All Forum Posts by: Jon Moore

@Mo Muigai pay a contractor a few bucks for an estimate on the work unless you have a very established relationship with that contractor. As a contractor myself, I'll give customers (many of which are PMs) 2-3 free estimates but tend to walk when I start to get the sense that I'm spending a lot of time doing free estimates instead of actually making money.

Even if it's only 50 bucks, your contractor will take if as a sign of respect and good will and appreciate that you respect his time.

@Nathan G. Short answer: let him stay, depending on the state of the rental market in your area - that's what I would do.

I never aspire to be a slumlord but have become one at times over the years due to my tenants cleaning habits. When that happens, unless the rental market is hot and you know you can get significantly more rent after a rehab, I try to keep them in as long as possible in order to offset the cleaning costs I'll incur when they move out. Figure how many thousands of dollars you've collected in rent over the years and weigh that against the cleaning costs and the reliability of the tenant when it comes to paying on time.

In a hot market like where I live now, especially when good deals are very hard to find, I would absolutely focus my efforts on fixing up a property like that, raising rent, and getting cleaner tenants.

@Nik S. That's how I view it when things like this happen to me. It keeps me from going crazy! And really, it costs roughly the same as a formal college education anyway.

@Remington Lyman. Also be aware of making too many claims within too short amount of time, I've made that mistake that I'm owning up to here for others to learn from. I was dropped by the insurance company and had to go find some other off brand insurance for 3x the price.

Personally, in this situation, even if I had insurance, I'd still spend the $2,200 instead of making a claim.

@Jock Tilghman I'd say those numbers work alright. Especially if you don't have to do any rehab but I wouldn't take them at their word that it's a turn-key rental property. Definitely do your due diligence and check the place out with a home inspector if that's allowed.

I'll admit that I've never heard of a turn-key rental before and am not sure exactly what that phrase really means or who gives a property that title.

@Jock Tilghman Yea that sounds about right. I guess for me the concept is a little bit easier to grasp in terms of actual monthly cash flow.

@Grace Reutzel. Not sure about all that, I don't know if either of those apps allow for automatic payments or not, but they do make it a lot easier to collect rent. The hard part of course is that the tenants have to actually pay the rent!

Sorry I can't be of more help.

I plan to follow up with my tenant and confirm that he still wants to pay on a bi-weekly basis, and if that's the case, he'll have to pay the current month's rent a couple weeks early so that the full amount is paid by the 1st. Otherwise I'm effectively loaning him money for 2 weeks free of charge if I let him finish paying for the current month's rent halfway through that same month.

Awesome thanks for the encouragement!  Yea, it seemed like a no-brainer to me, but of course, throughout the course of this much more ambitious addition, a small amount of self doubt has crept in as challenges have arisen and cash continues to dwindle at an alarming rate.  I'm fortunate that both of these properties are located very close to downtown, so the location is worth investing in, and real estate in the area has exploded these last few years.  Great if you already own property, not great if you're trying to acquire more, hence my decision to reinvest into the properties I already own as much as possible until the market cools a bit.

Hi everyone. Just curious how you guys are analyzing your rental property investments, specifically with regard to investing in existing properties in the form of additions and other improvements that increase monthly cash flow.

Do you focus more on monthly cash flow? ROI? Or break even point?

For example, I finished some attic space at one of my rentals a few years ago and increased rent from 950 to 1600, which I thought was cool. It cost me about 25-30k with me doing most of the work.

Currently, I'm adding a full second story that im very confident will increase my monthly cash flow from $2250 to $3750 but will probably end up costing me close to 80k by the time I'm done. Do those numbers still work do you think? Additional info - this project was spurred on by a terrible roof and even more terrible structural support under said roof so that stuff needed to be done anyway.

@Nicholas Hoffman if you're excited about the idea of living in a home that you own then do it! Otherwise I would advise against it. For what it's worth, I started out at age 22, the house was kind of dumpy so I did some initial, minimal cosmetic fixes and got a couple of roommates while I lived in the basement, which was not finished and served as a pretty powerful motivator to get it finished in my spare time. I also had the energy back then to work, work, work. And I was excited about it.

Bottom line is that if you find the right deal, and you want to do it, then go for it.

Also one more tidbit from rich dad is to buy investments that you love so you'll take care of them. This has certainly been the case for me.