All Forum Posts by: Jordan T.

Not a bad idea when there's a below market month-to-month lease - I hadn't really thought of that before.  It seems like most of the ones I see for sale in my area have long term tenants paying a couple hundred below market, and if it worked that strategy would save me a lot of headaches.  Thanks

@Tom Myers Are you saying that banks are specifically offering investment property loans at 95% LTV? Or is it for a primary or second homes?

You need to include repairs and capex.  Not knowing the property condition or the year it was built, my baseline is to estimate $1,500 per unit per year.

The insurance is incredibly high, but it might make sense given the location. I'd go to a few agents to bid that out.  

Your property management costs should be under 12%, and you might get a slightly better rate as a quad.

Since it's not owner occupied, you won't be able to get 95% LTV unless you get some seller financing, or if family/friend will loan the final 15%.

Think about the homeowner (and voter) perspective on this.  Homeowners would not want to pay the cost to convert any more than you.  And the administrators who push for it would be unpopular with these voters. I would go with the planning director's opinion...you are in the clear for now. 

Take advantage of your current opportunity - a good deal and a motivated seller.  Set aside half the cash flow for this potential future cost.  In a short time you'll probably be able to refinance and pull at least some of your cash out.  In a couple of years you can follow up and see if the conversion mandate is any more likely. 

@Dawn Brenengen Thanks for the confirmation - that's good to hear from a PM.  It sounds like you're definitely managing properties the right way.  Have you ever had the trades delay your turnover for more than a day or two?

@Michael Noto  For this particular turnover, little needs to be done...some carpet and paint for a tenant that had been in there a year.  Other times for more repairs like full paint, new carpet and a few other repairs, it's been a couple of weeks.  This PM company is fairly well staffed, but you're right that I'm put in the queue for maintenance crews.  They manage 700 units, and we account for 5 of them.  Their systems and owner facing side are quite good, but I will definitely try your workaround to get a faster make-ready.  Why hasn't that ever occurred to me before?

@Jason Miller  You're right that poor performance in those areas is quick grounds for termination.  I fired the previous PM for just that.  No, this PM is very good at interfacing with tenants and customer service for both tenants and me as the owner.  And the reporting is good.  My issue with this one is in turning over units.  I need to set clearer expectations as to what I need from them, which will likely be that I want units to be ready by the 5th of each month unless there are extensive repairs required, and that they need to hire outside help if their own crews are booked.

@Steve Vaughan That's awesome how quickly you re-rented your properties.  And you'll definitely cash flow better if you spend the time to manage your own properties, especially if you manage as effectively as you're doing.  From the start I planned my purchases to use 3rd party management...I want to make myself as redundant as possible, especially now as I live a couple of hours away from the properties, and I also want the best possible return on my time.  As for your questions, this tenant had been in the property for a year, and the necessary repairs were much to small for them to take this long...I'll make sure that this particular issue doesn't happen again, or I'll be changing companies.  The PM doesn't own properties...that's one of the items I screened for when I interviewed them.  I've never called and posed as a tenant, but that's something I'll try.  I actually know the new tenant, so I'll get some feedback from them on their thoughts.

@Brie Schmidt  Thanks for the tip, I think that's a wonderful idea.

@Brie Schmidt That's a great idea...so you're basically paying him the same (or more?), but you'll be getting higher occupancy because of it.

I've noticed that I have higher occupancy with the PM of mine that doesn't charge lease-up or renewal fees, however he is reluctant to push for rent increases.  The other PM I use that does charge those leasing fees is very aggressive about raising rents.  On balance I still come out ahead with the higher occupancy.

Maybe an additional incentive would be when the PM raises rents, they can keep the first 2-3 months of incremental rent.

@Stephen Chittenden and @Brie Schmidt  I agree that's how it should be done, and I need to do a better job of setting expectations with my two PMs about turnover timeframes.  Is that a conversation you had with your PMs in the beginning, or was that already their standard practice?  If I could more frequently have under two weeks vacancy for units it would definitely make cash flows exceed my expectations, as I'm normally budgeting for a month and a half vacancy per year.

@Stone Teran That's great how fast you're moving on turnovers.  Do you plan to continue managing your properties long term, or will you end up giving that over to a third party?

Thanks for the responses! @Chuy Gonzalez @Fred Heller

@Jordan Thibodeau

I agree that it should only take a couple of days to get the property ready, especially when it's in good condition.  This one should only need paint touch-ups and carpet cleaning.  We lucked out, and someone we know (with great credit) called and wanted to move in on the 1st of the month.

I think this is a question of marketing - the PM wouldn't want to overpromise, and not be able to have the maintenance person take care of everything before the new lease, and have the new tenants moving in without the property ready to go.

But if the available date is mid-month, it would certainly turn off a lot of prospective renters, as leases almost universally end on the last day of the month.

Fred - as a property manager, how soon do you allow new tenants to move in after a property is vacated (if there are no major repairs)?  For instance, if a lease ends on 6/30, when in July would you tell them to move in? 

For tenants without bank accounts, you can try PayNearMe.  You would send the tenant a code, and they would go to Family Dollar or 7-Eleven and pay with cash using that code.  The code would allow the store to credit the payment to your account.  I'm not sure what the cost would be.