All Forum Posts by: Jeff Copeland

It's a widely known fact that many home renovations have a negative ROI (especially high-end, luxury fixtures and finishes).

Kitchen, bathroom, painting, flooring, and landscaping/deck upgrades are usually a net positive (at least 1:1). 

Many others come in a 70-80% ROI. Meaning if you spend $1000, you might increase the value only $700-800.

There are many great articles on this subject (I have no affiliation with any of these):

https://www.renofi.com/learn/r...

https://www.thisoldhouse.com/h...

https://www.investopedia.com/a...

That being said, these ROI numbers are arguably more relevant for owner occupants. If you are flipping a house, you don't always have the luxury of skipping something because it only has 70% ROI. You are selling the "total package", and the total rehab costs will need to be factored into your project.

Already stated multiple times in this thread, but you need to better understand how MLS-Listed real estate transactions work.

1. The seller already agreed to pay the listing agent whatever the total commission is. Say 6% or whatever. This is part of their listing agreement. 

2. The listing broker offers to pay a split to a cooperating broker (usually, but not always, half of the total commission), so 3% in this example, when they list it in the MLS.

3. If the buyer's agent for some reason says "I only want 2%" - in many cases that just means the listing brokerage gets to keep 4% instead of 3%. It's already in their contract. You've accomplished nothing other than lining the listing  brokerage's pocket and short changing your buyer's agent (who still has to split the remaining 2% with their brokerage).

A great buyer's agent is worth every penny, even if you have to pay their commission. If you don't have a great one, find one. If you do have a great one, take care of them. 

I see this question a lot. I'd done hundreds of real estate transactions as a buyer, investor, agent, and real estate broker, and I still don't really know what everyone means by "investor-friendly title company".

You want a title company that will:

1. Follow the terms and conditions and timelines of your contract(s),

2. Perform a thorough title search,

3. Issue a title commitment for the required title insurance policies,

4. Hold and disburse escrowed funds as required by the contract and the transaction details,

5. Manage and close the transaction from start to finish, process the deed/title transfer and mortgages, and record the necessary documents. 

But this is what they do for every single transaction, whether you are a first time retail home buyer, or a seasoned investor bringing them an assignment of contract and a purchase and sale agreement. 

There's nothing particularly "investor friendly" about this. You just need a competent and reliable title company. 

If in doubt, go with your local Fidelity National Title or Stewart Title office. Both are respected national brands operating in multiple states. 

My first call would be to a handyman. If you are managing rentals from 100 miles away, you need one on speed dial!

There are a number of tenant screening services that do a reasonably thorough credit, criminal record, and eviction records check for a small fee (and most even give the option of having the applicant pay for it). A quick Google search will reveal several viable options. 

Ideally, you have this integrated with your (online) rental application, so the data gets pulled in and the screening can be done right away. 

Related to plumbing (and certainly helps to have a background in plumbing) is Leak Detection services. It can be very lucrative, and relatively easy (compared to actually fixing the leak, lol). 

You may be right, but little tiffs like this (with otherwise good tenants) can end up costing you thousands of dollars in vacancy and turnover costs. 

A tenant who might otherwise have renewed their lease for two or three years will likely say "no thanks" come renewal time when they get nickel and dimed for things like this. So you end up spending a couple grand on painting and rent-ready repairs, and eating a month of vacancy, over a $99 service call. 

Choose your battles wisely. 

It also discourages tenants from reporting otherwise important maintenance items ("I'm not reporting this leaking sink drain that's the destroying the kitchen cabinets, they'll just blame it on me and try to charge me for it.").

Finally, it's still quite possible that the oven has an intermittent problem, or a problem that was not accurately diagnosed by the technician (especially if it was a warranty or home warranty service call - they generally avoid making repairs at all costs). 

These tips are rather generic, and you left out some crucial data points:

Eviction Records Check - Most tenant screening tools will check nationwide county court records for eviction lawsuits (sometime referred to as "delinquent tenant" or other similar terms in court records). It is also critical to check your local county court records - It is not unheard of for an eviction case to be pending in local courts, but not yet show up on national database checks. 

Criminal Records Check - Similar to the advice for evictions listed above, check both national and local records, and be sure to comply with the HUD Guidance here. For example, you cannot deny an applicant housing based on criminal charges or arrests (only convictions), and the conviction must present a "demonstrable risk to the safety of your residents and/or your property" in order for you to legally deny them housing.  

It is also crucial that you have published written standards (so tenants can see ahead of time whether or not they should qualify), and apply these the same to every single applicant to avoid Fair Housing and discrimination complaints. 

Finally, when you inevitably deny someone housing, you are required by the fair Credit Reporting Act to provide them with an Adverse Action Notice. 

Realtor (in the sense of a traditional buyer's agent / listing agent) would fall under brokerage. 

The most comprehensive guide I've found is at 
https://www.therealestatecpa.com/guide-to-qualifying-as-a-real-estate-professional (no affiliation)

We recently launched our first coliving/homeshare property (as a property management company) in St Petersburg FL. Here are a few lessons learned:

Zoning: You'll need to do some research with each local municipality. We found that in most Cities, 5 to 6 people in a home seems to be the line in the sand. Below that, it's no different from roommates. If you have 6+ people, some cities consider this a roominghouse or boarding house, which triggers different requirements. Parking is often another limiting factor.

Marketing & Fair Housing: While you can certainly target them with your marketing efforts, you can't limit your property to only nurses, or only college graduates, or only males/females, or impose age restrictions. You still have to comply with Fair Housing laws, and an applicant is either qualified for your rental unit, or they are not, based on your published (and legal) screening criteria. 

In terms of minimizing headaches, obviously you need crystal clear screening criteria as well as established, published, and posted household rules that everyone understands and agrees to up front (and via their lease). These need to be stressed early and often. 

In terms of challenges, the lease-up process is much more involved and takes a lot more legwork. For a traditional rental, you may show it 5 or 10 times, take a couple of applications, them move forward with a lease. In a coliving environment, you might show each room 10+ times, and then reject more applicants (because you don't have as much flexibility with regards to screening, pets, # of people, etc). You also have to educate a lot of people who don't understand the co-living model.

We provide wi-fi only. Most people stream their entertainment these days and cable TV is getting more and more antiquated. 

And yes, someone (such as a property manager) needs to be in charge, obviously. I do not think it would work well placing one of the tenants in charge. 

BTW - The coliving model seems to be more aligned with large single family homes. I could foresee some additional challenges trying to implement it in a multifamily setting. 

Also be sure to check out https://www.biggerpockets.com/...