. And if multiple contractors have told you it is, it probably is. 

Your approach to your other questions will likely depend on whether it's the only bathroom in the house. 

If it is, you'll likely have to abate the rent or provide temporary lodging for your tenants. 

If it isn't, it's not unusual at all for contractors to work in an occupied home. If you were remodeling your own bathroom, would you move your family out of the house?

There might be some quicker/cheaper options, such as Bath Fitter (no affiliation, and not event a huge fan...but any port in a storm, right?).

As far as financing it, there's no secret solution, but here are a few commonly used options:

Credit Card

Home Depot or Lowes Card

HELOC

Trade Credit such as Hearth, Joist, or Dividend Finance (these are often offered by the contractors themselves). 

You can use it. But you'll most likely have to pay capital gains taxes on it if you do. 

Your QI will distribute it, and report it to the IRS, as "boot". The tax hit on $25k shouldn't be too excessive (and you may be able to offset it with other losses). 

Tagging 1031-Guru @Dave Foster to see if he has any other creative solutions for you.