All Forum Posts by: Kristopher Hanks

@Boris Alayev

This will be my first run through the reassessment process so I can not speak from experience. The rental that I spoke of is owned mortgage free. I have room in the cash flow to set aside an extra 15% of gross rents per month to get ready for tax reassessments. I will look at where it lands to see how far they want to increase it. I will then rinse and repeat the process over the next 36 months based on the amount of the increase. The percentage of the increase will tell me about how much I will need to set aside for the next 36 months. That could be 10% or 20% of the gross rents. I will not know until I receive the reassessment. 

Those that have mortgages on their properties, I feel for you. You have less wiggle room. I cash flow $500 per month on this house and I have a rent increase plan set for every 12 months to absorb the increase in taxes and maintenance. 

@Henry LiChi

The biggest problem I see, if I added correctly, is the investors expenses exceed the gross rents every month. 

The Maple Heights property looks like the monthly expenses are $1,869.63 according to your numbers and the gross rents are $1,663. That is not an investment for the person buying the property. Maybe for someone who can't get financing this could be "a way" to start investing in that market, but they would be negative $14,877.36 if everything went exactly right and rent stayed the same over the 6 years. Plus all the interest that accrued on the property during that time if they had a period of vacancy that was not planned for. 

The exact amounts are obviously subject to changed because the future is always unclear. However, I would find it hard to believe that anyone that has basic knowledge of income vs expenses would think this would be a good deal. 

It would be a great deal for you though. 

For existing owners it is important to increase rents, if possible, every 12 months to offset this cost increase. I took that into account with a performing rental I have on the south east side of Cleveland. I have the reserves to absorb the increase. I also have a plan in place for increasing rents every 12 months to build the reserve back up after the 3 year reassessments cut into that reserve. 

@Emiel Barbosa

Euclid, South Euclid, Maple Heights, Garfield Heights, Warrensville / North Randall area. Try targeting these suburban surroundings of Cleveland around the Amazon facilities. I think long term you can make out in these areas. 

@Account Closed

Nicely Done! Sounds like life is changing very quickly for you. It is going to be amazing to secure freedom. 

@Andy Mirza

Great information! Thanks for passing this on to us. 

I can't wait until I am putting up a thread like this! Hey I have this awesome problem....can you all help me out with this decision that is going to gross me over $60k in the next two years! LoL. This is great. I love to read about these great problems. It is a good balance of the bad issues that we try to help with on here. 

Loving the wife and kids banter in this thread. Oh, and there is a lot of great REI advice in it too.

@Dori Rutledge

My lease puts the responsibility of pest control on the tenant. There are many variables that can cause pest issues. A lot of those variables are caused by the tenants themselves. What do spiders eat? Bugs. Bugs usually like to show up in unsanitary conditions. Perform a safety inspection in the unit and see if it is clean. You may find that the tenant is messy and causing the conditions that led to the spiders showing up or maybe they have nothing to do with it. You won't know unless you go look. 

A former tenant had a rat problem. Come to find out they left food and trash all over the house. They were living like savages. No wonder why the rats liked their house. 

@James Wise

Love that analogy. You are paying for the labor of others, plain and simple.