All Forum Posts by: James W.

@Courtney M.

Not sure if you have seen my post below, but it might be worth looking at if you have not already. 

https://www.biggerpockets.com/forums/48/topics/554815-100-door-debate-sell-me-on-it

Don't buy into the $100/door BS unless you have deep pockets to help whether the changes in the economic cycle.  It is thrown around like it means something but means absolutely nothing unless your main goal is simply appreciation.  Look at it this way, is it worth investing your time and risking your money on something that gives you minimal return?  $1,200/yr is not worth peanuts to me and I'm not banking on appreciation in my market as it can go both ways. 

I do not have experience in this, but think you will have trouble with the selling of your own notes part-especially if you still have mortgages on the properties.  I don't think anyone would want to touch that even with the money down as it really is not a lot of skin in the game and it a higher risk deal.  I'd look at the angle of finding an investor buyer of the mortgage before considering the sale as I think it will be difficult.

I know MPLS will not help fund these, but Portland's situation is a little different as they have helped subsidize the program.  That has helped with a lot of the growth.  

In Portland, the city is funding some of these places as a way to house homeless people. One of my employees said he was approached by the city about this and said his neighbor is doing it across the street. From what he said to me, the city was going to build some at their own cost to house people. After a certain timeframe passes, the ADU would become property of the homeowner. I'm sure this is not all of the growth, but it is another aspect that is interesting there.

I'm not sure how Minneapolis would address it from a zoning perspective, but many homes have very small lots which may limit where they can be placed without turning a garage into an ADU. I'm curious how this would impact parking in snow emergency situations as well.

@Roy N. You would think they would look at the add to determine if they are interested before calling about it.  

I don't like allowing them to waste my time so I'm short with people that start by asking the given information.  

When it comes to showings, I don't meet individuals at the house.  I schedule a few hour timeframe, find things to work on and call it an open house.  Saves me a lot of time that way.

A few from my SFRs.  The ads say no pets, not section 8 approved and have detailed info on the houses

1. I get several calls asking how many bedrooms, baths, does it have a fenced in yard...  All info already stated on the ad.  Along the same lines, I get several that ask about taking section 8 or try to avoid the topic until later when they are applying.

2. I had one say they would like to move in but were not able to move for 3 months and thought I would hold it for them as the loved the home.   At a rent rate of $2,000/mo, do you think I want to eat $6,000 in vacancy?

3. A family comes to look at a house and I discuss the no pet policy in our discussions.  The father says that is not an issue and then the kid blurts out "what about our cats"?  They didn't get the place.

4. One woman was interested in a home and didn't bother to say she had a recent unlawful detainer.  Needless to say she wasted her money on the application.

5. A girl and her friend wanted to rent and put in an application.  I had not run the application yet and her dad gave me a call as he wanted to see the place.  He voiced his concern about his daughter being tied up in a 1 year lease and his concerns with her living with that friend.  Apparently they always have issues going on between them and he did not see it working out.  He also tried to negotiate rent with me to get me to come down 30% to make it more affordable for them...  Needless to say, they did not get the place.  

6. I have had several people ask about rent to own when it is not an option.

7. I have had several calls that appear they may be from some sort of business trying to get info on the home and not at all interested in renting.  It is easy to tell based on the questions (sq/ft, finished basement?, fireplaces?, updates/materials...  Nothing about the neighborhood and they are clearly taking notes.  Sometimes I hear the typing.

Properties on there generally need some work so I'm not sure if the properties you are interested in would qualify for conventional financing in the first place. I looked at two properties that never hit reserve and got listed 4-5 times consecutively before being pulled and listed on MLS. I'm not sure why some companies even bother with listing there in the first place.

I'm surprised there have not been a bunch of recommendations for $100/door yet. 

I would ideally like to get $300/mo+ after debt service and CAP EX where I am investing.

The area of the investment and geographic location have a big impact on things, so it is hard to say there is a good rule of thumb that can arbitrarily be used consistently across the US.  $300/mo on a $100k investment is completely different than $300/mo on a $400k investment so I am not sure what value there is in looking at this from a national perspective.  

@Chai Xiong If you are not investing in the same or a similar market to Brandon, how do you justify $200 is a good figure for your market? 

Take the 3% if you can make it work with the downpayment and amortization schedule.  It just seems too good to be true for me.

@Bruce Runn

The link I posted matches Jordan's limits at the top.  The link just says "Vacancies need to be under HousingLink's rent limits to be listed in hList" and lists those rents.

Those seem like rent limits, and not something related to voucher limits. It might suggest that these are the max rents someone with a voucher could pay for rent (after paying out of pocket too), but I don't think it is suggesting these are the actual voucher limits. I agree that the link you posted is correct. It matches the fair housing rents that HUD lists too.