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All Forum Posts by: Larry Nielsen

Larry Nielsen has started 5 posts and replied 26 times.

Post: Typical Monthly Cash Flow / Best US Markets

Larry NielsenPosted
  • Investor
  • Venice, FL
  • Posts 26
  • Votes 18
It's ok Tim. I expected replies like this because I know it's different for everyone. Just trying to get some insight on what other investors are seeing. I appreciate your feedback.

Quote from @Tim Delaney:

Those are pretty broad questions. For the first one there is a ton of data available on markets through the BP website that you may want to jump into and analyze.

For the second one, $300 would be considered great to one person and a waste of time to others. You need to create your plan and goals and go after deals that will fit your strategy. Sorry that probably isn’t the answer you are looking for, but it is reality.

Post: Typical Monthly Cash Flow / Best US Markets

Larry NielsenPosted
  • Investor
  • Venice, FL
  • Posts 26
  • Votes 18
Thank you Samuel. I am actually looking in Cleveland. I appreciate the feedback.

Quote from @Samuel Diouf:

When looking for cash flowing markets.. a lot of investors, including myself, are looking in cities like Cleveland.

Cleveland currently has one of the lowest price/rent ratios in the Nation, with the average home price being $107k and the average rent being $1,416/Mo.

When investing in high cash-flow markets, I always recommend working with an investor friendly agent so you're able to gain the right insight on the different areas and the risks involved.


Post: Typical Monthly Cash Flow / Best US Markets

Larry NielsenPosted
  • Investor
  • Venice, FL
  • Posts 26
  • Votes 18

Hello Fellow Investors,

I am looking to acquire more long-term rental properties. I would like to ask the following:

1. Which markets (Cities, States, Counties) are producing the highest cash flow while keeping purchase prices under 100K? Considering a DSCR loan with around 20% down. (I know there are many variables but generally).

2. What are the typical monthly net cash flows you are seeing in these scenarios? Is $300 per month net post tax cash flow considered decent? (Again, I know it's preference and variables but generally and in your personal opinion with your experience).T

Thank you in advance for your input here.

Post: Raising Rent on Newly Acquired Property

Larry NielsenPosted
  • Investor
  • Venice, FL
  • Posts 26
  • Votes 18

Thank you for this perspective Alecia. Makes sense.

Post: Raising Rent on Newly Acquired Property

Larry NielsenPosted
  • Investor
  • Venice, FL
  • Posts 26
  • Votes 18
Thank you Scott. I appreciate this feedback. It makes sense as well and seems non-controversial or at least as much as raising rent can be.

Quote from @Scott Allen:

@Larry Nielsen Sounds like a very long term tenant if their rent is that low and they've been reaping the benefits of it being low for at least the past 3 years. There is a chance their unit is also pretty dated compared to the others or others in the same neighborhood. It's beneficial to you that their lease is about to come to an end. You can make a new lease with that tenant proposing a rent raise anywhere from $300-500 but you have to be able to justify it (maybe the property doesn't have central AC, maybe you're planning to do some other type of updating but that can be hard when they're physically living there still if its a bathroom or kitchen) and I would also make it so that that rent increase would go up after 60 days of them signing and agreeing to that new lease. 

Depending on the tenant and what their financial situation is, you might also be better off giving them a 60 day notice and just telling them that you're planning to move into the property and do some updating. 30 days is usually too short for someone to have to move on, 60 days is plenty of notice for them to be able to pack and find another place. If you want to propose 30 days for them to leave, offer a cash incentive so that it makes them feel like it's worth leaving sooner. Do it all in writing with notices and make sure to document it with photos or have a manager handle it. 


Post: Raising Rent on Newly Acquired Property

Larry NielsenPosted
  • Investor
  • Venice, FL
  • Posts 26
  • Votes 18
Thank you Drew. Seems like a really sound practice. I like it.

