All Forum Posts by: Jason Measures

Say what you will, but this kid is crushing it. Congrats on your success so far, @Tyler J. 

While I do agree that you absolutely must outline in detail what your goals and end game are, you're off to a great start and that should be recognized. Conservatively, you could leverage your free and clear property at 50% and can easily buy multiple SFRs. My total cash out-of-pocket on the 4 rentals I bought this year totaled under $7k. Granted, you must maintain healthy reserves, but 50% will more than allow this for you and will not over leverage your free and clear property.

@Kirk R. If you're having trouble finding deals, join the club my friend. The current market is tough, but there are absolutely deals to be had. I started looking last year, but didn't close on my first until January of this year, but have since then closed on three additional deals, totaling my first year of REI to 4 buy and hold deals. The crazy part about these 4 deals though are that they came to me through people that know me and know that I am a RE investor. In other words, networking is the only way I can come up with an answer to how I was able to capture 4 deals in my first year. Granted, I still had to negotiate, close, rehab, lease, and everything in between, but all 4 deals came from the most basic phone calls, "Hey Jason, I know someone that's wanting to get rid of so-and-so property that you might be interested in." Boom. That's it. I called the sellers, performed due diligence, made the offer, negotiated, then closed the deals. Certainly, I had a great deal of luck involved with these deals simply "coming" to me, but as Daniel Priestley wrote in his book, "Entrepreneur Revolution," you have to "Create ongoing serendipity (create your luck)." Trust me, my intention is in no way to be or appear boastful, but simple to encourage that, while deal flow is difficult, you always have and always will have the power to network yourself, which will prove extremely fruitful in your REI endeavor. Every person that knows you and every person you interact with and encounter should know that you are a RE investor and that you are always looking for deals. When I meet new people, and they ask what I do for a living, I start with saying that my career is REI, but my W-2 job is with an accounting firm. I always want to position myself as a RE investor first, then a W-2 employee second, simply because REI requires networking, and as I said, it could very well be your greatest asset, particularly starting out. If you ever need anything, PM me and I'd be happy to share more or help in any way I can. Be the best networker out there! Good luck!

@William Baumann I'm certainly not mentioning this to assume you're unaware or not knowledgeable, but please be careful using zillow and the county assessor's office for ARV estimates. These numbers are often inaccurate and can be misleading.

@Brittnie Stewart Absolutely start with @J Scott 's suggestion of identifying someone knowledgeable within that particular market. Then, as William Baumann said, or at least bouncing off of his idea, if all else fails, just pay $50 for an option period of 7 days and hire an appraiser to be there on the first day so you can have a confirmed ARV. If the appraisal comes back low, use your option to back out of the deal. Of course, be very professional in all of this so as to not diminish your personal brand in the eyes of the seller, but this is a very appropriate and common method. Nevertheless, I unfortunately cannot help you with your starting offer because the Baltimore market is drastically different than the Dallas market, but if you're able to nail that down, you still have the backup plan of an option period in which you could always back out if your numbers are way off. I'm sorry I can't provide any definitive solution for you, but hope this helps.

@Jim Adams Hey Jim, you've already been given some great advice above, but I wanted to send my two cents. I just closed on a duplex in Arlington, TX (different market, I recognize) which lies in a duplex community, but was built later than the others and has varying criteria as well, therefore the traditional sales comps method was difficult to determine the ARV. Once the appraisal came back, it was confirmed that the appraiser used the cost per square footage method, as @Elizabeth Colegrove  mentioned earlier. Fortunately, I estimated the ARV on the cost per square footage method and so did the appraiser, so my estimated numbers were right on, but I was holding my breath for a few days because it could have easily swung the other way. Anyways, all that to say, if you're having difficulty, I would second the suggestion by Elizabeth Colegrove to estimate your ARV on the cost per square footage method, but plan for the worst case scenario, and if you hit those numbers, everything additional is gravy. Good luck!

UPDATE: In actuality, I utilized a bank with a 6-month seasoning period and closed on the refi within 7 months of the original closing date. Also, instead of the 65% LTV on the cashout refi, I ended up actually getting 75% LTV which ended up putting cash back into my pocket as opposed to having to put any cash into the deal. Because of this, the end result is an infinite cash-on-cash rate of return. If any of you have any questions or need help doing this yourself, please let me know and I'm happy to help in any way I can.

@Chris K. You're absolutely correct in that there are negatives to having the repairs covered by the tenant under $250, but this does keep me from receiving constant phone calls for petty fixes such as replacing lightbulbs and toilet seats. I discuss this with the tenant up front during the application and lease signing process to ensure we're all on the same page, and thus far, it has proven effective. To your points though, it can have negative consequences and potential for abuse. And you're correct in that I should have had the tenants check the air filter first, which I certainly have learned from. This is why I'm establishing a maintenance schedule system now to help prevent this from happening again, as in the end, it was my fault. Do you have a maintenance schedule that you hold your tenants to?

Hmmm. That's interesting. So what kinds of repairs would you apply the under $250 mark to?

You're right about providing the filters. I've always tried to be a good landlord so that is what I will be doing. Concerning the refrigerator repair, the tenants provide their own refrigerator, but I provide all other appliances, therefore, in this scenario, the tenant would make the repair. Let's say the range needs a repair though, and it's $75, in following my lease, the tenant would be responsible for the repair, as it's under $75. Do you think this is my responsibility though?

I'm definitely not trying to generate more income from the tenants, but I also don't want to pay additional invoices for silly issues that could have been resolved by ensuring a routine maintenance schedule was in place and followed accordingly, which would be checked during quarterly or semi-annually inspections. Concerning supplying the filter, in my lease, it states that tenants are responsible for repairs under $250, so do you still think I should provide them with the filters even though my lease states it's their responsibility? And just to be clear, I don't mind providing them, but just seeking opinions.

Recently, I had to pay $60 for an HVAC tech to simply tell me that the air filter needed to be changed on a 4-month old HVAC system in one of my rentals. The tenant called and stated that the air temperature was reading 12 degrees higher than what it was set at and the house was rather warm, as it typically is in the Texas summer. Considering the 4-month old system was still under warranty, I had the tech come out and look at it, simply to discover that the tenants did not change the air filter and that was causing the system to not run as cool as it should. Paying $60 for a tech to tell me that the air filter needs to be changed didn't make me too happy, but it pushed me to setup a maintenance schedule for my tenants to ensure my properties are being taken care of well. Does anyone have a maintenance schedule that they would be willing to share, and perhaps willing to share their own maintenance schedule system?