All Forum Posts by: William Morrison

Bad news.  A quick look not to far away brings up 5 properties close to the same SF either for sale or sold recently.  $55k to $65k maybe more.  You can fix one up but you'll have a tough time getting more than 20 to 30% more in the same size range.  One although larger sold in the $90 plus range.
The second problem, the house sizes and ages in the area are eclectic.   A buyer is more likely to move up into the middle range for a very small change in monthly payment.  Some had golf course access include or available as well.

 I love it.  Like Halloween night when you got home late from work and forgot to buy candy, just turn the lights out.  Let me know how that shush works.  More Grins

Hey Justin 5 miles is 20 minutes in some areas.  You know that place you can't to from here.  Grin.  They just put a toll road in that makes ours 10 minutes closer.  Good for us.

When my wife and I started we had about three distance rules.
1. Close like on our street, neighborhood or a multi family you live in.  Not for us.  This could also be the rental type ie tenant that you have to collect the check in person.
2. 20 minutes or so away, this is what we chose.  We managed the properties and at about 20 minutes it was easy to get to but we didn't expect the tenant to knock on our door.  It's worked pretty well.  These are rentals at a price and neighborhood where the tenants are used to mailing a check on time.
3. An hour or more away I expected to have a PM and we do.  They are actually more than an hour.  Tough to respond 2 hours away.

 Thanks Brandon,  When I've traveled to date, I've done enough investigation before going to know I'm most likely buying.  And so far I have.  And yes it's added to the basis for me.
I have been looking at two places now that are not so close to each other (maybe 6 hour drive) and across state lines with the idea of only buying in one.  It more about adding just one more multi state tax requirement as opposed to two. Grin. 

I have seen some creative ways to get the property placement firms to act on your behalf here on BP.  You can ask when interviewing your PM for their turnover rate.  It still comes down to future trust and relationship.

Don't assume the state rules match the federal rules.
Time to hold and claw back provisions may not be the same as the federal.
That's just two that I've dealt with.
I found that 1031 professionals will do a free pre-screen with you to see if they will take you as a client.  I'm talking a few minutes here, not financial planning event.  Grin

I have found 6 to 10% normal depending on the State and what you ask them to do.  But the one's I've worked with or have contacted might work with, all have a minimum and your rents wouldn't cover it.  One is 8% with a minimum rent of I think it was $500 or $600.  I don't have any under $900 so I forgot the actual number.  Another is 6% because of the number of properties, but with them I have no rents under $1,500 and all have nice schools ie neighborhoods.

As @Jose Guevarra mentioned, I have found monthly flat rate PMs but after talking to them I found them to be a whole different class of PM.  They were more of a freelance employee.  Very little provided, much more than a phone number for tenants and minimal support.

Separate tenant placement fee from operational PM.  Same office, maybe same person but a different service.  Some are a half to a whole month rent with a minimum.  Some charge a fee again when a lease is up, maybe 1/2 the original placement fee.

 Matt, great post.  My daughter bought knowing she might move and rent later.  She checked and the enforcement method seems to be different from place to place.  Maybe less in some and more in others, some say a year.  What was consistent, you do have to move in and show an intent to stay.
She went in with the 5% down which went down to 3% just a little later, same source.  Her closing attorney took her through the loan and showed her the language or lack there of when she asked at closing.  Moving in, change of address cards, driver's license for sure, he showed her the time frame was not so well defined.
She ended up staying longer, 18 months so didn't test it. 

 Not a bad way to proceed if you're not trying to settle down right now.  You've probably heard a little about buy right and the rest works easier, not perfect but easier.  Grin.  Your total Debt to Income will come in as you move to your second and third property.
Personal education is important.  Not the single answer in a discussion or one page web answers, but in depth knowledge.  You want a good source on a lifetime personal budget model you might like to check out "The Richest Man in Babylon" by George S. Clason.