All Forum Posts by: John Lawrence

Hey all,

I have two properties in the Hampton Roads, Virginia area and they have been managed by the same company for many years.  It's a very small company, and I've just really never had a great relationship with them.  Being that I'm a long distance owner, I can't just stop by the office and talk to them, but communications with them are unreliable at best.  E-mails go unanswered, responses are vague when they come, and they just don't have the energy I need to feel comfortable that they are looking out for me.  They don't have the best manager portal, and I don't even think their accounting manager is very good at her job either.  The broker sent me a new management agreement recently because he didn't know the agent he had working with me had already signed one earlier in the year.  The new contract gave me the feeling that the entire point of the agreement was to protect him and his business against me, the owner.  Nothing in it felt good, so fortunately I was able to send him the previously signed agreement that was much more amicable to both parties.

All that said, it's created a learning situation for me over the years because I've had to constantly harass and poke them when things didn't make sense or I didn't understand what they did.

I have been an unskilled investor and am finally taking control of everything and pouring tons of energy in to fixing the issues I have so I can make better deals moving forward, but I think one of the things I need to address is this property management company.  How does one fire a company and hire a new one?  Is it a lengthy process or a fairly smooth transition?  I'm on a management contract for one property through February 2019, and I'm not sure about the other property but I may just be in an at will agreement at this point.

Any advise or recommendations would be appreciated, as well as any leads for great property managers with good communication skills and financial practices would be awesome.  Thank you!

John

@Justin R.  Thank you for the great reply, it's very in line with what I've been thinking...

Some answers to the questions.

Pretty much all of the equity in both houses is from down payments.  #2 and #3 were both purchased by my mom so are inherited properties for me.  

#2 has 27 years or so remaining on the mortgage and is in a good market in Montana.  It's appreciated about 10% since purchase in 2015.  Great property manager and tenant. 

#3 has about 21 more years on the mortgage, and sadly this duplex has actually depreciated since original purchase (originally purchased for $190k in 2009). This one and #1 are both located in Hampton Roads, VA and the area they are in seems stagnant and slowly declining.

 I'm thinking of selling #1, #2 and #3 to pull all the cash out and reinvest in to Florida where my sister is located as this will most likely be where I end up once this military thing is over in about 8 years.  I bought the condo down there and have spent most of my time learning that market, so it's where I feel most comfortable.  She is also somewhat knowledgeable in real estate so I'm looking to get her involved in a way that we both benefit.  We have a really strong relationship so I'm not worried about it suffering, especially since she's very interested in this as well.

Thank you again for your response and advice!  

@Ned Carey  Honestly, they are all negative cash flow considering all expenses, which is why I am hoping to find some suggestions on what to do.  I've been sustaining everything as is with little issues, but if any capital improvements hit it will seriously hurt the savings since they aren't funding themselves other than paying the mortgage and property manager.  All but #2 aren't in highly appreciating markets as far as I can tell.

If I understand what you're saying, you're saying I should just save up the capital repair reserves and look for other investments to offset these?  Thank you for your reply!

Hello all! 

This is my first post, so I'm going to lay out my whole situation and I'd love some expert insight as to what I should do.  BLUF:  I have real estate, some investments and assets, and some inherited money in a retirement account.  I'd like to lay out the rough numbers below and see what you all recommend my course should be.  I am extremely passionate about real estate being my future, so I want to make sure I stop making misinformed and uninformed decisions, and start winning on investing.

First off, my name is John.  I'm currently active duty Navy and have been in almost 12 years.  I'm living in San Diego County for now but transfer in about a year and hoping to go back to the east coast.  2017 and 2018 have seen some massive changes in my life, some good and some bad.  

The financials are as follows:

TSP(Government 401k): approx $40k

Inherited IRA: approx $115k (withdrawals affect taxable income levels)

Cash:  approx $10k (recently paid off ALL consumer debt including car, so building this up at a rate of about $2.5k/mo)

Precious metals:  probably about $20k worth

Real Property: 4 houses

#1: Single family

Current Mortgage: $163k (PITI = $970/mo)

Estimated Value: $160k

Rent:  $1195/mo

#2: Single Family

Current Mortgage: approx $140k (PITI = $1088/mo)

Estimated Value: $200k

Rent: $1385/mo

#3: Duplex

Current Mortgage:  approx $120k ($1120/mo)

Estimated Value: $165k

Rent:  $825x2 ($1650/mo)

#4: Condo

Current Mortgage: $60k (PITI+HOA $853/mo)

Estimated Value: $80k

Rent:  $850/mo  (I rent this one to my sister, so this one is a wash)

So my questions are... Should I keep everything I have and just focus the capital I'm building through savings and the other cash assets on new rentals?  Should I focus fire down the duplex to get it cash flowing more?  What should I do here?  I feel like every one of these properties were purchased at market value, above the recommended levels for cash flow.  I'm sort of in a holding pattern right now because I'm not sure what my next step should be.

Thank you all for taking the time to read this, I've been listening to the podcasts now for a few months but finally made it over here to the forums and I'm looking forward to being more engaged.  Looking forward to your advice and responses!

John