All Forum Posts by: Chris L.

Mike,
I think the type and quality of renters is region and specific location dependant. For instance, the midwest has generally lower housing prices which makes the possiblity for a profitable rental business. Within Fort Wayne, You can spend between 15K to 150K for a rental house. The 15K house will rent for $450-$550 while the 150K house will rent for 1k-1.2K. While you will are more likely to get a more reliable tenant for your 150K house, you will be lucky to break even. The profit margins work best for the lower end homes in my experience but you do have more tenant issues. (That is why I find my property manager to be worth every penny that we pay them.)
We do not have any "warzones" in Fort Wayne but most tenants at the low income scale are living paycheck to paycheck and are usually one life event away from not being able to make their rent payment. With that said, they need a place to live as well and many of them are reliable long term renters.
Good luck. If you do not find the right numbers in NJ, there might be some other areas that will make the numbers work out better.

Hey Kel,
That is a great question and Scott that was a very good and comprehensive response.
I have a property manager and this is actually our 2nd round in the rental business. We had 8 duplexes in round 1 and managed our own because we could not find a good property manager,
Before we ever looked at a single house to start round 2, we interviewed property mangers. (round 1 was about 5 yrs ago)
Having a competent property manager has made all the difference for us. My job is pretty consuming and my wife is busy with the activities of our three sons. We did not want to babysit tenants. However, we learned a lot managing our own properties during round 1.

Here is what I have learned from my current property manager: they have properties of their own but they do not let the tenants know that they are the owners. They represent themselves as the property managers which they are. This seems to keep the relationship much more business like. They also recommended that we not use our last name as part of our LLC. This is not meant to be deceptive but simply to limit access by the tenant to the property manager and not the owenr. There is no reason for the tenant to have access to anyone other than the property manager.

A competent property manager has made a significant difference for us and they are worth every penny that we pay them.
Good Luck

I would recommend that you ask for the name of his supervisor and commander. Call and speak with his supervisor to verify his story. If the supervisor will validate his story, he will also be an asset if the member falls behind.
We do move a lot in the military but 15 times in 10 years is a bit out of the ordinary.
If the individual is unwilling to provide the supervisors name and number, I would move on.

That is precisely why my wife and I sold our duplexes. Not exactly the same situation but we had continual problems between tenants. We now only own single family homes and that has worked much better for us..
I agree with Mike about having the neighbor call the police. Review your lease, we had a clause concerning police complaints. Our worst situation was not resolved until their lease expired and I did not renew although they begged us to renew their lease.

Roger,
I would be interested to know what you have to offer.
I don't understand the secrecy.

Mike gave you a P&I of 432 per month.
A general rule of thumb says expenses will run 50% of income.
you can calculate manually but it will be pretty close with those tax rates.
I still wonder how the tenant pays the utilities if there is only one furnace.
If you have to pay anthing as the owner the water is usually the least costly option until they decide to set up a summer swimming pool or some other option that drains lots of water. Water bills can run high when someone leaves a faucet on for an extended period of time.
I also think Mike gave a pretty good target price to make this worthwhile.

Matthew,
Important point, if there are true separate utilities, there will be 3 furnaces and hot water heaters.
If the owner pays utilities, I would advise to stay away.
I am purchasing strictly SFH's right now but I will not buy anything where the owner pays the utilities.

Matthew,
Is that $1200 total rent or $1200 each?
Even with the low number this deal has potential depending upon the condition of the unit.
Some basic questions that I have would be:
1. Condition of the unit. (deferred maintenance Items that could be coming up in the near future) Just because you have long term tenants does not mean that you could not have mx issues. I usually check the bigger ticket items: Foundation, Furnaces, roof, Electric, plumbing, siding/paint.
2. Property taxes.
3. Tenant turnover in that area
4. Insurance rates for that unit
5. local area environment

Some of the other guys may have longer checklists but that is the quick list that I look for.

This has potential.
Keep digging!!

KT,
Welcome to the site anyway.
If you are new to investing, many will help analyze your numbers if you post them on the site.
Good Luck

KT,
Are you the same KT (USN retired) from the Dodgers site?
Chris "Lex" Luithly
Welcome by the way.