All Forum Posts by: Mark Trebor

Understand what your client wants.  Also understand how open your client it to deviating from what he wants.  I gave my realtor a map with a red line on it and said I won't buy houses outside of this area.  Occasionally he tosses me a house outside of the red line and I remind him politely I am not interested.  It doesn't matter if my red line is a good idea or a bad idea, its knowing that its my idea and understanding why I have drawn the line where I have.  So listen but ask good questions so you can be on the same page with your investor.

I bought a house that needed about $50K in work, once the work was complete and I had a lease in hand I went to the bank and refinanced with no problems.  I was able to pull $57K out so it worked out well for me.

Once you get going you will need a reliable Plumber/HVAC person.  I self mange the properties and rely on a whole bunch of different maintenance people but the Plumber/HVAC guy is the guy you need.  Most plumbing/HVAC issues cannot wait until the weekend or when it fits in your schedule.  I still use the first guy my realtor suggested from 12 years ago, but now that I have 18 properties we have three different Plumbers/HVAC companies that we can call on.

As for the operations side of things a Realtor has been nice to have in the back pocket but of the 18 houses we have bought I think I found 14 of them on our own.  Of the last 3 we bought 2 of them we found from approaching the owners directly, we saved ourselves allot of money by going directly to the title company and cutting out the realtor.  Yes in theory the seller pays the realtor but in reality if you're buying the house you're paying the realtor.  We worked with a small regional bank on the consumer side getting conventional mortgage for the first 9 houses after that we moved over to the commercial side due to lending laws.  Working with them for the conventional mortgages initially gave us a foot in the door to get larger sums of money with the last 9 houses.  So having a banking relationship is good, we use two different insurance agents and they know that we split the business between the two different companies.  That has worked in our favor and kept the annual increases low, because they know we will jump ship if they get greedy.

I also run Quickbooks by myself and have used 3 different accountants over the years.  Started with a big firm, then moved to an independent now with a father and son team.  The independent was the cheapest but the father and son team seems to be on top of their game a little better and they have a small support staff.

To summarize Maintenance

1) Plumber/HVAC

2) General Handy Man

3) Painter/Drywall Guy

4) Roofer

5) Electrician

6) Garage Door Guy

Operations

1) Banker

2) Accountant

3) Title Company

4) Realtor - until you buy a couple of houses using one they are really not going to give you any special treatment even though they tell you they will.  You have to prove you are legit to them (which I think is fair).  We still stay in touch with the realtor we used for a number of deals and her team reaches out occasionally with opportunities.  She knows what and where we want properties.  She takes a video of the house and we make an offer based on the walk through.

Good luck

If you have a good credit score I think most lenders will look more at what you are making now then what you were making while going to school.  I really can't imagine you will have a problem.  Why do you call it "income taxes" vs just "income"?  Good luck.

The area I invest in are college rentals that I manage.  If that sounds interest feel free to fire off some questions.  I would say the best advice I have is just do it.  I really think its that simple, so if you've been looking and have an idea as to what you want starting looking at properties when one hits your numbers just go for it.

If you're handy and doing the work yourself replacing the windows is where I would tend to go towards.  Contractors get allot of money to install a sh*tty vinyl contractor grade window.  The city I rent in inspects houses every three years and we get flagged for windows that have pealing paint, cracked pane or are only single pane with no storm window.  When we get flagged we just replace, makes the inspector feel good that they found something and keeps us modernizing the house.  Old windows can really look bad, I rent to mostly college kids so I don't think they really care what condition they are in but I like keeping our houses nice.

Larry,

There's a magnifying glass icon in the upper right corner click it.  Type in rental property expenses.  There's more then enough information there to answer your question.

My advice to anybody starting out is just do it.  Find a house to flip, find a house to rent out, start putting letters in the mail.... you get the idea.  I think allot of people get stuck at your point, there's a good chance nothing is going to fall into your lap.  So you have a job and I'm going to assume you don't have allot of debt so you should qualify for some first time home owner stuff.  I think I would target a duplex or quad plex that needs a little fixing up.  It gives you a place to live, it lets you experience the buying process, the renting process, the maintenance issues, and depending upon how much work it needs it would let you experience the flipping aspect of things.  See how that goes then build from those lessons.  If you live near a college I recommend buying a house near the campus.  I think you get a premium from student housing and its close to recession proof.  Good luck

 @Bill Goodland

Hi Bill,

All of the houses are 100% empty when the tenants move in.  In my lease there is a statement/clause that says when you moved in the house was 100% empty when you move out the house will be 100% empty or there is a $75/hour removal of what we consider trash fee.  So the houses are always empty.  We've even had tenants moving tell us that there friend who is moving in is taking the couch, we make them move it into the front yard so their friend can see an empty house and then the new guys will have to move it back in.

I would skip furniture personally, sure you can buy it cheap but the kids I rent to don't want to hang out on a couch with somebody else's DNA all over it, or Pizza stains or beer you get the idea.

 @Trevor Cox

All of my houses are considered student housing in my mind and by the city the houses are in. We have single family housing and multi-tenant single family housing. The difference is a few hundred bucks in fees every three years. I can't imagine too much of a difference in expenses between tradition SFR vs college SFR at least not the way I do it. 100 % occupancy is what I have experienced over 11 years and depending upon your age 2007 to 2010 was not a good time with our economy. But I believe colleges are recession proof. I use 15% for maintenance and 8% for operations as numbers that have held pretty close, all though I have spent the last 10 years improving allot of these houses that were neglected from previous landlords so I am predicting that the maintenance budge might tick down slightly.