All Forum Posts by: Michael Boyer

Based on your goal (to have a small rental portfolio), I am not sure the MBA would be ideal.

I am an advocate of education, and if you told me you wanted to work in Fortune 500 Company and were looking to kill it in an MAB program, make connections, and start your rise, I may so go for it. 

Even then, I am not a huge fan of the debt, however (sort of going Dave Ramsey there).... So if you could cash flow it, even better.

Also, you may know a traditional business path is to work for a large company a few years and if you are promising then they pay for the executive MBA (though it may be the nearby state school or even be online, maybe not top 20 but usually AACSB accredited). Then the company retains you (win/win) and gets a future mid/upper level manager.

My understanding is that you then often expect or put for a promotion soon after the MBA (some folks may seek other opportunities if there is not upward mobility or don't get he move up).

At any rate, you may be able to find a lateral move to a business (maybe one with science-related operations) work there and utilize their MBA program for new/promising executives.

Or, along the same lines, you could keep your current job and put together your own career plan taking the MBA on the side. Some top 50 ones are low residency now. Some of the executive/online/low residency MBAs may work with a day job.

Finally, perhaps the bad news....Not that much of the major US graduate business curriculum will cover real estate transactions and management. I think Cornell may have some major hotel/hospitality type property management--but buying a 4 plex not so much.

Oddly, the real estate classes at a community college where a 30 year broker, appraiser or long time property manager teach may be more akin to what you seek. Not much prestige--but more applicable.

Finally, you may want to get a school of hard knocks MBA by doing deals, reading books, listening to the podcasts, meet ups with local investors, trying some hands on work (tape and mud to screening tenants!). That costs is about free at the library and no extra charge to be DIY landlord on your next rental!

Neat project.

If I were to play potential buyer, taking mental notes....

Drive Up:

) Multi-colored brick is an acquired taste but looks in keeping with the neighborhood.

) Bit of bare dirt there in the lawn by the entry, not major and probably filled in with grass by now.

Inside:

) Everything looks new or newer.

) Cabinets not real high end (but may be norm for the comps).

) Counters are a bit strong/dark. 

) Wonder why he did not install washer/dryer.

Other:

) Built 1964, I'd wonder about the HVAC, insulation, plumbing and whether the major systems are recently redone (when). Bit of roof on the overhang looked ok.

) Energy efficiency?

) Schools? Parks nearby (probably a family home).

) I may have missed backyard (fenced? is it nice? for pet or kids it can sell)...

) House/Neighborhood history? Does it come with property baggage? (you got it 1/2 off last year and maybe there is some institutional memory about cars on the lawn or boarded up windows; something else involving yellow police tape or worse. If so, who knows, it may take some seasoning before people see it as a nice, remodeled property and forget the past..).

So I like the overall clean look but was left with some questions before I pulled the trigger. But lots of good advice here on price and how that may get buyers to fire away...

I do like the price you got in at and--while probably not your goal--it might in the worst case be rental candidate. With an economy partly cyclical (oil), if you get $100/barrel in a few years, you might find a booming local economy and houses like this selling like hot cakes--and you'd have inventory! But you have some nice finishes you may have to touch up after some wear and tear. 

Best of luck!

Congrats on your landlord journey! 

 I would second much of the specific advice given and would just generally add that getting a book or two on landlording (or creating your own reading list by browsing many of the blogs, forums and podcasts on BP) might be a good introductory education on landlording. 

Being a landlord is one of those undertakings where an ounce of prevention is worth a pound (ok, a ton) of cure. 

For example, if you can prevent the nightmare tenant, you avoid--well-- nightmares (like real ones, where you lose sleep or wake up worried how the eviction will play out or toss and turn wondering if the non-paying tenants are trashing your place; you drift off imagining them doing nefarious things under dim lamps with bunson burners and beakers amid a pile of trash surrounded by half feral pit bulls resting on dirty mattresses)... 

Some basic, low cost landlord self study will help you sleep soundly and get a check in the mail (or in your account electronically) every month....

Even the classic Landlording by Leigh Robinson is in most libraries (free) or used bookstores for a couple of bucks.

Best of luck!

A classic buy and hold rental book is Landlording by the late Leigh Robinson, often in local libraries or very low cost used. 

It is "the yellow book" covering all the basic rental practices and even imparts the unique landlord sense of humor you will develop over time  (via the funny cartoons). Any fairly recent edition will work.

Best of luck.

I second/third the idea of getting more tree bids. It is the cause of the problem and will continue to be troublesome.

It is just going to cause more issues down the road--like eventually crack your next driveway, impinge on any underground pipes, put leaves and branches on your roof/gutter every storm and every fall, etc. 

