All Forum Posts by: Gabe G.

@Carolyn W.   One of the reasons, why I still manage myself.

Property management companies take 8 to 10 percent off the top.

Now you hear they pad vendor costs, making repairs more expensive then if i hired myself.

And for what?  I guess my question is, if they are adding fees on top of the vendor rates, and then most want fees for when they do a renewal(for what reason) and then they want a lease up fee.

What exactly is the 8 or 10 percent for, going out the door each month.

And on top of this, most of them will do a crappier job, than you can do yourself.

Just doesn't seem worth it to me.

@Deanna McCormick

I agree with that. However, I work a full time job. So I would be unable to be there.

There concern was having someone there without them or I there.

Which I sorta understand.

However

1. I am sure I have things more of value there, than they do.

2.  This is a reputable company, not some dude, coming in to make the repairs, so their concerns of not being there are probably unfounded.

But overall I agree with you. Unreasonable expectations.

Tenant called on saturday afternoon, indicating there was an issue with the oven and is not working.

I called some appliance repair companies on saturday, but of course most aren't working and returned my call on Monday. I scheduled for service on Tuesday during the day, as the tenant said that was fine. 20 mins later the tenant texts back and says, they won't be there and they must be there while the appliance repair is taking place. One of them gets home at 5:30pm. Most appliance places stop service calls at 6. Giving me a 30minute window to work with. Currently. I have someone scheduled to come out on Wednesday to look at it.

The tenant believes this is an unreasonable turnaround time for a repair of an oven. She says she doesn't know how she is going to eat. Which kinda through me. As the tenant has a microwave and a working fridge, and is within a 1 mile radius of 20 places to eat. Apparently, she spent all her money on groceries, and is out of microwavable food. And she has no money to eat, and no way to cook the food, and it's my fault.  Before we even fix the problem, she is hinting that she believes she deserves a deduction in rent of 15 dollars a day from the time the problem was reported. Which I indicated is not something I can do.

To me this all seems unreasonable. If we were taking heat going out in the winter, or AC going out in some of the hottest days of the year, or no running water. These things I deem an emergency.

An oven going out, while I understand it's an inconvenience, isn't an emergency, however it's something I will get repaired as soon as possible and act on, as soon as I hear the request.

However, Monday is the time I am able to schedule with the companies, then add they are making it hard for a particular time that works for them, the service guy has to come out on Wednesday, if he has parts it fixed then. If not, he has to order parts and it could be a few more days. Considering the oven is only 3 years old. I believe I have an obligation to see if it can be repaired.

I would say  if the oven is repaired within a week, that would be reasonable.

What does everybody else think?  What would be a reasonable turn around time in this situation for your business?

Am I wrong?

I guess it would depend on the area. Talking in my area, where the goal is cash flow.

Getting involved with a partner to me as ongoing thing, does not make sense.

The reason is simple, rental properties if all goes well, provides a pretty small income monthly. In my area maybe 200-300 a month after expenses.  There just isn't enough to split.

Now if you are talking about investing in a 5 million dollar apartment building, having a partner may make sense and there may be enough to split.

But in general, just getting started, there isn't enough profit to split, in my opinion.

@Josh C.  Don't know where you are looking. But the same thing is happening in Indianapolis, rental demand still seems to be strong. However, buying houses and renting out is harder to come by, unless you are looking at a property that needs a serious rehab. Prices are getting too high to make it worth while. You also have the people from California, that are happy to buy a house for 85k, and rent it out for 800 a month. Not knowing, they are probably losing money, and Indiana does not appreciate. They are breaking even at best.

In Indiana, you need a 1.5-1.8 rent/purchase price, to really make it worth it.

@Virginia Jones 

I understand it's hard to tell people no sometimes. I want to do all I can for my tenants. However, at some point you need to earn a return. When someone leases a home, its expected there will be no more improvements, and the house is as is. If you want to do a few things here or there, for good tenants sure.  But the only thing legally you have to do is provide a livable, safe home.

If you are doing that, then you are honoring your contract. Good luck

Shawn is good. I worked with him maxing out my 10 fannie mae properties.

Very quick responses via email.  He is done after 10 though and has no commercial side.

@Jason Scharf

I believe Michael is misunderstanding what you are saying.

He thinks you are saying 10 percent total for all of those.

I believe what you are saying, is 10 percent repairs, 10 percent capex, 10 percent for vacancy, and 10 percent for management.

If this is the case, you may be overestimating

10 percent for vacancy is high for a portfolio in the current market, 5-6 percent is more reasonable currently, with 8 percent probably being a good long term number.

10 percent for repairs and 10 percent for capex is probably a little heavy.

Most likely this will work out of 7-8 percent for repairs a year, and 7-8 percent for capex.

If you want to make it simple, as long as you aren't paying through the nose for taxes and insurance which is your only "known" expense when buying rental property. You can probably use the 50 percent rule to estimate expenses. Simply take 50 percent of the gross rents expected minus the principal and interest on your mortgage= expected cash flow.

If this number is between 150-250 dollars a month, you probably got a pretty good property.

You may do better than 50 percent, but it's a good number to estimate expenses.

@Kyle N.   I am at the 10 limit now.

So right now I am sorta at stopping point, I haven't found a decent commercial lender that wants to do business with me, to continue to grow on the commercial side.

I checked into a blanket loan option. And this won't work either.  If the blanket loan is in my name or an llc, the conventional lender will still consider these financed properties in my name.

It sounds like the gentlemen above, has a way around that, with an s corp, which sounds like the only way to really clear the slate for more conventional.

However, finding a lender that will do a blanket loan, into a newly formed s corp, is probably going to be an issue as well.

So the only legitimate way I see someone going beyond the 10 fannie limit, is if you have a wife that will qualify on her own. Then you could do 10, and she could do 10.

I unfortunately don't have that as an option as a single guy.

So don't know what my next move is.

@Derrick Dill I have done some research into the Philippines. First thing that stands out. Foreigners can't own land. That's why most foreigners that buy over there, buy a condo. Because they can own the structure, but not the land underneath of it. If your family member was a citizen and willed it to you. Maybe there is something different I am unaware of.  

As far as building a 4plex.  Rental rates I am unsure of. However, since you would most likely not have tenants that are foreigners and renting to college students. If these were studio units, or one bedroom. I would expect rental rates of 100-190 dollars a month. Though I am not 100 percent familiar with the area the school is located in. But most Filipinos can't afford much more than that. Only places you see high rents, are places that foreigners reside. Makati, IT park in cebu city, etc.

I would seriously think of taking a step back and really think, if you want to be an owner of rental properties in a 3rd world country. I am not certain on eviction laws. However, I know the court system as a whole is jacked up through most of the country. At least on the criminal side. I doubt the civil side is any different.

It may be best, to just dispose of the land and take whatever cash you can get from it.

Good luck.