All Forum Posts by: John Smith

@Ken N. 

You should never look for deals on the MLS they are almost non existent. I would suggest drive for dollars or contact all your local real estate brokers if they have any pocket listings. Moreover, I would search up your local county's public records (may or may not be public in your area) to see if anyone had their water and/or electricity cut off. Also check to see if anyone has not paid property taxes. These are the motivated sellers. You need to be creative.

@Drew Sygit What if I asked my property manager to rent out the units and screen the tenants instead of asking an agent. I will pay them the commission on top of the 5%. Would that work out or would that still be a bad idea? 

@Bill P. Can I ask you about what percentage of that was overhead cost (insurance, bookkeeping, rent, ads, etc)? 

Do you think paying a property manager 5% to: manage and coordinate maintenance/repairs, collect rents, maintain relationship/talking with tenants, and tenant screening is a fair deal? I will be using a leasing consultant to rent out my properties so the pm doesn't have to do that. I will do book keeping on my own and I have friends who can do the repairs, so the property manager just has to coordinate with them. 

I feel that having to pay them 10% is way too much. Property management companies charge 10% because they have massive overhead and they also help with taxes, book keeping and maintenance. The cost of these things are charged within the 10%. So I feel that if I can do the other tasks at a cheaper price then I only have to pay the property manager a portion of the commission. 

Hi guys,

I just have a real quick question. I know that the average cost of a property management company would be 10% of the annual rental income. I know that reason why property management companies charge 10% is because they have other costs such as attorney, accountants, book keepers, rent, insurance, ads and maintenance crew meaning that the property manager only gets part of that pie. So I was wondering what would the commission be if I was to directly hire a property manager. Would I be able to hire him for say 5 percent commission if they were only responsible for managing the property?

I am asking this because my father has around 20 SFH in Chattanooga Tennessee that each rents for between 1200-1550 dollars per month. I have two handyman friends down there who can help with the repairs and I can hire someone to do the taxes and book keeping for him. So I was just wondering if paying someone 5% to manage all 20 properties is a feasible idea or is it too little?

Any input would help!

Thanks in advance,

Oops I posted this in the wrong forum. 

Hi guys,

I just have a real quick question. I know that the average cost of a property management company would be 10% of the annual rental income. I know that reason why property management companies charge 10% is because they have other costs such as attorney, accountants, book keepers, rent, insurance, ads and maintenance crew meaning that the property manager only gets part of that pie. So I was wondering what would the commission be if I was to directly hire a property manager. Would I be able to hire him for say 5 percent commission if they were only responsible for managing the property?

I am asking this because my father has around 20 SFH in Chattanooga Tennessee that each rents for between 1200-1550 dollars per month. I have two handyman friends down there who can help with the repairs and I can hire someone to do the taxes and book keeping for him. So I was just wondering if paying someone 5% to manage all 20 properties is a feasible idea or is it too little?

Any input would help!

Thanks in advance,

Investment Info:

Single-family residence buy & hold investment in 22031.

Purchase price: $500,000
Cash invested: $100,000

This was my very first property, I made a ton of mistakes but I also learned a lot from it. This was a bad buy and hold deal as I didn't have any cash flow after paying my mortgage. I should have just tried to flip this property instead. 

What made you interested in investing in this type of deal?

I wanted to diversify my portfolio and include both real estate as well as stocks. 

How did you find this deal and how did you negotiate it?

My parent's neighbor died and I offered their kids to buy the house at around 15% below market value with no contingencies at closing. They lived on the other side of America and wanted to sell it fast, so I was able to get a good deal on it.

How did you finance this deal?

I financed the deal using a conventional mortgage. 4.5% interest and a 30 year arm. 

How did you add value to the deal?

I added value to the house by doing some slight renovations inside the house as well as improving the curb appeal on the outside. It is in a very good school district so renting it out was very easy after doing some slight improvements.