All Forum Posts by: Janine Covello

Stress is normal in the beginning- little things seem like a big deal....when I first started managing my rentals each problem was new and I would "freak out" a little bit whenever an issue came up...This went away within maybe six months though- I realized everything was just a process and I established processes to deal with each issue-

1 .IE- there are vermin in house- call exterminator

2. People shooting up in back yard- install security fence

3. Pipe backing up into the street- (Yuck....) big plumbing job-time to dip into that reserve

4. Tenant can't pay rent due to COVID- get him out ASAP and get new tenant

I have had a roller coaster 3 years with some of the weirdest and grossest problems in Philly but I am at a stage now where nothings really phases me anymore- and I am juggling a FT job, heavy family demands and more... I just literally don't let myself obsess anymore I just do what I need to to keep things moving :)

Good luck!!

@Katie Miller Sure- that would be totally fine with me :)

@Deniz Eker- Cash flow is excellent- My expenses on the three average about 1k per month total(Maintenance, electric on just one, water on two, property tax, and insurance) I do not have any mortgages. When I do decide to finance them and buy more properties I will more than cover each mortgage. I receive in rent 3900$ a month for the three of them so I am making about 2900$ a month

For appreciation based on comps in the area this is about how much each has appreciated in the past year with the repairs I put in- I put about 5k into Property A, About 12k into property B and 6k into property C at the start. 

Hi!

It's so smart you are thinking about this at a young age- all the years I spent renting and paying crazy amounts of rent with friends make me really wish I had done something like this...that being said-

1. I would try to avoid paying PMI if you have the money- just be mindful when selecting a property that it fits into your budget and the numbers tie out

2. Are you planning to have friends rent from you? Make sure you treat this like any type of business arrangement and that they have the ability to pay-that they have solid jobs/good credit etc :)

3. I would go multi family- especially in Philly- the cash flow on them is great. In fact if you and your friends lived in one unit, depending on the place you may even be able to cover the mortgage in full with the rent you'd be getting on the second unit

4. On repairs- one plus I have found in working in Philadelphia personally is that minor/cosmetic repairs tend to be very affordable- so I would run away from anything that may need new walls or fresh carpets/flooring- just be really careful about electricity, structural, wood rot, or places with TONS of windows (Some of the old houses have a million windows and replacing/repairing is super expensive) 

Good luck! :) 

Mine really aren't too exciting- but would love to chime in on behalf of the other newbies and people who have recently gotten started, but maybe haven't grown a ton just yet. So in the past two years I have bought two duplex and a single in Philly- they are all doing great! But it's been challenging balancing scaling my real estate business with also starting a new very demanding full time job and also giving birth to my second child this past year :)

What do you want to do with your real estate business this year? Why?

This year- after a year with only very moderate growth I really want to refocus- remember why I started doing this to begin with and figure out how I can scale the success I've had so far! My first three investments are doing great- and I have the ability to invest in more- I just need to find those deals and put in the work to get it done. 2020 will be the year to focus, and re prioritize my real estate business. 

What are you going to do this year to move toward financial freedom? Why?

It's time to buy another property- honestly I'd be thrilled if by the end of the year I buy two more and extremely happy to find one good one. I am also considering for the first time taking investment money from outside sources- I've been approached by others who want a part of what I'm doing and I have hesitated partnering up on any deals because I wanted to be sure of my process first-and preferred to use my own money but I am starting to think I'd be OK partnering with an investor in 2020!

I am a big fan of 19134- and I have two buy and holds that are doing really well for me right now there. Here are some things I learned- 

1. The areas I am in are still "rough" when I was starting out I legit had contractors that would not work on one of my blocks- I was really insulted when that happened for the first time but I have since learned to move on and be sure to have multiple vendors lined up for quotes and estimates on any possible jobs 

2. I had some real gross problems when I started out- roaches, illegal trash dumping in my back yard, people shooting up in my back yard(time for a security fence!)- people breaking windows- graffiti, etc- and this took up more budget than I had originally planned- I had to learn to not be sensitive to the problem and just move forward with solutions like pest control,bars on windows, a nice big chain link fence etc 

3. I have since seen GREAT appreciation in the area and I get phone calls multiple times a week on one of my properties (Kingston ST) In particular with offers (I'm not selling it!). The cash flow I have now- is with a government program I partner with (Not section 8 it's a different program) and it is AWESOME. The tenants are now settled and are low maintenance. 

