All Forum Posts by: Justin V.

@Anthony Caraballo

I’d recommend getting a W2 job with your degree and do flipping. You went to school so I assume that you have some passion for your field of study. My w2 makes financing deals and funding flips easier.

Your 9-5 pays the bills. Your 6-10 builds your empire. - somebody’s quote

@Chris Wilkening

I’m not a cpa. I started with TurboTax, but I recommend you skip that garbage step. Get a cpa who also owns rental property in your state or better yet you area. My CPA has more than paid for himself and is a high value member of my team with loads of real world advice.

@Matthew Banks

I have a personal line of credit, but the interest rate kinda sucks so I don’t use it.

Kind of similar...

I have a heloc and it’s really very helpful. BasicAlly a Low interest credit card. I told them I wanted to use it to buy and repair rental properties and they didn’t have a problem. My realtor put

Me in contact with a lender and since she didn’t do helocs she put me in contact with one that does. Rockstars know other rockstars.

@Matt Kelty

Good responses already.

Rentometer for historical info. Zillow, craigslist, and apartments.com current “for rents” to know where the competition is at.

Zillow owns/partners with trulia and hotpads, so don’t feel the need to look at more than 1 of the three.

I go high end in my market and list at the high end (75th percentile on rentometer usually), but quickly reduce rent as needed.

Current process is (under development):

If occupied I list 2.5 months out.

Don’t bother with anyone who can’t move in/start paying rent the day after the end of the existing lease.

~5 days at my starting price then drop price unless background check, lease signing, and deposit under way or getting close.

$25 to $50 rent drops based on how serious of interest.

~3 days at next price and repeat.

I always charge a monthly pet rent of about $25 per cat and $35-50 per dog in my area based on size and age and discount $10 off for the second pet. I feel allowing pets is a niche, especially big dog owners. I haven’t encountered an irresponsible pet owner yet in my market/price point.

If the unit is vacant talk to people with move in dates less than 2.5 months out and be ready to strike a reasonable deal with people who can move in sooner since you don’t make money on a vacant unit. Reduced rent/not charge for a few days early move in, reduced/waived pet rent.

Good luck.

@Pete Storseth

If anyone tries to get you selling amway, Herbalife, or any of that other mlm crap... run ;)

@Anthony Angotti

Anthony has it right in my opinion. Learn how to do all the things, so you can better communicate with contractors and learn the difference between good and bad work.

I started doing everything myself and feel like I know a great deal about home renovations. Now I try to work more on my business than in my business, but I often hang out near contractors while they are doing their jobs so I can see what tools and fixtures they use. Worth every bit of money and w2 pto to learn the easier or better way.

Top discoveries so far: electrical boxes which are depth adjustable, pex supply lines, sink drain wrenches, and handheld ratcheting abs cutters, cutting in paint without taping (the Idaho painter), Wagner paint sticks, and heat gunning drywall mudd for a quicker patch.

On contractors get a handful of rough quotes (~7) over the phone on each item, 3-4 in person walk through bids, and pick the person to do it. Write it all down and don’t be afraid to try the second guy next time. Having a longer list of people to call when you need them is good to have.

I also feel the need to be able to turn over a unit (or two) in a night so I can have zero vacancy between tenants. This is where the learnings pay off for me.

My exceptions to do everything once: refinishing hardwood floors (seen enough diy debauchery), granite countertops and tub reglazing (cheap enough to have done and too specific of tools/chemicals for me).

@Ian Salinas

I’m a pretty small duplex investor in Minnesota, but I’d like to share my thoughts and questions which may inspire more thoughts.

Get to know your local laws and start talking with a real estate attorney on what your worst case (eviction) looks like and how much it will cost in fees and unpaid rent. My 1 eviction totaled 5k and 3 months of vacancy before the renovation and caused my wife and I to miss a few days of w2 work. It went through on the first pass.

If you are just getting your start and need to brrr it to build your empire, accept that you need to be the bad guy and make the tenants to move out or consider adding “delivery of the property vacant” to the contract with the seller.

How much does rent need to be for it to cashflow? Is your family friend giving you a deal if it doesn’t cashflow as is? Is this property the right deal?

I’ll keep tenants that are kind of messy as long as it isn’t damaging or smelly. It’s very hard to get bad smells out of things.

How much more above the average rent will you get after renovating? And what kind of renovation do you need to do?

Finally an anecdote to an already long post: I have a tenant at $170 below average rent of $1300, but her unit still cash flows. The floor above her is finished well and rents for 500 more per month. Her unit will be a full gut (paneling over bad lath and plaster) when the day finally comes that she has moved on. I am happy to keep her as a tenant because she keeps tidy, pays on time, doesn’t smoke, doesn’t ask for much, and is super nice/respectful. Refi came in about 50k-70 less than if it would have been done up, but I don’t necessarily need that loan for the next purchase/project. If this had been my first purchase instead of my 5th, thing might have gone differently or I might have passed.

-Justin

@Alfonso Aramburo Zepeda

1800 sq ft floor - Wood look Vynil floor $2000 USD

70 sq ft Corian/Solid Surface - $1200 USD 

Cabinets Hardware- $200 USD

Refacing Cabinets- $3000

Paint Outside - $800

Paint Inside - $400

Total+35% unexpected repairs- $10,000

Is your repairs estimate just for materials?

$1 per sqft vinyl installed sounds to cheap to be true or at least too cheap to be quality.

If the cabinets are falling apart, will refacing keep them alive?

Paint seems way too cheap and something I typically hire out since the labor is usually cheaper.

If it’s dinghy, sounds like you offered too high to start. Rescind your offer and try again in a month maybe. Good luck.

If it looks like work, many will be put off. Make it worth it with a lower offer.

-Justin’s

@Andy Diaz

Hang in there. A bad deal at this stage of the game could be a killer. Hard to want to keep going if the first buy is a flop with mean tenants and garbage cashflow. 
As someone losing patience, how many deals have you analyzed online and how many have you seen in person? What does a deal you would pounce on look like? My funnel has typically been 30 online postings analyzed, 8 houses looked at, 1 offer made/negotiated/agreed, but I’ve heard many people’s funnels are much larger and not working as well these days (requiring a higher starting point). My last mls deal was winter 2017. Networked an off market deal in January.
-Justin

@Jonathan Basden

In my experience refi appraisals come in low. 20k below market value is not unusual in my experience. I’ve heard the big bank appraisals are even more conservative. I’ve challenged appraisals with limited success. 11k boost once and a 20k boost another time. Start by pulling the comps, and looking for pictures and info online. Try to find errors In the comps and your property to argue the appraisal. Good luck. Also, don’t trust zestimates or the like.