All Forum Posts by: Lucas Miles

@Ryan Pederson a lot of this really depends on your market and the tenant class you hope to be attracting. If the property is in an area that has A class tenants, maybe stainless steel, more expensive appliances are needed/justified. If your in C class, working class people, probably not worth putting in fancy appliances. Do some research of other for rent listings in your area to determine what is expected, and if you think you can push rents with these type of upgrades. 

We have properties in C class area, working class residents, and we have developed relationships with "appliance repair" type shops that fix up used stoves/fridges. For our tenant class, we just need a basic working stove/fridges and are able to go this route and save a bit of money on appliances. 

@Ryan Auber an option would be to partner with someone who has a stable W2 job, higher net worth, more experience, etc that will sign on the loan along side you. From a bank underwriting standpoint this could help you qualify for your next purchase. Reach out to some local investors in your area to see which banks are investor friendly, reach out to that lender to get an idea how they view you, and what else you need to do for them to lend with you on another investment property. 

@Gavin Gates If you put something under contract make sure you have 1. An inspection contingency and 2. A finance contingency. Once you have under contract, get a reputable home inspection to do a detailed home inspection. This is worth the ~$500 to do the inspection 100% of the time every time. If they find something during the inspection (which they will), you can go back to the seller to ask them to fix it, or ask for a credit at closing. Don't get super picky about nickle and dime type items, but you will easily find things that need to be fixed to cover the inspection fee cost. If they find something major, and seller isn't willing to work with you, then u can back out of the deal (and get your earnest money back). Finance contingency in case you are unable to secure a loan. Work with a lender to get preapproved before you start submitting offers!

@Riley Barclay interest rates going to historically low rates was a huge driver in pushing the 2% rule to 1% on average. Investors could afford to pay more for the same piece of real estate as debt service price was lowered. As rates are continuing to rise trends will likely shift back towards 2%. Highly dependent on different markets, key is finding what works in your market or determine a strategy and find a market it does work in. 

@Alejandro Valbuena Property management is an absolute critical component in real estate, but is extremely labor intensive and with relatively low pay in relation to the duties/responsibilities performed. Starting a property management company just to manage other people's properties? --> No way, not worth your effort or return on your time. The majority of property management companies are formed by rental property owners to manage the properties they own, then it might make sense to start managing for other people as you already have the systems, staffing, etc in place. Owning real estate is where the benefits come from, cash-flow, appreciation, debt payment, tax benefits, etc. Being a "property manager" for properties that you own is a common place to start, often as you grow turn your properties over to a property management company once you have better use for your time. 

@Percy N. We have been to a council meeting twice now with no luck. Thanks for the info!

@Henry Lewis have you already paid him? If not have him come and complete the job before paying him. If you've already paid him, ask him to come finish the job, if he won't then probably don't work with him again. Get someone in to finish the job, and don't pay until the job is complete in the future. Small price to pay for learning. Likely not worth your time or money to try and take "legal" action just for a incomplete window installation. Dealing with contractors is absolutely a skill to learn, and  may just be a minor bump in the road for you.  

@Nicholas D. another factor on ACV vs replacement cost value would be events where there isn't a total loss, example hail damage requiring replacing the roof for 15k. Replacement cost you should get the 15k (minus your deductible), ACV factors in the actual value of your roof through depreciation. If you roof is 15 years old, insurance company could determine you will only receive half of the 15k due to the age of the roof. Comes down a bit to your risk tolerance, and do you have reserves to cover major events that aren't a total loss. 

@Bruce Woodruff We did go to the city council and they declined to change the pricing. 

@Jenny Caldona Do you know what law/statue these buildings are protected under?

@Josh Oaten The $90 are base fees, so not based on our usage. The amount they are charged us for the usage is very small so isn't a factor here at all. Passing the water bill to the tenants, isn't done at all in our area so would hurt our vacancy. 

Thanks for the responses! 

@Jalpan Jangiani This probably comes down to how much of a down payment you can afford. If you can afford either a duplex or a 4 plex, then I would keep your options open (duplex, 4plex, triplec etc). Managing a duplex vs a 4plex isn't much difference, so I wouldn't limit yourself to only a duplex provided the financing isn't an issue. Focus on finding a great deal!