All Forum Posts by: Isaac S.

THAT'S IT! I have had it!

i'm going to sue everyone in this thread for being way smarter than me and giving you the advice I wish I had gotten before the many times I have received the same threat!

But, really...they are all right...you have zero to worry about if you are operating within the law and keeping accurate records. 

Real estate is like having a retail store, you never know what nut job is gonna walk through the door next.

I saw a Warren Buffet interview that he was asked if there was any one important thing he could teach new students, what is it?...his reply was the "...the power of compounding"

This has always helped to remind me that every little saving or extra profit I make does not necessarily make or break me, but, at the end of a year, decade, or life...the effect of compounding the total of those savings, earnings and interest can make a huge difference.

also,  Los Angeles is HUUUUGGGGEEEE! There are identical square foot, type, amenity places in Los Angeles that can rent for $600-2000 month in Watts or South Central, and then $1600-6000 in Hollywood or West LA. I often see impossible pro-forma numbers, that manipulate this reality.

5 miles can be a world of difference as far as potential tenant pool, too.

electric can vary depending how close to the beach, it can be 10-15 degrees cooler in the summer when you are 2-3 miles or less from the beach 5-10 degrees cooler 3-10 miles from beach, and maximum hot summer further inland... so air conditioning use can vary  depending on this.... also, if the heat is electric vs natural gas and the stove too, since NG is much cheaper than electric.

that's my 1.5 cents

Crying profusely seems to work for me....

or just get the proper permits. 

FYI, it's pretty hard to renovate a house thoroughly without being very obvious to a random inspector. ALSO, you will always piss off at least one neighbor that will snitch you out because of the mess, noise, and overall disruption that construction causes.

Hopefully, the tradesman have done the work to code. Depending on how extensive the work, the permits can sometimes save you(if you are unfamiliar with standards and practices) from contractors doing very sub-par work that could get you sued later.

Good luck.

Go to bigger pockets and look up previous posts that have already answered this...hundreds of times

1. be friendly, don't be friends

2. always do credit and background check, i mean it... ALWAYS! No felons, no previous evictions, have a good job for a company that is not going out of business 

3. don't let tenants pay late, require late fee if they do, and don't put off eviction if they keep feeding you excuses. Never let them give vague answers(they say next week, ask them to specify a day/date) or not return calls.

4. Fix things in a timely fashion. Don't be a slumlord.

5. Learn how to fix things. Change locks, electrical outlets, switches, fixtures, etc...even if you don't end up doing the work yourself, you will be better able to understand what's going on and what you are really paying for.

6. Build a dream team. An accountant with real estate specific experience, a lawyer that specializes in tenant disputes(last resort), most importantly a trustworthy ethical handyman. 

7. Sometimes, when all is said and done, its cheaper to just pay a bad tenant to leave, rather than suing and/or evicting. Stop the bleeding sooner and reduce stress in your life and in my experience still cost less than months of non payment during eviction process, legal fees, possible intentional property damage, and a judgement against someone with no assets and probably little/no income. This will depend on your local tenant/landlord laws.

8. Wood floors(faux or real), kitchens, bathrooms, and appliances will always improve your asset...but, not in war zones, it will be more stuff to fix or replace sooner.

9. Use Zillow and Apartments.com and Facebook for your marketing, craigslist is going the way of newspaper classifieds.

10. Raise the rent every year, even if only 1-3% to keep up with inflation. But, dont get greedy and chase off a good tenant by raising it 15% only to realize that 1-2 months vacancy will take you a year to recover the lost income, even at the higher rate. 

There's many more, and much more details to the above, but that's my two cents for now.

Good luck!

I can't believe that cities actually have the bureaucratic infrastructure to enforce such statutes. 

In Los Angeles(my only experience), I have rarely had to talk to or deal with a housing authority rep., the systematic code enforcement is supposed to be every 5 years but usually takes 7-8 years, the annual elevator inspection happens every 2-3 years. 

It would not surprise me if there was a direct correlation between high property taxes and highly enforced housing bureaucracy. 

FYI, Los Angeles County is about 1.1% with a very generous(to property owners) valuation formula.

Also, make sure it is very clean...in my experience a vacant unit can get kind of dusty and need follow up light cleaning if it is vacant longer than a month, especially if it has had a fair amount of viewings/traffic. 

the cleaner the unit the higher quality of tenant and price.

Also, you should get your realtor to facetime or send video of the neighborhood, if your neighbors have furniture or mattress left out at the curb, lots of graffiti, people loitering, or their is a homeless encampment down the street, there could be issues that have nothing to do with your property, but more to do with the immediate neighborhood.

the other suggestions about zillow, gets you on HotPads, trulia at the same time, since they are owned by same company...the other app is apartments.com. I have had great success with these. I have found that generally people using these apps are higher levels of education and income than Craigslist, so it provides a bit of pre-screening too.

I haven't use FB, but have heard the same as others report on this thread, that it is very effective at generating higher numbers of leads.

Lastly, if I don't hit my target rental rate within the first 2-4 weeks, I double check the comps on the same apps that i am listed on and usually find that I'm overpriced and adjust accordingly.

