All Forum Posts by: Joe P.

I hope you had a signed contract for this. Or at the very least, any type of written communication (e-mail, text) about the price. Let him put a lien and if you have a contract, or written expectations of pricing, then hang onto it.

Frankly I don't know who this guy thinks he is, my guess is you didn't do the right work up front and now he's taking advantage of you -- meaning I'd also be super concerned about the work he did because it seems disingenuous. Did you guys not speak at all about pricing/scope changes during the project? Did he not let on that this was coming?

Again, as others have said...what does your contract say?

RUN from this guy. There's 8 billion people in the world. Someone else will come along. As someone else said, stick to your criteria. A background screen is imperative on all applicants. And most landlords (the smart ones anyway) will run a background check, so if this guy is new to renting and what goes into tenant screening, he'll find out really quick that 95% of applications are going to include a background check. Move. The. Fcuk. On. ASAP.

Personally, if I were to invest in an "out of sight" area (I'll call it 50 miles+ from where I am) I'm going to need to be on the ground. To me, this an investment, and information and connections are important.

Someone earlier recommended getting involved with the local real estate groups in the areas you're looking, and I agree. Some are doing Zoom calls right now, which you can take from where you are. Get a sense of their markets, their numbers, the areas they like/don't like. If you have the funds you may want to consider taking a trip out to whatever locale you want to invest in. Having your eyes on the property and the neighborhood are important, in my opinion.

OOS is a bit too risky for my extremely small, dull portfolio. But obviously some people have done well with it -- having someone you trust in the area to be your day-to-day manager is important.

Better performing? Not going to do a lot better than $700 CF per month (again, depending on overall numbers). He's better off HELOCing and finding another good performing property and BRRRRing it. If he was making $50 cash flow per month then the sale would absolutely make sense. But in this case, he has appreciation (which means he has equity bullets) and he's making money hand over fist. This is a golden goose -- why would he sell?

We don't have the rest of the story on the financials of the property (e.g. if you put 1 million cash into the property, $700 monthly cash flow is garbage. If you put $50,000 in it, totally different story). So I'll assume that the cash flow AND cash on cash return is really good here -- if so, don't look a gift horse in the mouth. If it's a high performing rental property, use it to your advantage even beyond the cash flow, e.g. HELOC for another property. I don't recommend refinancing unless the terms are not great - even cashing out money for the next property is a good idea, but I'd rather have a short term loan to pay back via a BRRRR on the next property than pull out all the equity on this one. Personal opinion, of course.

I think ultimately every decision should be inline with your investment goals. If you want to buy and hold property, make sure its a great buy and hold. If you only want triangle-shaped apartment buildings with exactly 7 one-bedroom lofts, then take action to meet that goal.

IF your goal is buy-and-hold for cash flow, and you've properly analyzed this unit's CF potential (Income minus PITI, CAPEX, maintenance, vacancy, management, utilities, city/license costs, business expenses, HOAs, whatever...) and it does indeed cash flow $850 per month...then holy hell man, hang onto this cash register. If the cash flow is actually like $50, you might want to consider selling for a better quality CF property.

So step 1...define your goal...step 2...determine if this property helps you meet it.

I would caveat this statement to say, if you're "ready to go" then there is nothing wrong with this. This would mean you've found a suitable property, you can reasonably estimate it yourself within +/- 25%, and have all funds lined up, I assume a GC would be OK to walk through. The problem right now is that most, if not all GCs worth their weight are slammed right now.

For my BRRRR I brought in a few contractors during my walkthroughs, before I picked up the property. Their estimates help me make an offer on the property that was appropriate, and gave me a range to be in for purchase.

You can also pick up a few books to help you estimate. I'd say on the whole, if your class B/C, a bathroom can run up to 10k, kitchens up to 15k, and electric/plumbing perhaps up to 20k. If its purely cosmetic the prices go down. I do agree with David that you should have some idea walking in (the reasonable estimate +- 25%) because when you do eventually get that break down, and can compare, some guys will pass reasonability, and some won't. I had a contractor for a property quote me similar pricing for everything, but had 20k more built in for framing and drywalling, which I thought was excessive because the drywall in the property was in good shape and just needed a skimcoat.

@Caleb Haynes the answer might just be to sit tight. You can't control supply, demand, hysteria, pricing, but you can control how you act and react to it. Money rushing in always concerns me. If the numbers don't work, they don't work. Don't force it.

I hear you...phone screen is a good idea but for my one property, it was a BRRRR and was really, really nice for the neighborhood. I had a ton of interest on Zillow and FB marketplace and phone screening would have been a second job. I just used canned messages and responded to people with the requirements, which dropped out about 75% of the tire kickers. Then I always have a 10-20% rate of people who don't show up to our scheduled time (which is just a time slot within an hour I create...open house style), and then from whatever is remaining, some people don't make the cut because of minimum requirements.

I ran it like you with the paper app and the link and stuff, but there is an application already on Zillow they can fill-out and it does the work. Payment collection can be anything that makes the tenant do it properly...if they like Zelle, use Zelle. If they like a paper check, let them do that. Path of least resistance.

I use Zillow Rental Manager and started using it exclusively for one unit I manage that came off a BRRRR and was rented late last year.

I'm using it to collect the rent for this property -- what others have said about waiting 5-6 days is accurate. However, I like the ACH payment aspect and it auto-deducts. This past month it told me it was initiated and would take 6 days, like normal. On day 3 (mind you, 2 days after it was due),I received an e-mail saying me there is insufficient funds and/or a problem making the payment. My PM got on the horn and sorted it out with my tenant (who paid via a different app immediately), but still.

I also think the background services are spotty at best. One tenant that I got close enough to have a county CO pulled for turned up to have warrants locally, but it didn't show up on the Zillow background screen. I can only surmise two things -- one, it was too recent to have appeared in the screen, or two, Zillow only does federal checks and if local agencies are not reporting up, you won't know. Turns out the county CO saved the bacon, so to speak.

Loved the listing and application aspects, though. I received good information and good leads and I'd say its easily worth the money they charge. I think many renters are using Zillow to check for available rentals, so it makes sense. I also use Facebook Marketplace but it seems like FB is 97% tire kickers. I have canned messages for everything in response just to make my life easier.