All Forum Posts by: David Krulac

@John Williams Just bought a property in Clarksville, might be 1% or close to it, I'm projecting 0.00919%, so close but no cigar.  I like Clarksville and Nashville, when I was in the capital this year I counted 16 construction cranes in downtown. Davidson is the fastest growing county in the state and 6 of the 7 fastest growing counties are surrounding Davidson/Nashville.  The one fastest growing county not in Middle TN is Knox County at Knoxville

@Alan NA I've been investing in Central PA, which includes the fastest growing county in the state, Cumberland County.  Prices are up here, as well as rents, but rents haven't kept pace with prices.  To find higher returns and lower prices, I'd suggest looking counties more rural, at least 50 miles away from any metro area, beyond commuting distance from any large job center.  Perry County, PA could be one such county with a population of 46,000 and a density of 83.1 per square mile.  There are no hospitals and in 2010, Perry County got its first traffic light.  The eastern part of the county has more population and is commutable to Harrisburg, while the western part is more rural. Prices are lower in counties that have little to no growth.

@Chris Grenzig  The chart on Wikipedia is interesting, its showing the population gains/losses from 2020 to 2023.  For each of the SMA you can see which areas are growing and which areas are declining.  Within each MSA there are pockets of increases and decreases, which are counter to the overall growth or decline.  But for me I'd rather be in a growth area than a declining area, but thats just me.

@Harsh Poshti  You do need to check with the local zoning office.  At one of our areas of mixed use, no residential is allowed on the first floor.  First floor must be commercial and must be ADA compliant.  Even units in the rear, not visible from the front street are not allowed to be residential and must be commercial.

@Nathan Gesner  Don't believe everything you read, especially on the web.  Most of our properties are in the fastest growing county in the state.  Lots of building going on, and lots of jobs.  The number one employer is the state government, because the capital is next door, and the number two employer is the federal government, both are not cyclical and don't fluctuate, if anything their job base increases.  Other large employers are health, education, as well as transportation and warehousing.  There are drops in other areas including big cities and rural areas and areas that are losing population.  Pittsburgh's current population is 302,000 (US census estimates 2024) whereas in 1950 it was 676,000.  Philadelphia's current population is 1,600,000 versus 2,071,000 in 1950.  Pennsylvania is still the fifth largest state after CA, TX, FL and NY and covers a large area with different sub-economies.  I've looked at the fastest growing areas in other states and while I think you can profit from real estate everywhere, perhaps with a different strategy, investing in the fastest growing areas in the state seems to me to give an edge or a push in the right direction.

David Krulac

Bigger Pockets Podcast #82

We have not experienced any rent decline and rents are continuing to increase. Some rents have gone up as much as 22% this year and 40-50% or more since Covid.  The last rental we filled this month was vacant for about 2 weeks, then filled at a higher rnet than the previous renter at that location by 18%.  Costs have escalated sharply, water up 25%, electric up 30% and natural gas up 33%, and at one property insurance went up 400%. People are staying more, moving less since COVID, which means less rental inventory, increased demand and higher prices particularily in the lower and medium priced markets.  Have seen some price reductions from asking rents or higher priced segment of the market.  We try to keep good tenants for long term, an dhave several 30 year tenants and a 24 year tenant and average 12.5 years over the portfolio of existing properties. I can't remember the last time we lowered any rent might have been in 2008 or earlier. 

@James Harryton Look on Craigslist, Zillow, Redfin, Rentometer, and other online sites to see what others are charging for rent in your area. The MEDIAN rents (50% higher, 50% lower) for the entire country are surveyed, collected and posted by HUD on their website www.HUDuser.org by either county or zip code in all 50 states.

@Todd Kozak  The Federal FinCen new regulation called the Corporate Transparency Act (CTA) requires ALL LLCs/Corps to register by December 31, 2024.  The penalty is $500 a day up to $10,000 and two years in Federal Prison.  FinCen not having your correct "STREET" address, no PO Boxes, and no private Boxes are allowed, and you would be in violation.  For this fine piece of legislation, designed to stop money laundering thank Senators Warren and Sanders.   There are exemptions for LLCs/Corps that employee more than 20 employees or have annual income of more than $5 million, because every body know money launderers never have more than 20 employees or make more than $5 million a year.

The first 11 properties that I bought were all 100% financed in one way or another.  And the first property was a house hack where I rented out bedrooms to cover mortgage, while living there for basically free.  First purchase story with first 6 months no mortgage or rent is detailed in Bigger Pockets Podcast #82.

The Fair Market Rent (FMR) on the HUDuser.org website is the Median Rent for the are based on actual rent surveys. I have been a participant in their survey, as well as a Section 8 landlord. The Median Rent ia the middle rent with 50% above and 50% below. That rent does include utilities, so the more utilities included in the rent the more Section 8 will pay for rent, but not more than the Median Rent. For the individual renter their income determines how much Section 8 will pay, not to exceed 40% of the tenants income. Almost all of our rentals are above the HUD FMR and therefore are no Section 8 eligible.

I'm not waiting for the elections to determine my investment actions.  Yesterday I bought a house, to be a rental.  I also have a rehbbed house under contract to sell.  So, I am both a buyer and a seller at the same time, right before the election. I'm always a buyer and always  seller, and have bought and sold over 1,000 properties for my own inventory.  I've bought houses during 9 presidential terms and expect to buy and sell property next year no matter who is the president.  I don't care if the market is up, down or sidewise, I'm still a buyer.  I bought property in 2008, 2009 and the last year that I didn't buy a property a California actor was President.