All Forum Posts by: Justin Matesic

@Colleen F. Thanks! There shouldn't be any issues there. The floor is already painted, I was going to recoat. 

So my units both have hardwood floors, which are in excellent shape (structurally at least). Both have painted floors on the ground level, with the nicer finish upstairs in the bedrooms. 

Without going into a full blown refinishing the floor, is deck paint a good option for the floor inside?
I figure since it will get a lot of traffic, that stuff would be more durable/more protection. Or do they specifically sell hardwood flooring paint?

Thanks all that weighed in on my last thread. I was looking over my options, many of you guys advocated self management...BUT there's a problem with that. The borough has an ordinance in place where I can't get a rental permit if I'm more than 15 miles away (I'm 21), so I'd have to use a PM locally. I actually wasn't aware of needing a permit, and don't have one. The tenants I have in place are moving very shortly. They basically hate the PM I'm using (they said he's non responsive, has been rude,etc). I've tried some other PMs in the area and I'm not having much luck. I'm not even sure if my current PM is legal. TBH I didn't even know I needed the rental permit. 

So that's making me think that selling is going to be the best option. Now are there any particulars that are better for forcing appreciation? Basically if I can get out from under this at near break even I'd be pretty happy. I bought it for a decent bit under comps. I think with a little work I can get it's value up to be a small flip/better than break even.... but I really don't know.

Both interiors are in good shape, 1 could probably use some updating, but everything is functional.

The exterior looks a bit rough. Siding is aluminum and pretty old looking. Foundation is stone, and I was thinking of spending some time parging/repointing. 

Front porch has some bad wood that's going to need replaced, and balusters installed. I can also redo the back porch roof on my own. 

Are any of these things cost effective/worth doing to try to add value?

@Natalie Kolodij I was under the impression that even though the IRS doesn't recognize sole member LLCs, you could still use a lot of the expense to offset personal tax (IE writing off LLC related things as a business expense). Or would you be able to do that regardless?

But then again that's why I pay to have my taxes done!

@Amy Beth I didn't know that was an option, thanks!

@Jared McCullough It is in Charleroi, and I suspect you may be right. According to what I can find he does have it listed at about what the comps are for the area (he did increase it after that first tenant vacated, to what it's at now). I'm not sure the extent that he's advertising, but it's up on his website. He said he's done a few showings but no takers on it. As far as I know the previous owners maintained the lawn (not the tenants). 

@Caleb Heimsoth Lawn care and snow removal are part of what he's supposed to do as stipulated in the PMA. That's one of the primary reasons I went with him in the first place. Is that stuff that most PMs don't actually handle, or is it more that most don't handle that aspect very well?

@Jay Hinrichs - If I get it section 8, the cash flow based on FMR would be extremely profitable. So if I put work into getting it up to that standard, wouldn't it be worth it to just hold onto it?

@Jim K.I'm actually in Pittsburgh too. The property is in Washington Co. and the distance from most of the city PMs seems to be why I had trouble with it. There's actually some threads here about people having difficulty in finding Mon Valley PMs. One of the reasons I went with a PM was to be as hands off as possible. I still work 8-4, so would have trouble being able to juggle maintenance calls, showings, and all of that (I imagine). I'm about 20-30 minutes away. 

If I do decide to sell, I should be able to put a little rehab work into it to make a profit and turn it into basically a small flip right?

Or should I take it and attempt to get out from under it "as is"?  If I go that route should I be aiming to just essentially make back my loan and break even?

Edit: Grass was taken care of today (I got in touch with a buy and got it taken care of). I wasn't fined, the borough gave me until 7/22 to get it taken care of. 

So the end of the summer will make it a year since I've bought my first property. I'm feeling pretty anxious about it lately, mostly because of a potential issue with my PM.

I specifically looked for small MFR, that already had tenants in place. I figured this would be the easiest way to start out. I'd be able to hit the ground running and build up some initial cushion money for maint/cap ex. All of the numbers looked good when I bought the place. I took out a 15 year home equity loan, set up an LLC, bought the property with cash and threw it to the LLC.

So after I closed, I immediately had some issues with PMs. I had contacted several beforehand and then they backed out, and had to get several referrals before I found one to actually take it (due to location). 

Also one of the tenants didn't pay, and wasn't having any contact with the PM. They ended up bailing basically the next month after I took over (both sides were won m2m). 

The PM seems busy, but often takes a few days to get back to me. 

So here's where I am today. My 2nd unit still has not been rented (vacant 7 months). Basically I'm breaking even. Taxes and insurance are paid for the year, and I still have over a year's worth of loan payments in the draw account.

Recently I had a discussion with the PM that he thought it would be a great section 8 property, and wouldn't need much done (potentially windows). I'd asked him about landscaping but he didn't mention that. He also said about the rented unit needing a new stove, and the tenants were complaining of bugs. I okayed him to take care of both. I also noticed through buildem that the water hasn't been paid since April (bills go to the PM), and I asked him about why that was. He said he was going to look into it. 

I recently got a notice that my yard was out of ordinance, and would be fined next week if it's not cut. 

So basically after this past month I kind of feel like I'm in over my head, because of a somewhat overextended PM? I'm not sure if it's just anxiety or of I should try and bail on the property. If he would get a tenant in that other side there wouldn't be an issue, but I was  making far less than I was expecting. The other tenants lease is up in september and I'm kind of feeling some pressure now. If both sides go section 8 it would definitely be extremely profitable. At the same time I feel light I might just need to get rid of that property and get one closer to the city where I have a few more PM options.

Thoughts?

@Aaron K. One of the examples looks like this... Property value is 35k, monthly income is 800.  Taxes are 869/yr, utilities paid by tenants, insurance (approximating 500).  

So taxes/ins- 114
PM is roughly 8-10% for the companies I contacted  80.
Maintenance+Cap Ex-150
Loan-303
Vacancy-50

800-647=103

So that leaves about 103/mo cash flow. (didn't account for vacancy before)

@Jackson Pontsler I was actually going to use a HEL on my primary residence. I have a 15y fixed 4.25% already locked in (with the option to increase the loan amount up to about 100k). I was kind of wanting to start smaller for my first property, and keep to around 40-50k (that way if it didn't work out, I could afford to pay the loan and not lose my house).

I'll also be transferring the cash to an LLC in order to build equity/assests for that, so that's a reason I decided to go the route I'm going. Instead of using a conventional mortgage.

Hey all, so I'd just gotten started on here, but have been interested in REI for a long time. I've watched youtube, and read blogs, but finally decided to jump in.

So one of the things I've been doing is looking over the MLS, and specifically trying to find properties that already have tenants, and are within my price range (leveraged cash deal). Seems like any way I crunch the numbers, most of these deals are turning out to be at least somewhat profitable. (Usually in the 7-8% range for ROI).

Of all the properties I've looked at and done the numbers on, there's only been a few that turned out to not look good (on paper at least).  Granted I know that 7-8% isn't great for some people, but I'd be happy taking that for my first property. 

On the other hand though... it kind of feels like I'm probably doing something wrong here.  Like why would people be selling properties that have a positive cash flow?