4. My other property I bought cheap cheap and did rehab work on- and I have two non program tenants who all things considered are awesome, although I had to say no to about 10 people before I found these and the cash flow is great. I am constantly checking comps in the area and my redfin/zillow score and getting and taking phone offers and sense some solid appreciation there already

5. My strategy is and always has been buy and hold for about 20 years in this area- I've decided if it continues to appreciate great- if it stays a little rough the cash flow is solid enough that I am happy :)

About two years ago I first came across bigger pockets because I was interested in real estate, and had bought a few books about it- and really thought I'd be good at it if I applied myself and learned more. BP gave me the confidence to move on my first deal (Thank you Brandon Turner!) I went in with the mindset that one deal won't make me rich, it won't make me poor and I will learn a lot in doing it. 

Since then, I have very carefully done three of my own deals and they honestly changed my life. They didn't make me rich (yet!) but they have really been a HUGE step towards financial freedom.  I now have two duplex and a single in Philly. The expenses each month are low and so after expenses I am getting close to an extra 3k a month in cash flow. And all three properties have seen significant appreciation in the past 1-2 years from what I've seen with comps and the various offers I've been handed.  I have been able to send my little girl to an awesome summer camp. I'm able to put away money for retirement. I am able to say yes to weekend trips with friends. I am so happy that I took that first step and honestly not sure I would have done it without having read the forum posts, listened to the podcasts and read Brandon's book. 

I was 9 months pregnant when I made my last offer and lived several hours away- so I sent a representative (real estate agent) to do a walk through with me on facetime and then negotiated an out during the inspection. It was super cheap though- like a super strong deal. It mostly worked out just fine- there ended up being wood rot that I MAY have suspected if I had been there but to be honest probably not. Even with the extra 2k in floor boards it was still a great deal so I don't regret it and would do it again.

Melanie- just sent you an invite to connect :) So I have two duplex in the Harrowgate area and one actually really pretty single family in Frankford. Neither of them are in fancy areas but I picked them because they were structurally sound, priced well as far as cash on cash return.  Two of them had multiple offers the day they went on the market but I paid cash and had an awesome realtor who knew the area and helped me enormously. She handled so much for me being a remote investor and was worth the investment. 

For my tenants, two of my units I partnered with a state run program that helps find housing for previously homeless individuals. They are an AWESOME partner and even though it was a pain and very frustrating to get it up to code, once it was there they pay me directly and they cover damage. 

I have one inherited tenant that was a bit of a learning curve because he speaks zero english and has never paid not cash before and I certainly didn't want to be knocking on doors- but once we got into our groove and I opened a local bank account he just deposits the money in zero problems and actually is one of my favorites.

My other two tenants I used my realtor and I was SO picky. I let those places sit until I found someone with good credit, verifiable employment, and ability to meet all my screening requirements. It took a bit of extra time- but it was well worth it. 

As far as major issues- honestly nothing was insurmountable - the biggest issues that I've come across has mostly been deferred maintenance from previous owners and having to put more money than I originally planned in at the start, but honestly I'm seeing that money in area appreciation and with the excellent cash flow (For example I paid about 65k for my duplex and now I'm getting 1200 a month for it)

We had some wood rot which was a little expensive to fix, but it was fine. We had people dump trash in our back yard once and I invested in chain link fence, we did have a few broken windows, grafitti issues, pest control issues but I try to just stay calm and just take it one step at a time. It's been worth it 100x times. I can't wait to do more!

I haven't given up on 19124 and 19134 yet :) I see there are some good deals to be had in Frankford and Harrowgate if you are selective. 

That being said, there are some seriously bad properties, and properties that don't look bad but are covered up by cheap cheap cheap materials with structural issues underneath so definitely be careful (as I learned the hard way last year:) ) 

It sounds like the credit card ratios are high- with your monthly income being so low I feel like you are going to have a hard time getting the loan and interest rate you would want- while I agree you want to get some specifics from an actual lender- having recently gone through that process myself I would aim for the following-

1- Get that credit score above 700

2. All credit cards under 30%

3. Plan a larger reserve for closing costs, inspections, upfront payment on insurance and unforseen rehab expenses- I have bought 3 houses in the past 2 years and not once did I not need at least 1-2k extra to get it "rental ready"