All Forum Posts by: Sam LLoyd

Of course, you have to listen to all the biggerpockets podcasts.  My next favorite is wheelbarrow profits.  Jason Hartman also has some good content in his podcasts.  Another one (non real estate) that I like to listen to is mad fientist... though it's more about frugality and saving rather than investing.

If I told the bank I had cancer, so I'll pay the mortgage tomorrow... and kept saying that, I'd lose my house.

For future reference, you have to start the eviction process right away.  It sounds like you might also need to have local people available.  There are management companies that will evict/fill units for a one time fee... that way you can hire them to evict the bad tenant, and maybe clean/fill it if you can't be there, and then you can take over again later if you want to.  Or, maybe your condo management can put an eviction notice on the door rather than the 'please call' notice.  Either way, be prepared for this to happen again by making those contacts first... you'll be able to sleep better moving forward.

That said, your story definitely implies to me that the tenant isn't too worried about paying rent.  Maybe she has something lined up a week or a month away and didn't feel like paying the last couple months.  Even a person on their death bed, if they have any integrity, can follow through with their promise to make payment.  If she had real hindrances to being able to pay, then she wouldn't be making promises to keep you hoping.

My thought is get the mortgage with the best terms.  I'm guessing that's going to be one against their primary residence.  This would probably also be the simplest route.    I'm also guessing that this would be the fastest option as well, assuming they wish to close quickly and not let the deal get away.  Or, if they have the cash for the purchase... they can close, and pull money out of their own house on their own timeline... rather than have to get the financing pushed through before closing.

End of story:  I finally saved up enough money to sell it at a 30k loss to a neighbor who bought it because my ugly building/tenants were scaring away his good tenants.  Given market rents in that area, even if I had put the money into rehabbing the whole place, I don't know if I would have ever gotten the money back.

@Brian P.  I never spent the money (coming from Alaska) to go see the property, so I can't say that the new PM was good... or just a lot better than the 1st one.  What I think, is that the property was on the wrong side of the quality curve... too far down the death spiral.  With enough capital going into the building to give it a face lift, take care of recurring maintenance issues and start with good tenants... I think they could have maintained a decent occupancy/maintenance.  The cost of getting the building to that condition would have been prohibitive.  If I had put the 30k into rehab rather than selling (from a distance), probably would have brought the building around the curve and been able to make a slight positive cash flow.  Also, if I had put the 30k into closing a refinance, it probably would have made a little money as well. There were just too many variables, and it was a very stressful situation. 

I just looked it up... looks like it's up and running.  I hope the new owner is making money with it.

Everyone has their own opinion, here's mine:  It depends on your skill level and where you are at in the game.  For example:  On my first flip, I had some contractors bale out on me and ran out of money since I decided to upgrade the house more than my original plan.  That and the fact that I had experience and skill in all those areas.... I did a lot of work myself.

It really comes down to time value and opportunity cost.  I enjoy building countertops.... but it would take me a couple days.  Better to spend my time getting the house ready for countertops and let someone else install them.  I've installed carpet and tile before, but the installation cost of carpet... I'd be paying more money after renting the tools... not to mention the time.  I enjoy painting, but there are some young guys from my church that can do a good job with supervision...  Now, when it comes to electrical and plumbing... where I am, I don't need licenses or permits, so I do that myself instead of pay outrageous contractor rates.

So... how much is your time worth?  What I meant by where you are at in the game is this:  On my first rehab, I did everything... it took me 6 months full time.. and I didn't have kids then.  Now, I don't do flooring.  I keep telling myself I don't do roofs, but I think I'll be doing one next weekend... easier for me to just go do it than go find a contractor, try to convey what I want, pay their rates....  I don't do painting unless I'm in a time crunch.  It's better for me to be at my day job, working on a new deal, or spending my time with my kids than it is for me to be doing these projects on a property that's making enough money to pay for them.

I was in the exact same situation 10 years ago.  I bought a 4plex in another state with a partner, and lost many many thousands on it over the next 4 years.

I think there were two main reasons I lost so much on this deal.  1st:  I was new to real estate investing.  I had read many many books, I had my calculators up and running, but I just wasn't being realistic with maintenance and vacancies, and the whole process.  Maybe if I had brought down the purchase price because of what I know now, it would have been a wash instead of a loss.

2nd thing:  People.  This is very very important.  My partner was the one that visited the property, and picked out the management company.  So, if you're working with someone that has income (and can prove it) producing property in the area instead of someone who flies across the country and know as little or less than you do... you'll do better than I did.  If you find a management company that doesn't wait six months, and then ask you if want them to get a unit ready to rent... you'll do better than I did.  I ended up finding a different management company that did make an effort, but it still wouldn't make money.... too far down the death spiral.

Summary:  Yes, income property in other states can be great, IF you have experience and/or are working with good people.  That being said, though I don't live in a market as expensive as the bay, I have been able to find deals and make things work locally with the more I know.  It might take a while, but depending on what your goals are, you could wait to save that down payment/build credit... wait for the market to be favorable... and practice looking at deals until you find one that works in your own area.

I hope this helps

If this tenant was told (on paper or verbally) that they would be the only tenant using the laundry, then you have to honor that.  Either unit 3 will have to use a Laundromat until your tenant in unit 1 leaves, or you'll have to agree on some sort of compensation for the service (not needing to share) that you're taking away.

If the tenant was told when they moved in that the laundry would be shared, tell them you're glad they got to enjoy sole use of it for so long and get over it (nicely). 

Lastly, if you're not sure they were told, and you have nothing in writing... Go with your gut and stick to it.  I would ere on compensating them for the sharing myself... maybe if you buy them laundry detergent for a year or something.... For my market though, tenants rarely stay more than a year, so I would be putting a more sharefull tenant in before too long any way.

I hope these thoughts help

I just use a better worse than checklist.  For example:  The 1bd units in the place I'm looking at are smaller than a comp that is renting for $750.... therefore it's less than.  If I get enough comps, focusing on the major differences, I'll eventually narrow in on a market rent.

So, if your property is in a neighborhood of 4plexes and the comps are not..... your's is worth less... now go find a comp that does have 4plexes in the neighborhood that has a nice driveway.  If yours does not, then your's is worth less than.....

In the end, trying to assign very subjective values to these things is what the appraiser gets paid for.

The only thing I can think of is shop around for different insurance, and make sure your property tax assessment is at or below the appraised value of your refinance.  Other than that, you'll have to either pay down the mortgage and refinance again, or try to raise that rent to make the cash flow positive.

First thought is that this depends on your market.  For example: if every other house on the market has hardwood floors and tile.... then it will be harder to attract the best tenants with worn out linoleum.

That being said.... assuming you are in a market similar to mine as far as that goes.... I would leave the linoleum if it doesn't look that bad.  If you're replacing the flooring in the master bath anyway, go with the tile if the quality will match the rest of the room/house.  I personally like carpet in bedrooms, and it is cheap to start with/replace.  I also don't like laminate on the stairs, so I'd go with carpet there too.

Another thought:  You get what you pay for.  I've worked with several grades of laminate, and if you stay away from the very cheapest, you'll probably notice more wear after the fist few years (or weeks).  With carpet, I usually go with one of the more expensive carpets instock at Lowes, and upgrade the pad.  When the tenant walks in onto a floor with better padding and denser pile... it just feels more comfortable... and it should last an extra year or two.

Hope these thoughts help.