All Forum Posts by: Levi T.

What happens in August to support that theory? (Just curious) 

Just because someone makes a cash offer, don’t mean they closed with cash. It’s easy to keep cash around on paper, and secure banking funding before closing. It’s just a hurdle.. If one fails, then they better have the cash, or lose the deposit.. 

 Ok. I’ll ask him.

When we do the move out disposition letter, we tell them they have 30 days to pay it, or it goes to collections at 50% higher. We have everything in the letter, damages, turnover fees, etc. 30 days later we tack on 50% to the balance as legal cost for collection fee, and kick it out the doors to collections, running at 6% on top of that. They can quickly go from 3k to 4.5k, quicker than you can blink. After that, if they pay it in collections before it hits their credit, your still are getting 2.7k. If that fails, let the collection people do their thing for 12 month, then have it turned over to an attorney for garnishment, BUT, have the attorney offer the old tenant 40% of the debt, if they pay it in full before court. Even the hardest of tenants normally pay it, as they know we are coming for their paychecks, accounts, tax returns, etc, once we are in court. You still (mostly) win what was owed at square one if you do the math. 

 Sure, I’ll ask my guy for a referral, but before that: does all your leases have signers and co-signers DOB, SS, last known phone, etc?

Also add collection terms for legal fees, collection cost, state level interest rates. For example, if we kick our lease to collection, whatever the debt is, gets 50% tacked into it for collection legal fees on the front end, and 6% APR after that.. I think Texas allows 10%.

You are correct that most landlord papers only get between 1 to 3%. I only know this because the collection company I use, informed me that we collected 19% last year, and 20% this year so far. They also told me they had only one other client that collects more we do. We are working hard to improve that process daily. Every portfolio is different, and there are companies out there that would be happy to buy your paper.

I owned a cabin down the hill in Slaty Fork, just past the gas station, for a while. It did good. Paid for itself and profited 10k per year, but you got to watch out for collage kids who want to party hard. Debbi Goodwin is great PM for off mountain rentals, snowshoerentals.com. Snowshoe keeps a tight grip on the condo rentals, and they do rent well. I’ve spent more than a decade biking and skiing out there, so I know it well, so if you have questions..

What is the current T12 NOI, vacancy and delinquency rate, condition of properties?

I think you covered that in your opening post rather well. I just wanted to highlight the element that people need to not look for big construction projects, but instead look for cheap deals.

I started with rentals in war zones, and spent far to many cold winter nights knee deep in raw sewage and flooded basements to count how many mistakes I have made over the years.. Just as much as I am likely working on a few new mistakes as we speak.

We only make mistakes when the conditions are not just right. If you buy it cheap enough, you can afford a lot of mistakes!

Agreed, it takes a lot of work to find those deals. I’m closing around 5 of them every 90 days or less, so it’s doable. That upfront work is far cheaper than the ladder. 

@Matthew Irish-Jones I have been at this for over a decade. The amount of wealth it has created has allowed me to move from single family properties, all the way to 100+ multi family value add deals.. The mistake I see people make is expecting to buy a property that needs big construction rehab, like what you see on HGTV, and that's all wrong. The goal is to buy it for cheaper than it's worth with as little work as possible, not buy it and make it worth more. Case in point, I bought a house recently for 130k, it appraised as is for 300k. I sent a carpet install, painter, and had a handyman do some basic with lightbulb and such, then had a cleaning lady wrap it all up. My cost was not even 5k. I then proceeded to refi it a month later for 150k, and rent it out for $1,850. When folks buy pigs and try to turn them into unicorns, that's when they can get in trouble with BRRR.