All Forum Posts by: Immanuel Pierre

Does anyone have experience with property managers and renting by the room. I have a 3 bed 2.5 bath 1100 SQ/ft town home that I am currently house hacking. It is very high chance that I will be negative cash flow due to increase property insurance and HOA. It is located in a desirable area (Pembroke Pines, Fl), that averages rents from $2990-to $3600 depending on amenities. However if I rent by the room I am predicting being able to ask for $1200-1500 per room (1500 for master 1200 for each bedroom). I considered selling but it is my last option. I have the cash flow in my budget to eat around $700 if need be, but this is not ideal because I am looking to scale. Just looking for experiences or suggestions from others who have handled a similar situation.

Take Home Pay:  Approx $105K/Year

Moving to Colorado in the next 6-9 months 

Living with a friend for extreme discounted rate 

Own two homes, one in Colorado cash flows around $250 , one in Florida (property of topic) [Mortgage$3200 HOA $440]

Hey, does anyone have any advice on finding a tax agent? I did a quick google search as well glanced on Bigger Pockets. Kind of was left with too many options so really need help narrowing the decision down. 

I recently bought my second house hack in October 2022. My roommates/tenants are my mother (recently divorced), my sister (over night nurse, who spends most days at her boyfriends), and a coworker I have known for years. Before buying the house everyone knew the terms and what the living situation was going to be. My friend just recently came back from Colombia (within a week of this post) and I did not charge him while he was away. Everyone knew this. Upon his return my mother and sister have both asks if rent would be the same amount because there was an extra person paying now. I thought this was a little odd to ask and was not sure how to go about it, so I told them that it was the same and I did not really expect to change it. Neither of their quality of life has changed, I volunteered to give up space to accommodate the additional person. So my two questions are, Was it a reasonable question for them to ask does the rent change when they knew he was eventually moving in? Should I lower the rent amount since there is an extra person now? 

Rent is $1100 each and the mortgage plus HOA comes out to $3300. I have been covering utilities.

Quote from @Patrick Drury:

@Immanuel Pierre
I would definitely get a property manager for the property out of state. A lot of people that I have seen try managing without one don't end up working out. 

 I have heard a lot of horror stories about self managing out of state. One of the first people I had that told me about real estate had out of state properties. He told me the happiest day of his life was when he sold everything. He did not have a property manager. Morale of my story is I am definitely leaning toward a property manager. 

Quote from @Soh Tanaka:

Regardless of the size of your portfolio, you can continue to manage on your own. If you think about it, there are companies out there that manage thousands of properties. You can do the same. 

I also know a lot of landlords who hire a property management company even though they only have 1 unit. There is nothing wrong with that.

The questions you should ask are, "Do you like managing properties?", "Do you have time to manage properties?" and "Do you know how to manage properties?" If you answered yes to all of them, then you can continue to self-manage. If one or more of the answers is no, then think about hiring a property management company. 

On a side note, I don't like the idea of "property management companies will do a better job than you." This is coming from me who runs a property management company. Just like in any industry, some are good and some are bad. 

Thank you for this. I do have to reframe that question. Guess I will have to try self managing to see if I like managing the property or if it is plausible for me to manage the property. I also agree with you about property managers, I definitely do not subscribe to the idea that they can manage better than I can. The angle I was coming from was more of the is the juice worth the squeeze to self manage or should I take a slight monetary loss for a potentially large gain in time.

Quote from @Nathan McBride:

Most people are capable of handling the day to day operations of a couple of rental properties.  And many feel they would rather keep the manager's fee in their pocket as cash flow.

I was of that mindset starting out, first with my spreadsheets then a free online management software; first with doing my own maintenance, then hiring out.  I feel like it is the natural progression of a real estate investing career.

What most (including me starting out) fail to recognize is you may not be assigning a proper value to your time.

Your time may be better spent working to increase your income to buy more properties or in finding new properties through networking or creative means.

Plus you don't want to get to the point at which the stress of operating your rentals is holding you back when looking to grow your portfolio.  My portfolio rapidly expanded and quickly overwhelmed my rudimentary systems, leading to stress and a certain amount of burnout. 

I then hired a manager basically out of desperation, and it did not go well.  In fact, it was such a bad experience that I ended up starting my own management company with a couple of partners.

Again, all of this is from my personal experience - others may see it differently.  

Another benefit of a mgr is the fact that they should be able to help you as you evaluate properties to purchase (rent comps, repair estimates, etc.).  A manager probably won't want to do this a bunch of times for someone who is not a client, but if you have a relationship established and the manager knows you are serious as a buyer, he or she will likely be willing to help you with your numbers.  I know I help clients all the time with rent comps, etc. for properties they are considering buying.

TL;DR:  Hire the right manager early and definitely not after you are already overwhelmed.

The number one thing I took from this is higher the PM before you're stressed rather than finding a PM once you're stressed. I feel like that helps take the emotion out of the hiring process. Thank you for the response !

Quote from @Gavin Little:

@Immanuel Pierre I work as a PM in Oklahoma and many investors like yourself ask me this question all the time. There is no correct answer. If you enjoy self-managing and it isn't eating up much of your time, I would say continue until that changes. However, in my very biased opinion, a PM provides much more value than simply managing your property. For example, we take professional photography to aid in the leasing process, put tenants through a thorough screening process, handle small repairs to large renovations, represent you in any potential eviction issues and can also assist with the buying & selling of your properties. If you ever have any PM-related questions, don't hesitate to reach out!

I love this response. In short it looks like PMs handle all the head aches when it comes to REI. Which is why I am leaning towards getting one moving forward. I was only hesitant because I have not experienced any major head aches yet. However, I know those head aches may be coming soon. I may have a personal bias that it is like a right of passage for investors to self manage early in their investment careers. Although I know the big time investors never self manage. In short I have an angel and a devil sitting on my left and right shoulder every time I think about this topic pulling me in either direction.

Today I own two properties, one is a long-term rental and the other being my primary resident. I am looking to buy a third within the next  6-18 months as a long term rental. I am leaning towards just getting a property manager for this place although I do not have one for my first long-term rental even though it is out of state. My thought process is I am getting into real estate for more income and looking to reinvest the profits back into real estate. So if I want to scale self managing is not the way to go. But, I have been self-managing up until this point and it has not added much additional stress to my life. Just looking for others personal experience and thought processes on the topic.

This was an awesome post ! Questions where did you buy this house hack I do not know if you mentioned but I am assuming around Philadelphia? Also when did you buy this? I bought back in 2021 a condo and have a 2.75% on that. I am looking to refi or get a HELOC but I have a few personal financial goals I want to hit first so I am prepared to combat the potential low cash flow I may see as a result of the interest rate hikes. Again thanks for the post this looks like a great situation, I am looking forward to your response to those questions.

How many times are you able to access a VA Loan/FHA loan without refinancing previous loans? For context, I have used my VA loan twice, both as primary residents. I bought one at my second duty station then my second home when I got to my third duty station and about 18 months after the purchase of the first. I am still at my third duty station, but I want to continue to grow my portfolio and looking to buy another home in the same 18 month time frame. The first two homes were house hacks and the third will be as well. I also save enough to where I can save for a 20% down payment, I have also thought about HELOCs or refi's. But, if a FHA loan was a possibility that makes the most sense for me because I can save for 3.5% down payment and closing cost extremely and I can keep the refi/HELOCs in my pocket as options for acquisitions in the future. Apologies for the long post but all feedback is welcomed !