All Forum Posts by: Lori Williams

I only invest in Youngstown. It's great for cashflow if you're willing to invest in the right neighborhood and do the right rehab.

He said he didn't see a name on the box, so it can't be Select Surfaces.

I've had it in the LR, DR, Bedrooms and hallway in my first property since late 2016 and it still looks great. I put the laminate in a family room at once house a year ago and it was destroyed in a month bc the renters didn't take their dogs out regularly and also didn't clean up the resulting pee on the floor (dogs were great, their owners were awful). 

Maybe Sam's carries another brand as well? I don't know. But I LOVE the laminate from select surfaces - it's nice and thick and wears well. I'm not a huge fan of vinyl plank at 5mm, bc it just seems thin (the first SS vinyl I used in that first house was only 3MM - and it's still looking great, it's just THIN)

I've also used the Lowe's vinyl and really like it (it's made by the same company who makes the HD) - Lifeproof and.... forgetting the name at the moment. Both are made by a bigger company. It's all about finding good quality and a decent price (thank God for sales ;) )

Quote from @JD Martin:

I recognize that box - that comes from Sam's Club. 

 I've used the Sam's Club laminate and vinyl (Select Surfaces) and I've had great experiences. And their boxes are always marked with the name. Is there some other flooring sold by Sam's?

This is one reason I don't want to rent to students. I hope you had their parents co-sign and put down a nice size deposit.

I love animals and I allow them in my properties if they are spayed, neutered and up to date on vaccines AND the tenant pays a sizable, fully refundable (if no odor/damage) pet deposit. I also get first, last and security from all tenants. 

I feel bad for the cats, but not for the students.

I'm in Youngstown, OH and specifically buy distressed. Youngstown is a lot less expensive than Columbus, Cleveland and even Akron, and I don't know any place in this city you can buy a turnkey property in a C neighborhood for 30k.

I bought a distressed property in a C- (then) neighborhood in 2016 for 23k, but then I spent 60k turning it into a B-B+ property. I also net 1k+ per month.

200.00 profit per month is not enough. You need to make enough to fix a roof, replace a furnace, put in new flooring if they sneak a dog in, etc. 200.00/mo can be eaten up by a hefty insurance/tax increase (which seems to be a thing now). You can lose a year's profit just putzing around between renters (paint, repairs, etc).

I don't think 30k would buy you a turnkey section 8 in a D neighborhood. AT best, it would buy you a very distressed D neighborhood property that you'd rent cheap to low income without section 8. A 30k house is going to put you in a higher crime area where renters don't stick around and damage your property before skipping out. None of this is what you want as an out of state landlord.

It's far better to use your 30k to JV/partner with someone who lives in the area you're buying in OR buy in a better area and use the 30k as a down payment.

Feel free to message me if you have any questions. I can probably help you find some options out this way.

Most meetings I go to I'm in a tshirt, sweatpants and tennis shoes with paint and joint compound all of them (but they are clean!). Sometimes I take the braid out of my hair, put makeup on and wear casual dress (without the paint and mud). And I usually take them through my properties so they can see my work. What *should* matter is the deal and the work I'm willing to put into it. 

I wish I was in a position where all I had to do was shower, do my hair and makeup and look nice, I really do! ;)

I started with a class C/D neighborhood, but I'm intentionally turning it into a Class B neighborhood, so I never had to deal with class D tenants.

Most class D neighborhoods have higher crime rates (putting your property at risk), low end tenants who are high risk of not paying their rent (why would a section 8 renter rent in class D when they can rent in class C?) and damaging your property, precisely because they are class D renters. 

It might be better to invest a little more and be in a class C neighborhood, where you'll get better rents, have a little better class of renter, and less risk overall.

I know a lot of investors rent in class D neighborhoods, but the reality is it's usually a conveyor belt of renters, damages, fixes, rinse and repeat. Your property values really don't go up (and may well go down). Your rents are low and may go down as well.

You buy a 10k property in a crappy neighborhood and the amount of rehab you have to do is probably in the neighborhood of 60k- 70k or more (roof, furnace, wiring, plumbing, mold remediation and other things to bring it up to code). And the house won't be worth 30k when you're done with it. And think what type of person would want to rent that house (because even after putting 50-70k in it, it probably won't be all that pretty and the properties surrounding it certainly won't be)

At that point, you have 60-80k in it, and you can buy a 60-80k house in a different neighborhood that's better, put 50k into it because it's not as bad off as the other house, and have a house that's worth 100k+ when you're done with it. It will qualify for financing, and then section 8, or you can get tenants who are employed and will pay their rent on time.

If you want a 50k house that's not entirely crap in a bad neighborhood, Cleveland may not be the best market, just because the prices are high. (Also, my examples are more Youngstown than Cleveland because that's what I'm familiar with)

I don't know. To me, it doesn't make sense to wait til the rents "catch up". How long do you have to wait for that to happen? In his case, he will collect more rents than his monthly payment. BUT not enough to actually have a return above 1% on the cash out of pocket. For him to even get a 5% return on his money, his rents would have to increase 30k per year (on a 4 plex) - or a little over 600.00/mo each. And I think there are laws that prevent him from jacking up the rents that high. So basically, he's treading water cashflow wise and getting some write offs for the depreciation on the property (it was already rehabbed, and the guy who sold it to him made 500k in a year by doing the rehabs). 

When you rehab, you expect to pay holding costs for 3-12 mos depending on the level of rehab and how long it should take. But once it's rented, you should be profiting every. single. month. You should collect enough to pay the debt service, put something in escrow for vacancies and repairs and pay some of your own bills, and your DSCR should never be below 1.5 (that's my opinion, some may disagree). Your rents should be 1.5% - 2% of your purchase/rehab total (again, that's my opinion, some would say 1%). In any event, it needs to be enough that you are gaining income AND the property will pay for its own maintenance, including big ticket repairs like furnaces, roofs, etc.

Quote from @James Wise:

Niiice. Lots of opportunity out there in Youngstown.

 Mostly because people tend to overlook us and buy in Cleveland and Akron. That said, not every area of Ytown is a good buy, even if the prices are low.

Quote from @Becca F.:

@Lori Williams

Your situation and your stepson's is a great example. 

Becca, he just bought a 4plex for 1.4M in Long Beach. I was stunned that his rents are 2k - 2500.00/mo.

Then, to make the numbers work, he had to put down 40% or over 600k. But apparently he is banking on increased value of the property to resell, because he's getting effectively 0% return on his cash out of pocket.

In our position, we don't care about resale value atm because we are doing this for actual long term income. So our properties are gradually increasing in value as the neighborhood revitalizes, and then we use forced appreciation to take it up a notch. Our investors get a share of the refi cash out, and then a percentage of the monthly rents. And once these current 2 rehabs are completed, we'll be putting a little something in escrow every month to cover the vacancies/repairs so the properties are covering their own expenses.

What we've found helpful is our properties have such a high NOI, that if there were a disastrous downturn in the economy, we have enough room to lower our prices and still make above average NOI. Since we never know what can happen economy wise and we have no real control over it, we won't buy anything that gives us razor thin margins.