Greek mythology has tons of names with cool back stories. 

Latin has lots of words that are foundation of English and all other latin based languages, perhaps one that relates to good fortune or prosperity. For example the english word for abundance is "abundatia" in latin.

Phrases or words from macro-economic theory. Just read a few wall street journal articles for some ideas there.

Hand tools or power tools or phrases from architecture or from our sector. I worked with a movie set design company called "worm drive", a special type of premium motor for power tools, and always thought that was a cool name.

Lastly, any word or phrase that is related to positive attributes. a word or phrase makes you or others think of things like: trustworthy, reliable, honest, hardworking, fast, intelligent, prosperous, attractive, successful, etc.

as others have mentioned... banks, title companies, insurance companies, lawyers, city inspectors, tax agents, investors, neighbors, tenants, etc will be your intended audience, so pick a name that suits your audience... are you a comedian or an investor? The same people that will appreciate a clever-funny name will also appreciate a clever name in general and most of the people that would be turned off by clever-funny will actually still appreciate a clever reference that demonstrates a higher level education or thoughtfulness.

Just my two cents

1. I am not from Cleveland, I do not mean to insult the great City of Cleveland, I apologize if I have insulted you or hurt your feelings, it is not my intention. I am not interested in investing Cleveland as much as the posters original statement/assertion about hostility towards investors via city policy and then your comment, that so passionately defended these policies, got my attention. Again, I did not mean to offend, harass or insult you, merely offer an opposing opinion/view. Also, if I am not from Cleveland, should I not have an opinion on the topic?

2. I am glad to hear that Cleveland is so actively pursuing business development(since it has been on an economic decline for decades, and is only the 28th economy in the US) with large business such as google, and that they are allowing you to do what you want with your personal property, etc. Thanks for enlightening me to the great economic strides the city of Cleveland is taking. Again, I was previously speaking more generally and not directing any personal or specific attack "maligning" you or your good friends in Cleveland Government, just trying to point out that all governments are meant to serve us, the citizens, as opposed to us serving them or us being liable for things they are not liable for. Again, this was more in line with the general concepts of the discussion that was originally posted.

3. $642.62 is so low because your property values are among the lowest in the country, but the actual tax rate percentage are some of the highest in the country. The reason for this inverse relationship, is because the ratio of home owners(including investors) to government spending/debt is disproportionate, so they must tax the property owners at higher rates(some places as high as 5.5%) to make the budgetary commitments. Also, you pay that annually and lead building products have been illegal since 1978, so, theoretically your property has  generated $642 x 40 years of tax revenue, that's closer to $26,000, of course this should be inflation adjusted, but the point is still the same. Furthermore, the city will be taxing the improvements you make and will continue taxing that parcel, every year, forever.  Of course, I realize that money pays for schools, infrastructure, and government employee payrolls and pensions, so, carving out some of it for lead/asbestos abatement is not very realistic, hence, my reason for posing an alternative solution in the form of tax incentives for small investors to take on properties with those issues, but, good to hear that Cleveland is already doing something like that.

4. Lastly, there is no need to be sarcastic or hostile towards me. I did not mean to imply that all government is bad, merely pointing out the hypocrisy of holding investors liable today for something that the city/county could have been working on for the last 40 years, but they did not take any action or accountability for the problem, they just let it fester. Its my impression that the federal government, local governments and large corporations have done very little to help mitigate these problems, despite government and class action attorneys taking large monetary settlements from offending corporations. Again, this is not necessarily directed at Cleveland specifically, lead and asbestos is a problem in any city that has buildings that are built before 1978. 

You are absolutely correct, forcing new investors to mitigate any and all environmental issue in an asset is one possible solution, especially if the bottom line makes a profit. Apparently, I was unaware of the generous incentives/policies and opportunities that Cleveland has for RE investors of lead contaminated properties, thank you for enlightening me.

If you are satisfied with the service you are getting from your local government, good for you. It's very refreshing to hear that and thanks for sharing your experience.

Best of luck with your investments and with your future and thanks again for your time and careful consideration.

@Gwen Fyfe

Food for thought:

If the city/county does a tax lien and becomes the property owner via foreclosure, why are they not liable for making the improvements? But, the new investor that comes along and buys said asset from the city, is liable?

The city/county plans to tax the asset for perpetuity, usually to pay for infrastructure, OR to pay inflated salaries of administrators and city officials and further grow a usually  inefficient  bureaucracy. 

Since 1978, that local government has known about lead hazards and 40 years later they still have done nothing to fix it, even though that entire time they have been collecting property taxes on those assets. Did they even do as little as offer a property tax break for assets that made those improvements? NO, but they continued to tax the asset and collect revenue.

I think about the phrase "value added"...the investor is ready and willing to put their own blood, sweat and tears and money to add value to the property and on top of that the investors actions will cause the property to be worth more and therefore have a higher assessed value, directly contributing to increased tax base for that local government...how is that local government adding value?

IMHO, the local government is more liable than the new investor for the lead abatement issues, and it is pawning the responsibility onto the new investor because it can.