Nature is powerful; those roots might even reach the foundation of your house....

 I had a big tree downed last summer for 500 bucks... A nice surprise and they gave me the wood cut in rounds (like a hundred plus worth of firewood). 

Find a safe, reliable, insured low-cost operator. 

Ask around (property managers, realtors, investors, etc). You might get a break if you don't need the stump ground down (and can landscape around it or something.

Then I would actually look at (again back to bids) getting a new concrete driveway. More expensive but long term more peace of mind. They can also cut off and remove all the roots which would rot and possibly allow settling.

Best of luck

Sounds like the market has been giving you the answer ("no trouble renting them" and only a marginal rent increases as a result of the rehab)...  

And Mr. Market seems to be saying your units are economically productive and on par with comparable units as is (based on tenants grabbing them).

And, as you know now, that new smell and model home appearance of the totally remodeled and rehabbed unit will fade fast when the tenants treat it like, well, a rental...So you may just end up remodeling again if you sell or get a rough tenant..

I tend to do more work on units prior to a sell and let the horses run with a rental with tenants in place that are relatively happy. Plus, this does not sound tremendously dated or obsolete building situation (built mid-century and updated since)....

I do, though, like when landlords are responsible and don't squeeze all the juice out of the lemon and exit stage left (and pass on all the deferred capital costs to a less informed buyer, like a hot potato). But also sounds like you are long term by and hold so using up some more of that useful life is probably the thrifty path (and save up reserves/CAP EX along the way!).

So in summary : your rentals aren't going anywhere--so if you get bored next time you have a vacancy (and have 50K or 100K or whatever you need saved and handy), the unit will be there for that full rehab. The process will offer peace of mind even if no major monetary pay off. You will probably even learn some things on the way. It might be ideal if you get a long term tenant that is a real wear and tear specialist, one that squeezes the last useful life out of all the components... then out with the old, in with the new...

Best of luck!

Good point about the mass selling rei books being borderline self help (Tony Robbins-ish)... That is great if you need motivation, but if you need to know how to pick a tenant or do your Schedule E, you need practical guidance.

Just a few ideas for more practical titles:

) All the BP books are by practitioners and top notch.

) For a buy and hold landlord, try Landlording by the late Leigh Robinson (a classic).

) For a fixxer upper angle, try Investing in Fixxer Uppers by Jay P. Decima (an author also on BP some).

Best of luck!

I think a BP poll some time ago has a very high number of BP folks start by renting out a current residence. 

Makes sense: financing in place, you know the property (and its maintenance and quirks) and the neighborhood. Just get it ready....

That worked for me (still have that unit). 

We had a small condo and them we had a kid and were moving up (to a bigger one). 

I had gotten the big, yellow book Landlording (a classic and also humorous) by the late Leigh Robinson from the library... The pictures and humor are ideal for landlords new and experienced.

I was in my twenties and was like "I can rent this rascal out...."

So there is my start story in a nutshell: a small condo and a big yellow book (a property and knowledge combination--presto!)

All markets and situations vary, but if you can get the knowledge and get (or have) the property you have both parts of the "start up equation".

Best of luck!

It is great to be thoughtful about your overall impacts...

I do think if you take the ugly duckling on the block and make it a swan, you probably won't get many complaints.

My own big picture view is related to the housing stock. And whether you are producing a net benefit may depend on how you go about your flip.

I see so many houses that need loads of capital improvements--deferred maintenance, all components at or near the end of their useful life--never a thought to cap-ex from owners or landlords that squeezed all the juice out of the lemon.

These neglected places en masse tend to lead to blight and bring a downward spiral (all sorts of social problems, the opposite of bringing in the gentry!)

So if you can come in to a neighborhood and rehab housing to make it more habitable, efficient, and modern, and do it well, that seems a win/win. You are like a one person housing development agency, renewing homes and providing quality housing (not any easy task).

If someone is just doing a surface flip (just cosmetic shine and not so much substance), I am not sure you help any one (save stimulating the economy some for cost of the floors, counters, and paint). You have an ugly duckling with some polish.

So maybe look past the market value aspects to the quality of the housing stock. Few folks have the capital or management skills to pull off high quality rehabs.. And governments and agencies tend to tackle large, multifamily projects. So there is a need. If you can do it, you will help others have quality housing. 

And it is up to you what you do. You can rent it out at market rates or choose to take Sec 8. 

Or you can do both--have some market rate rentals and also work on Habitat for Humanity projects, your own lower income housing project, or lobby policy makers for mixed income development.

Interesting scenario for sure.

Beats my most interesting criminal charge which was a felony escape from prison! 

I figured if the applicant could get break out prison, he'd find a way out of the lease and it was an easy denial....