All Forum Posts by: Ryan Schuler

Thanks @John Teachout for the input!

@Douglas Skipworth @Alex Craig what do you guys think about this? Property is in the midtown-adjacent area- on Harvard Avenue a block from Hollywood. Any recommendations on people to do the work once I close, if I decide to go that route?

Going to be renovating both sides of a duplex soon. 2/1 on each side with living room and kitchen. Total sq ft between the two places is about 1500 sqft. They only have one window unit on each side right now, way up at the front of the house (each side is shotgun style), then floor or wall heating units for winter.

What would the cost differences be between doing minisplits vs traditional heating/cooling with ducts? Advantages/disadvantages of both?

I am in Memphis- weather gets up to 105* in summer and lows in the 10-20* range in the winter.

I’m trying to attract a higher class tenant in a c+ area that is evolving and improving.

Investment Info:

Single-family residence buy & hold investment in Millington.

Purchase price: $52,000
Cash invested: $4,000

This property was listed at $48,700, but it was a good deal up to about $60,000. We won the highest bid at $52,000 by just $500. House next door was flipped in 2018 and sold for $94,000. The house was immediately listed for $900 and looks like it was rented at that amount since it has not been relisted since.

After reaching a sale agreement we inspected the home, and rehab needed was very minimal. We repainted the outside of the home and cleaned up and painted parts of the inside of the home. Put new knobs on the kitchen cabinets, and replaced some broken soffit pieces and window sills that had rotted out.

I used a heloc to buy the home and will be refinancing it out on a 15-30 year mortgage to increase the cashflow. I am getting an appraisal soon, with estimated ARV at $100,000 , which means my equity in the home will be over $44,000.

This home is currently rented at $900 per month. Tenant does own lawn maintenance.

What made you interested in investing in this type of deal?

This was my first investment and I was excited when I found it on the MLS- it was a steal! It didn't need a lot of work and the area is pretty good because it is close to the naval base.

How did you find this deal and how did you negotiate it?

Found the Deal on MLS. It was priced way under-market and I bid over the asking and won the bid with a cash offer at $52,000.

How did you finance this deal?

I used my HELOC from my personal home.

How did you add value to the deal?

We repaired soffit and rotted siding that was broken, cleaned the inside and painted the exterior of the home.

What was the outcome?

Successful rental within 2 months of closing on the home, tenant is paying on time and is happy with the home.

Lessons learned? Challenges?

I learned to have the workers lined up to do estimates on repairs to the property as soon as you close so that the work can be done ASAP. Also learned a LOT about how to screen and manage tenants and contracts. I also learned to get the details on the water/electrical before putting the new tenant in and put a clause in the contract that they have to get it switched over or else there will be fees. Lastly- put a line and fee in the lease about tenant getting locked out of the home.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Yes, my agent James Little was fantastic!

@Rousner E. Yeah I am always looking for some good contractor contacts if they are reasonable and do a good job. I see you are in Millington- my First Rental property is actually in Millington off of Navy Rd! hit me up and we can meet up sometime to chat about real estate. I try to attend the Young RE Investors Group meetings at Railgarten in Midtown Memphis on the 2nd to last Tuesday of each month. If you haven't gone you should check it out!

Hey Guys! I am about to do my second deal and am looking for some advice. I am buying a C+ class duplex in Memphis (2/1 each side) with owner financing- $65,000 with 10% down and 5% interest, 10 year term, can pay it off after 3 years if I want, no prepayment penalty. ARV with about $20-25K in renovations should be around $110,000. Past rents were $450-500 each side for 750 square feet/side. After repairs I am hoping to get $750-800 per side.

One side is vacant now, the other side the guy is moving out now. The owner wants to close Jan 1, but wants to put another tenant in now for the side the guy is moving out of. He was looking to rent it for $600 on that side, but I told my agent that I would just pay him the $600 rather than have him put someone in that I can't vet out. I would love to hear your suggestions on what you would do.

I think he will let me in early to begin renovating, especially if we agree to the $600 rent payment (which I am going to see if he will just roll into the loan anyway). My original plan was to do cosmetic renovations to whichever side looked the best and rent it out, and do the more in-depth renovations to the other side before renting it out. I have cash from a HELOC that I can use for the renovations and could do both sides at the same time.

Would you do the same thing as me with the $600 payment rather than letting him find someone?
Would you Renovate both sides at the same time, or split them up and renovate them one at a time?

Thanks!
Ryan

@Patricia Steiner and @Kevin S. thanks for your takes. Yeah I figure I may be jumping the gun on it but thought it would be better to figure out now since they were asking about it. I guess my issue is since they aren’t married there is nothing technically tying them together legally. On the other hand I guess who is to say a spouse couldn’t up and leave just the same way. 

The tenant asked if they would both be required to make that much, so I wanted to have a concrete answer. I told them to both fill it out, that ideally they would both make that much but that exceptions could be made. I didn’t know if there was another way to secure myself if they didn’t each make enough. I like Kevin’s idea of another deposit. 

My first property (3/2) is ready to rent and I am sifting through applicants. A woman told me that she is interested in moving in with her sister. Both have one child each . They are each going to fill out an application, but should I require that they each make three times the rent or would it be OK if only one of them makes three times the rent? Or If their income combined is five times the rent? What would be the dealbreaker in this scenario? If all things outside of the income are good for both applicants.

Thanks John! I am looking at some online tools to help with this as well. There is a cool video on automating your pre-screening process that I found and I am setting up now.

https://www.rentprep.com/tori-vs-harry/automate-prescreening-process-tenant-applicants/

I have my house ready to rent. I want to automate the screening process so that a company answers the phone and screens the tenants. I know I could hire a traditional leasing agent, but are there VA's out there or another system I could use to automate this process for less than a traditional leasing agent? Somebody has to have come up with a good program/system for this...