All Forum Posts by: Jaron Walling

@James Hamling Unbelievable response here. Wasn't planning to check the forums today but glad I did. We're trying to apply this wisdom to our tiny portfolio. In this market we need all the help we can get. 

"There is a "sweet-spot" of performance that is on average yr 3-7. On average about 5yrs of happy-days." 

Question: I bought a property in 2018 (BRRRR deal), remodeled it, and it cash-flows roughly $300 per month. House built in 1930. Almost everything has been replaced or upgraded including HVAC. We owe $81k, 3.5% rate, and market value is $170-190K.

If the tenants moved out would you sell?  

 That's all you can do now. No more nice guy tactics. Remind her that nobody wins if an eviction happens. Her credit can even take a hit. I'd offer her one months rent, cash for keys, in writing, and out by ____ date. It's not a negotiation. 

She's been there 9 years with no rent increases. There's only so many excuses. 

You took the nice guy path and it didn't work out. It happens man. Don't beat yourself up. Naively, based on what you described, I would have tried that too. I would have at least increased rent, not $800, but at least $100-200 per month. No pressure was added from the new landlord so little effort has been given from the tenant to find a new place. 

"Should I be serving her with a 30 day notice to vacate?" - Absolutely get this posted on the door tomorrow. Take a picture of the notice for your records. Start gathering everything including leases, notices, text messages, and that letter for a property she was supposedly moving into. 

Have you offered cash for keys yet? Sometimes that's the trick but plan for the worse. Following because we don't have experience with inherited tenants. I'm other investors will chime in. Best of luck man. 

@Peter Bendorf Why would you rent when you could be living for free? 

Unless you have better arrangements, family, or can't stand living next to tenants anymore you should be living in one of your units banking $$$ until you save for the next deal. 

"Looking to onboard a property manager and get myself out of the day-to-day operations." - If you're making good money flying I'd start this immediately. Read and research questions to ask PM companies. They take roughly 8-12% of monthly rent. Meet them in person, establish a relationship, and find the value they claim to provide. 

Let them manage a few units and self manage a few until you trust there process. It's not on you anymore. You get basically no say in who moves into your properties. It's a different mindset. You can focus on more important things. 

Those $900 per month mortgage payments are wild. Talk about the good ole' days. 

Assuming the OP is retired they have so many options. Just depends on their goals, tax strategy (1031 vs. paying Uncle Sam), and if family will inherit some properties. 

@Charles Granroth You can learn a lot from real estate investing books. I'm about to pick up the Small but Mighty Real Estate Investor by Chad Carson. I've heard good things and I enjoy books that can actually benefit my investing goals. 

You can learn more in these forums. The reason my post and vote count is so high is because I continue to read, learn, and give advice when I think it's valuable. My wife and I are not experts, but I have learned so much from the forums it's insane. Our focus has been single family but knowing bits and pieces of other types/strategies of RE is massively important. 

You will learn the most by doing. Buy, rehab, and sell RE. There are no short cuts. If you find one you're going to pay for it, it's a scam, or a waste of time. I took the DIY remodel approach, rehabbed some houses, and understand the general costs to remodel smaller properties. I know the material costs for bathrooms, kitchens, plumbing, flooring, roofs, and painting. I call it cosmetic+. Labor is always tricky but you'll learn that too if you work with the same contractors over and over. It's the best way to find success in this business. 

Network. Attend some meet-ups and get people talking. See what works in your market.  

If you know some of the above it's probably time to jump in. Find/buy/create the best deal you can, follow a strategy, make realistic offers, follow a budget, and have reserves. That's all you can do. We can't predict the future and we can't time the market. 

@Jerry Zigounakis In this market the BRRRR strategy is pretty difficult. Higher interest rates and high prices don't go well UNLESS you buy the property right and most likely in cash. A few years ago investors couldn't miss. The market tail winds boosted the ARV, and interest rates were trickling down. It was a win-win. Today that's not the case. The FED is keeping rates high for a defense against against inflation, and what ever the president is doing with tariffs, stripping the government, DOGE, bla bla. It's not conducive for BRRRR.

What did you pay for the property? How did you create value? What's your estimated ARV or appraised value? Get any of those steps wrong and you're trapping cash in the deal. That's not a bad thing! It's just hard to recycle money into the next deal.

You could take the conservative route and pull little to no equity, play the waiting game, and wait for lower rates. You may not not recoup enough cash for reserves or the next opportunity. I don't recommend that idea. Cheers. 

@Peter Bendorf My brother is on track to become a commercial pilot and just passed his multi-engine rating test. Seems like a great career! 

Where do you live and do you own a primary residence now? 

Where are these properties located? How and why are you self managing if you're a pilot? That sounds like a massive headache if you travel a lot for work. Rental management is easy but it's not passive. It still takes up your bandwidth and time. It may not be the best use of your time. Something to think about in 2025. 

Rent by the room and house hacking is "fun" for about 12 months. RBTR is management intensive (tenants coming and going) and house-hacking is great if you don't have kids and don't mind living next to tenants. Generally speaking it's a newer investor/ first time buyer strategy. You have three properties so I'd think you're beyond exploring those.  

I'd be aiming to BRRRR (some cash in the deal) or flip RE with your cash or a partner in 2025.

Find out as much information about the HOA as possible to determine if you want to close or not. Some are ran great and proactively maintain properties, others not so much. That roof needs replaced because it's going to start leaking again. Just a matter of time.

@Stone Pittman Sounds like you guys are on the right path and giving every dollar a purpose. I'll tell you from experience KEEP DOING THAT. Stay on a budget and keep saving for DP and renovation budget. 

Research, run numbers, and learn to BUY RIGHT. If you want to live-in-flip you need to buy a mildly distressed deal ideally below market. I negotiated $23k below asking when I bought my first property because it was distressed. I offered $25k below asking. My agent didn't question me. Don't be afraid to shoot low and negotiate. I used a conventional, 5% DP, and the rest was spent renovating the property. It was move-in ready but terribly ugly with a leaking roof. I lived there for two years and now it's a rental. 

Start watching YT renovation videos and learn what it takes to renovate, and estimate costs. HGTV is not your friend. They gloss over the $$$ and costs for labor. Try estimate renovation costs for a flip or house-hack combination. You need this when you make offers on houses. If you know any contractors pic their brain on labor costs. I spent $17k on first remodel (unbelievably low for today), but I also did some projects my self. Realistically it would have cost me $25-30k. I didn't have that money so I had no choice. 

I never sold the property so we haven't realized any gains. My 2 year capital gains tax exclusion is long gone, but I couldn't be happier. The long term wealth, easy maintenance because I replaced most things, and cash-flow has been good. Actually we have made next to nothing on paper. A new HVAC last year wiped out $9k in reserves and few years worth of cash-flow.