All Forum Posts by: Jill Addison

@Mak K. I have a somewhat similar situation where I actually split one water meter into two water meters at a duplex and asked the tenants to put the water bills in their names. They did not do it, so finally I realized my only remedy was just to turn the water off. Once the water was off they went in and put it in their names. That's a quick and easy way to solve it it seems. Hopefully that's not the wrong thing to do, but that's what's worked for me so far.

@Kyler J Sloan here's my story with that...I owned my own business for 12 years. I got really burned out for the last 2 years and wanted to sell it really bad, but I knew I needed another income stream before I walked away. I got on a tear and bought 7 long term rentals in less than a year. (Plus I already owned one from before, so 8 total.) On paper it looked like I could cover all my personal living expenses with my passive income. And I had just about used up my 10 Fannie and Freddie loans, and knew I was going to qualify for another 7 using my husband's income, so I was safe there. So I sold my business. The numbers turned out just like I planned for the first 4 months. But then I had a flood of cap ex expenses that just kept coming. I ended up just about breaking even for the first year. Luckily I had a big pile of cash from the sale of my business, but it's too bad I had to use some of that to basically cover living expenses while I went cash flow negative for about 5 months. :( I bought another 2 properties and thought I was finally getting to where I'd be covering my living expenses easily, but then property tax increases kicked in for several properties and knocked my cash flow back down to where I had been before those last 2 buys. So now I'm at the point where I really need to keep moving forward with my real estate buys since I'm really only halfway to my passive income goal (which is twice my living expenses). Even though I can see it wasn't the best decision to jump ship on my business with what I discovered was insufficient cushion in my monthly cash flow numbers, honestly, I'm still glad I sold my business when I did. I was so ready to be free of it. I can still make it work, but my advice is: if you're not hating your job, stick with it, because it will make your wealth building much easier and faster and more stress-free. Also, you have way more options for lending when you have proven income.

@Rakesh Balavanthapu I was getting right around the 1% rule in 2021 in Knoxville, TN. But the last two properties I bought there (in 2022 and 2023) aren't cash flowing nearly as well as the other seven I bought earlier. Now I'm researching pivoting to vacation rental markets and managing short-term rentals myself. Even this won't cash flow as well as it did a few years ago when prices were lower and interest rates were lower. But, it should cash flow better than long-term rentals. It won't be as passive, it will be more like a small part-time job to manage those I think. They always say at any stage that the real estate market cycle is in, there are opportunities, you just have to be willing to be flexible and look for what's working now. I always think about a guy I know who's in his 90s and has something like 90 doors. He never even really set out to be a big real estate investor, he just picked up a property every year. Just that consistent long-term effort is a lot like dollar cost averaging in the stock market. You'll get certain advantages and disadvantages at every stage, but as long as you just keep at it consistently over years, it will be worth it, as long as you're buying deals where the numbers make sense. Real estate is a long-term game. And over time it's pretty forgiving. Lots of benefits that you realize over decades, not just in the short-term: appreciation, tax savings, mortgage pay down by tenants, in addition to the more immediate value of the cash flow. Also, when I was getting these great deals in 2021, people were telling me "don't you want to wait until the market comes down? Prices are really inflated right now." Well, they just kept going up after I bought and I'm so glad I bought when I did, because soon after that the interest rates went way up. No one saw that happening as fast as it did. But the point is there will always be people who look at what the market is doing right now and say oh now it's not the right time to buy. Those people will never buy. If you put in the effort and don't give up, you will find your way to good deals.

@Jennipher Jess we inherited our first rental from my father-in-law who lived in Pflugerville, a suburb just outside Austin. It's done well and appreciated a ton in the last 10 years. So I was looking for "another Pflugerville" couple years ago, since now those prices are too high to make it cash flow, and I moved up the road about an hour to Temple Texas and bought a couple SFR rentals there. They have also cash flowed okay. But then I started investing in Knoxville, TN, and realized how ridiculous property taxes are in Texas. They're 2 to 4 times what you pay in Knoxville, even though both Tennessee and Texas have no state income taxes. Texas has some of the very highest property taxes in the nation, and it just kills your cash flow. My rental in Pflugerville just doubled the property taxes and cut my cash flow in half there. For that reason I will not be investing in Texas anymore.

@Lucas Anderson I would recommend sticking with B class areas, rather than C class. Everything I've read and heard says that C-Class looks so much better on paper but you'll never see that money because it will all get eaten up by tenants who need to get evicted, stop paying rent, trash your place. B class is a better quality of renter and that makes a HUGE difference. And as far as the debate about property management, I use property managers for all my properties and there's no way I would want to manage them myself. The whole point for me is to make this a passive income strategy, and that means I don't have to manage it.

@Raj Vegulla it's great that you're doing your due diligence and doing some homework on this in advance. But the nice thing is, since I'm assuming the house is already furnished since you've been living there, it would be very easy to just give it a shot and see how it goes. Worst case scenario it doesn't rent well and then you figure out what else you'll do at that point. You could then sell it or just let it sit if you want the option to come back to it. You actually could move into a smaller rental in Escondido yourself while you try the short-term rental thing with your bigger house. That way you don't make the whole move to Texas before you know.

@Brock Lanoza something I just realized recently is that if you have a large, say, plumbing expense, like $4,000 or more, do not have your property manager manage that for you. Instead get at least three quotes and work directly with the contractor yourself. You care more about getting a good deal than your property manager does, and there is a huge spread in how much different contractors charge for comparable work. Also, you need to understand the big repairs that are needed and be more hands on involved with that. I have learned this the hard way.

@Sean Starkey 4 of my 8 investment property purchases have been off market deals. I was surprised at how easy it was to get them. Basically I just googled and networked to find Realtors who are selling the kinds of property I wanted. Then I called them and had a conversation about what I was looking for and asked them to keep me in mind or keep me on their list and let me know when they saw something that would be good for me. Then I checked back with them every few weeks by email or text and just reminded them that I'm still actively looking for this or that type of property and please let me know if you see anything that looks good for me. That's how I got a couple of the properties, just by being top of mind and being in their face at the moment when they had something to sell. The others have come from realtors that I already bought a house with so they knew that I would close and they felt confident just calling me instead of putting it on the MLS. So it's really easier than you think. Just build relationships with Realtors who are getting the kind of listings that you want and then keep in touch with them.

@Maria Checchin I noticed you said that supply has shot up in Knoxville. What do you think is causing that?

@David Lund just closed on my 9th property and my goal for 2023 is to buy another 8 properties, SFH and duplexes. Also to buy the majority of those in a new state where I haven't invested before, to diversify my portfolio geographically.