All Forum Posts by: Luciano A.

@Dave Foster

Thanks for the response. So is this guy giving advice to other 1031 companies wrong?

https://www.1031exchange.com/1...

@Peter Nikic

Sorry I might not have been clear in my post. I am in process of selling a multifamily and wanted to use those proceeds in 1031 to do what is called a 1031 Improvement Exchange. The lot is a separate property that I already own and have already paid for the drawings and permits. I learned that I can use 1031 money towards a build but the only thing that wouldn't be included in the calculation of like exchange is the cost of the land. The build will cost more than the amount I would need to fulfill the exchange requirement of replacement value. That's why I was asking Dave since he handles many 1031 if he has ever done a 1031 Improvement Exchange for new construction. 

Here is a link that helps to explain what I am looking to do. This if possible is a game changer for what I do. 

https://www.1031exchange.com/1...

@Thomas O'Donnell

I think some people have misconceptions they don't need to screen a Section 8 applicant because their income is paid by Govt. Screen them like you would with any other prospect. As @Jewel B. mentioned winter is not the best time to list given holidays and the cold weather. However, you might have to look at your screening criteria and see if it meets the prospects for that area. For example, expecting 680-720 might be an overreach if your area is mostly people with 580-650. A score alone won't tell you the whole story. Look at the overall applicant and see if they meet most of your criteria. Do they make 3x to support themselves and pay their portion of the rent. 

Section 8 recently increased what they are willing to pay for rent which in some parts of our city is more than what others pay. 

The idea that anyone taking section 8 doesn't care about their property is BS. Screening, and being patient to only rent to those who meet the criteria is important. The notion that you list a property and it's rented in 2-3 days is starting to fade out as more properties come on the market for rent. Listing it at the right price and having it nicely updated and rent-ready is important more than ever. 

Be patient and don't rush as that will lead to more headaches and foolish decisions.

Best of luck 

@Martin D.

I learned a long time ago that having cool gadgets at your personal residence is cool. In a rental property if you have to read a 5 page manual on how to do anything it's best not to use it. A simple none programable thermostat is the best way to keep it simple and less frustrating for a tenant. 

Our in-house property management company focuses on making things easy for our residents so we stopped using smart tech in our properties. Many years ago when the USB/plugs came out it was a hit but as Apple and others change their charging cords we would have to go back and update those plugs. So now we try making out back-end software the focus and keep all the shinny stuff that looks cool out of our properties. 

Best of luck 

@Brian J Poulson

I would make sure PM is using a SUPRA and not a lockbox. Many PMs will put lockboxes because this way they can give codes to prospects or buyers agent representing a tenant might just give and get paid a commission without doing much work. A lockbox code cant be changed as easily so anyone can come in after a showing using that code. 

I would suggest buying Simplisafe or motion cameras to install in the house as it sits empty. This will also help you monitor how many shows you have and if PM is checking on the property on regular bases. After it gets rented out just have PM send back to you and you store for next time property is empty or if you have other rentals to use it in.

Best of luck 

@McKenzie Bagan

Here are a few suggestions so that you can protect your asset while you decide on what you will do next. Get a SimpliSafe alarm system because they don't require WiFi to make it work. Having motion sensors around the house will make it easy and give you peace of mind knowing what is going on at your property. In addition, I use cameras (Reolink) that don't require wifi and give you live feed with a motion sensor that will record as needed. When you call the police to report a break-in in progress and you have both a camera and alarm they respond to the call faster in my experience.

I have made a lot of money in what some will call C/D areas of town. Any property can rent if the price is right. Regardless if it is the hood, I always fix my properties so that I can attract the best people living in these areas. Not everyone in the hood is a drug dealer or bad person.

Section 8 has updated its rent rates so that is something to look at. Section 8 gets a bad rap but just like you would screen regular applicants you will need to screen anyone on section 8 the same regardless if they aren't paying the full rent. 

If you want to sell but having a hard time then try doing rent-to-own or owner-fiance with a wrap-around mortgage. You can ask for a very low down thus attracting someone who really wants to own versus rent. You can get some positive cash flow from that but you should talk to a CPA about how you can report that income on your taxes as it is taxed differently. 

You bought this house because you felt was going to be a good investment. Do some homework on why your property isn't getting attention while others are. Ask PM to send you local comps, and days on market. 

I wouldn't run just because things got tough. Fight a little then make the decision if you want to quit and move on. 

HGTV has given many a false sense that RE is easy. BRRR is hard to achieve in today's market if you aren't hands-on. You have been able to get to this point so don't give up. Winter is always a slower time for rentals so try to get feedback from those who viewed it so you can see through their eyes. Search online on how to protect your property while vacant. Others have given you great suggestions like timers, and motion lights. They even have fake dog barks when the motion sensor goes off.

Wish you the best  

@Chelsea Morrisey

Make sure the hospital is a Tier 1 or Tier 2 meaning heavy use as those attract more traveling nurses. As others pointed out can use FurnishFinder as well as sites like Airbnb and other websites that do rentals. However, if you search for agencies that provide work for travel nurses you can lock in a contract with them thus they guarantee the rent and are not rent sensitive as a travel nurse would be since they have a per diem that most will try to pocket as much of it as possible thus will look for a cheap but nice place to rent.

Best of luck 

@David Travieso

Congrats on taking action on buying your new investment. It's not uncommon for a duplex to have one unit vacant and one rented. The buyer can be a house hacker or investor so it leaves room for a larger pool of buyers. Ask your agent like others have said for documentation. Besides the lease ask to see the application the tenant provided with the supporting documents. I'm assuming since they are paying below-market rent you will want them out. But make sure before you give a 30-day notice that you inspect the unit. Make sure the make-ready won't cost you a lot more than you can afford. Sometimes make-readies can cost a lot for only a little more rent. One of the biggest expenses that can ruin returns is make-readies.  If the estoppel cert is accurate and your agent is able to get you all the necessary docs you can make a decision to offer the tenant a one year with a slight increase or keep them on a month to month. I normally like 1-year leases as it gives me stability. For anyone wanting month-to-month I normally charge them higher rent. 

Best of luck 

@Dave Foster

Was wondering what your thoughts were on using 1031 proceeds toward a build. I own the land and have permits for a small 12-unit apartment ground up. Haven't started yet. I was told by one person I can use 1031 towards the new build but can't count the land. Then I have someone else saying you can't do that. Your thoughts?

Best

Luciano

@Jacob Reeves

Sorry to hear what you are facing. If the break is on your side of the meter, the water line coming from the meter into your house is usually your responsibility and if the break is on the other side of the meter then the city is responsible. One thing to protect against your loss and rehab cost going up is to rent a dehumidifier after you have pumped out the water and let it run for about a week. The cost to rent those machines isn't much given how much it will save instead of doing mold remediation and just peace of mind of knowing you don't have mold growing.  
Hope the break is on the City's side and they take care of your cost.

Best of luck