All Forum Posts by: John Chapman

In answer to your original question, it is not unreasonable to pay something on top of commission to a buyer's agent who is helping you buy investment properties, particularly if it's a lower end property.  Back in the day, I'd throw my agent money on top of the paltry commissions she'd make on foreclosures.  She needed to eat and I wanted her happy.  Deals still worked and we were both happy.  She was very upfront about it, though.  We spoke about it and it was in the paperwork.  I suspect your paperwork discloses the payment, but if your agent never specifically raised the issue, it's probably bad form (not sure it rises to the level of unethical.)  I have to agree with @Russell Brazil that it's really weird you are just now noticing all these fees you paid. 

Unless they are wealthy with oodles of assets hanging out there (highly unlikely), this is like squeezing blood from a stone and a waste of time.  Plus, no lawyer will take this on contingency and hourly rates will eat up your recovery.  Just a cost of doing business, unfortunately.

You're probably right that global statements that turnkey investments are all bad are overstated. Probably alot depends on markets, operators, properties, etc.  One issue I have, though, is when people get on and talk about great their turnkey investments are going and they've been doing it for a year or two.  How long have you been investing in turnkey properties?

There is something wrong here.  Your house should not be sitting vacant for a month and a half unless it's overpriced, in non-showable condition, or there's something else weird going on.  We are in a smoking hot rental market and fairly priced housing flies off the shelf, particularly at $1400/month.   

The recommendation from the former property manager is worthless.  They have no incentive to be honest and every incentive to lie.  

If it were me, I would stop, re-evaluate and figure out why I don't have a flood of applicants.  I would not take the first applicant that comes along.  In this market, and at that price point, you should be able to find more qualified applicants.

Gotta agree with @Steve Vaughan. I'll also add that the junk sales pitch I see coming out of Austin lawyers on "asset" protection is ridiculous for 99% of BP. I say this as someone who literally sues people for a living. A number of years ago, I was involved in a lawsuit against an apartment complex over a dead child and my firm won. (Hint: insurance, not LLC or some other ridiculous form of entity/offshore trust covered the judgment and as far as I know the place is still around.)

Guess, I'll chime in here.  I have a fourplex that I affirmatively hate.  Like, with a passion.  It kicked my butt for several years (low-end C tenants).  So much drama and nonsense (literally had one tenant deliberately flushing tampons down the toilet to clog the sewer line and get back at me for throwing her out)  I got it under control and it's probably my best performing property from a numbers perspective, and I haven't visited it in years.  I still hate the place, though.  

First, it's probably just residual dislike from all the trouble it gave me in the beginning (most of which, in fairness, was due to my own newby ineptitude) Second, it's not really consistent with my current model of easy peasy SFRs that I fix up,  make look nice, and don't give me problems.  I hate managing C class, hand-to-mouth tenants.  Totally profitable and with scale and professional management, I would do it.  Fourplex is just too small for that.  

7 unrelated people in a 2400 square foot house in a residential neighborhood?  Man, that is going to be a tough one to keep under wraps for an extended period of time.  (I agree with one poster, I'm not even sure how you fit that many bedrooms in a house.)  Traffic, noise, everything.  Nosey neighbors wondering what is up with all the people.  We've got unrelated person laws in Fort Worth limited to 5 unrelated people, and this is an issue with student housing near TCU (i.e. homes rented to college kids).  I know a couple of savvy operators and sometimes they will have one extra person in there, but there's a lot of activity and other landlords with students living in SFRs so they kind of blend in.  If you don't have that kind of camouflage, I worry that you'll stick out like a sore thumb.  Sounds like the numbers still work even if you drop down to 5 people, so it's probably not a big deal I guess.  (That's assuming there is even such a restriction.)

As an aside, in my area, zoning is generally done by cities, not counties, so I question whether Clark County was the right governmental entity to check.  You may be outside of municipal limits, though, so I'm kind of just speculating.

Wow.  I cannot fathom a situation where I would want a 5 bedroom/1 bath house with overmarket rents in a bad neighborhood at an inflated price .  (At a 65k price point, I suspect that neighborhood is a long way from gentrification.)  I agree that maybe there are some crazy financing terms you achieve that make this profitable, but I would ask whether this type of house is the type you want to manage.  Wear and tear on these properties will likely be huge.   Sounds to me like you are trying to force the deal.  

@James H. Yeah, I read your post last week and wasn't sure what to make of it since I don't own condos. I could definitely understand your experience if your main competition is other apartments. I'm an SFR guy, though. In that market, my perception/experience is that, while rental increases are slowing down, there is still red hot demand at the right price point.  If you've got a $1000-$1500 house that's not in the hood, nice, and at market rent, it will rent in a matter of hours/days.  When you go a lot above that price point, you've got a much smaller pool of renters.  I should say that I'm only in Dallas and Tarrant County now, though I used to have 2 in Plano until last year.