All Forum Posts by: James Kojo

Does anyone else find the daily emails hard to read due to the formatting? They are center-justified, and have the author name first.

How about if they were left-justified, and had the topic name first?

Here's an example of what I think would be much easier to read:

The following new topics have been added to Tax, Legal Issues, Contracts, Self-Directed IRA:

• started by Peter Bardou
• started by Paolo Nascimbeni
• started by Leo Gonzalez
• started by Kaushal Patel
• started by Nic Bernal
• started by Daniel Gutierrez

Here's what the current email looks like in my browser:

 NYC.B stands for "NYC Boroughs." I actually have no idea what that means, but apparently it's a little bit south-west of Manhattan.

@Andy S.

I currently work with 4 different PMs in 3 different markets. 2 are great, 1 is questionable, and 1 is yet-to-be-seen because I just brought them on.

What I can say is this: the #1 signal that a PM is on top of things is the level of communication and responsiveness they exhibit to you (the owner.) Do they return your emails and phone calls promptly? Do they reach out to you proactively when issues arise? Do they call you when you forgot to order the annual survey or whatever?

So, when I interview a PM, I always follow-up with an email with a random question that I didn't ask on the phone. It doesn't matter what you ask. what matters is that they respond to you in a timely manner. I've had PMs that sold me the world on the phone, after I followed up with them via email AND voicemail, they couldn't be bothered to return my correspondences (some people prefer one media over another, so make allowances.) If they aren't returning your calls, then the probably aren't returning the calls of your tenants either.

To answer your specific questions: I never visit properties. Partially because a lot of my properties are out-of-state, but even those that aren't, that's not how I want to spend my time. What I will do is that a property sits on the market for a while, I'll ask the agent/broker who sold me the property to swing by and have a look at it and let me know if they have thoughts and feedback. That has proven to be helpful.

For my class-A properties, I have a 6 or 12 month survey in which the maintenance personal walks the properties and fixes any small items, and reports anything larger. I haven't quite decided what I want to do with my class-B properties, but I may do an annual maintenance survey as well.

Hope that helps!

James

Yeah. I live in the SF area, so now you guys know why I'm always trying to find out more about your target markets. I'm trying to diversify out of the SF/Bay area! :)

@John Norcross : For posterity, the above was lifted from the Cushman & Wakefield Mid-2017 U.S. Capital Markets Reports.

Glad it helped.

James

My research concurs with @Nick B.

@Troy Sheets Most syndications that I've looked at (and invested in) have a 50K minimum. I've talked to a few folks who would do 35K as a one-off for special situations or for return investors. 100K is not out of the question, but you'd be limiting your field.

Many investors will want to know if they can invest there IRA money in your deal. Do your research and have a good answer ready!

Hope that helps!

James

Hey, @Tiffany Bishop : It might help if you identified a few markets that you are specifically interested in. What has caught your eye?

James

@Tony S. : Great question!

Firstly, the most important thing for you to do: keep moving forward! You have a list of things to do. Make sure you're doing something on that list every day. On days you're not doing something on the list, spend some time reflecting on what's working and refining your list.

You correctly identified that the market is hot. That being the case, the most important thing to spend time on is deal-flow. Where are you sourcing your deals? Brokers or direct marketing? Either way, concentrate on activities that get deals on your desk. If it's brokers, make sure you're contacting them on a regular basis. If it's direct marketing, make sure your methods align with your goals, and you're doing activities which make your phone ring.

Don't wait to start vetting your team. The most important is your PM. Have a PM ready to go that fits your strategy. That will also help you source deals in that Brokers will take you more seriously if you're working with a PM that they've heard of, and hopefully so will lenders. second, start making contact with lenders to see what type of deals they like to do, and why terms they offer. They are all different, so you should know who to call for each kind of deal you may encounter.

Finally, have a general outline of what you will do when you land a deal. You don't need to know everything in advanced, but have a plan, and run it by us! If you don't have a plan, I can share one with you.

Hope that helps, and go get'em!

James

@Mike Ferguson : The simple fact of the matter is that turnovers are expensive. There is cleaning, paint/patch, repairs and carpet. Often there is vacancy time and a leasing fee to boot.

I can't say if $500 for a turn is expensive or not, as it really depends on the nature of the work and cost of materials + labor in your target market. I've paid up to 2K for a turn on some of my class-A SFRs just for the make-ready component.

So, basically expect to be paying some money on every turn.

The trick is to know what's actually necessary and what's not. I've heard some PMs who recommend a full repaint on every turn, which is outrageous. You should do a full repaint when you buy it, then do patch and touch-ups on turns. Expect a full interior repaint every 3-7 years, depending.

I would recommend you ask your PM to itemize the work, and see if it sounds right to you and other landlords in your area.

Regardless, you should always understand your PM's financial incentives. Do they make money on maintenance items? Does the fee structure incent them to turn every year, or have long-term tenants? What's the relationship between them and the people doing the work? Etc.

Hope that helps!

James

Meh. I'm not all that worried about it. :)

I think on the margin, it will have an effect, but it doesn't pose a systemic risk to the overall CA market.

Here's my thinking: Many people who are buying the $1M+ homes are already high-income earners, and W-2 at that. Even before the recent changes, the mortgage deduction starts phasing out at around $250K and is completely gone at $450K for a married couple (don't quote me on those thresholds, but you get the point.)

That means for couples making more than $450K, there's zero difference for them. And even for those middling-high income earners (say 250K), they're not targeting homes that much above the $1M mark any ways and they would only lose an increment of their previous deduction.

In terms of adjusting my portfolio: no. I never thought it was wise to hold $1M+ SFH in my portfolio even before the change. I would much rather have a $1M multi-family, which shouldn't be effected as the end-buyer is a fellow investor, not an end-user.

I'd be interested in hearing other people's thoughts as well!

Hope that helps

James