Quote from @Drew Sygit:

@Larry Nielsen 

We’ve found a great way to raise rent is:

  • Determine market rent
  • Share the proof with the tenant (they can see it on Zillow anyways)
  • Tell the tenant, given your rent is $x and market rent is $y, what do you think if a fair increase?
  • Often, they may volunteer a higher amount than you were hoping for.
  • Those that respond “$0” or something ridiculous, you can request income documentation from them to justify.
  • Don’t be afraid to share with them how much your property taxes & Insurance increased and that YOU cannot afford to absorb them.

ALWAYS get an increase or something of value annually when rents are increasing or tenants will start thinking they should never have an increase, making future increases that much more difficult to negotiate.

@Jonathan Greene we've been promoting this tactic for over 15 years:)


Post: Raising Rent on Newly Acquired Property

Larry NielsenPosted
  • Investor
  • Venice, FL
  • Posts 26
  • Votes 18
Thanks Greg. I appreciate your input as well here. Something to think about.

Quote from @Greg Kasmer:

@Larry Nielsen - I like the strategy Jonathan Greene outlined to provide good, updated information to tenants on the market rents. That gives great context to the tenant. I bought a quad this year and had my property management company do a similar thing, but the only wrinkle was 2 tenants moved out and a 3rd was about to, so instead we negotiated "two stepping" the rent increase with the third tenant. A $200 increase now and then another $150 increase in 6 months. I didn't want to have three vacant units at once, so I tried that approach with the 3rd tenant. I'm in the processing of renovating the two units from the people that did move out. Good Luk!


Post: Raising Rent on Newly Acquired Property

Larry NielsenPosted
  • Investor
  • Venice, FL
  • Posts 26
  • Votes 18
Chris, great points as well and something to think about.

Quote from @Chris Grenzig:

@Larry Nielsen I like Jonathan's suggestion, but I think an important decision for you is what is your goal. If this is a longer term hold and you don't need the extra $500 per month and you'd be fine with a $200 per month increase, go for that. You can always raise it again in 12 months on their next lease. 

Also, always be careful with very long-term residents that are far below market rent, it's very possible there are issues they live with and don't say anything about because they've been there so long and they know their rent is cheap. We've had it happen before, nothing major, but just some extra money we weren't originally planning on spending to turn a unit. 


Post: Raising Rent on Newly Acquired Property

Larry NielsenPosted
  • Investor
  • Venice, FL
  • Posts 26
  • Votes 18
Thank you Jonathan. Also good points and this sounds like a good strategy to approach it. The tenant is going from annual to month to month as of November 1st possibly anticipating it anyway.

Quote from @Jonathan Greene:

Listen to an old episode of the BP main podcast with Dion McNeely. It is the best rent raising strategy tactic I have ever heard and it always works (if you like the tenant). If you don't look it up, the general tenets are this:

1. Present the existing tenant a PDF with all of the rental comps and Rentometer printout showing what the market rent is.

2. Ask the tenant to come up with a reasonable offer based on the data so you can work together to keep them there.

Almost all tenants come in $100-$150 under the market rate.

It's a win-win. No moving, a little under market, but same good tenant.


Post: Raising Rent on Newly Acquired Property

Larry NielsenPosted
  • Investor
  • Venice, FL
  • Posts 26
  • Votes 18
Also very good point, Nathan. Thank you.

Quote from @Nathan Gesner:
Quote from @Larry Nielsen:

It's actually quite simple. You buy the property, you give the tenant notice of a pending increase, they pack up and leave, then you spruce it up and rent it at market rate so it's a profitable investment.

When egg prices double, do you think the local grocer cries in his coffee every morning about how inflation is impacting his customers? No. It's not his fault the market drove prices up. He's operating  business, taking the risk, providing a service to his community.

Your tenant should be thankful that he saved so much money over the years, but he's more likely to feel entitled and that his rent should never increase. But that's not your problem. 

If the tenant wants to stay, verify he can afford it. Offer to give him a slight discount if he stays, certainly no more than 10% below market. He can stay and pay, or he can go and pay someone else.