All Forum Posts by: Jim Landoe

Don't rehab out of state first deal. And go MULTI-- definitely. Risk is less. Cap rate higher. Losing one or two tenants, expenses are still paid by existing tenants. I don't know why, but mentally SFR's SEEM less risky until you buy your first apartment. You will be glad you did. If you go SFR, you'll be kicking yourself when you finally step up to 5 plus units and see how easy and stable it is to make money.

Here in Washington State, we have some great RE companies that give full access to MLS listings (except pocket listings) in hopes of selling product. No charge. One site is www.johnlscott.com. There are others and may be some in your area.

I completely agree with Steve and Andrew. Been there, done that with management company I thought I could trust in Memphis.  Hard to monitor out of state. Went through several poor tenants and rehabs.  Lost about $40K before pulling the plug and selling.  There are good deals right where you are if you take your time and look for them.  Also, consider financing larger complex, if possible.  You should get better cash flow. And your value isn't tied to comps like 4 and smaller units.  Your value can quickly increase by raising rents.  The hardest part is your first purchase.  Qualify your tenants and you'll have low turnover, stable income and ability to get cash out faster for next purchase.

Very nice!  1 bedrooms are great.  Tenants are stable, rarely move if you keep the place up.  Lower wear and tear too. Regarding the Allure, it's pretty good for doing it yourself, but expensive.  But you can keep costs down and free your time up to find other deals, etc. by finding a good floor man who will install some nice sheet vinyl.  If you are replacing carpet in LR, consider a 4X4 ft  vinyl landing.  Do not replace the cabinets.  They add charm, and are much sturdier than the newer ones.  They will last forever.  They are easy to clean and refinish.  You may want to update hardware, if necessary.  

If you have smokers in there, use a regular Swizzle floor mop (I think that's what it's called-- the ones with the replaceable cleaning pad) to scrub the cabinets and walls-- takes most of the nicotine right off.  Paint the walls with KILZ oil base primer.  Congrats.  Looks like a keeper.

Sounds like a generous rent.  They will want to stay.  My rental agreements are all month to month.  That way, if they aren't happy, they can give me a 20 day notice for no reason other than they want to move. If they are disruptive, do harm or go against my reasonable rules, I can also evict them.  By pricing slightly below the market and thoroughly qualifying our tenants (contacting the last two or three landlords and not short cutting that step,) we have low turnover and rarely need to evict.  We also have a stand alone policy, and don't allow cosigners.  Just a little patience waiting for the right tenant really pays off in peace of mind.  Best of luck to you.  It's a fun business with much to learn all the time.

I live in Seattle area.  I bought 4 of those in Memphis due to the low price.  Seemed like a good idea at the time.  Had local co. do the rehabs.  Ended up with about $27K per property avg. including purchase and rehab.  Would have done better to go for pricier rentals that didn't need as much rehab.  That would have put us in better neighborhoods that would allow for stronger rents and more stable tenants.  It would also have put us in neighborhoods with stronger appreciation.  I had to rehab again and again when tenants moved or were evicted by the property management company I had hired.  Was fortunate to sell them as a package at a $45,000 loss.  After that experience, decided to buy local and went for small apartment building.  Best thing I ever did.  Financial peace.  Good luck, my good friend.  My only regret is that I didn't take the steps you are taking 40 years ago. The time goes by incredibly fast.  We could have kept and paid off every home we ever owned that would be paying us now.