All Forum Posts by: Michael King

@Jeffrey Bass Yes don't get me wrong though, there are good ones out there, you just have to scratch the surface. I know there are good PMs in FL that are active on here; I'm surprised no one else has chimed in for you.

@Jeffrey Bass there are plenty of property managers around. In my mind, one thing that disqualifies a PM are stupid fees like account set up fees, monthly convenience fees for the tenant to pay online, and where late fees are kept by the PM and pet fees are split 50/50 with the PM. My first PM company got me on some of those, the second one got me on the others. On to my third PM for half my doors, I'm doing the rest. 

Another thing to look for in their contract is where you terminate the contract 6 months in (say for some crazy reason like you are unhappy with their service), yet the contract says you have to pay for the balance of monthly fees. Effectively locking you in to poor, poor management. 

You've got to understand that a PM company is not there to provide you with a service, they are there to create an income for themselves. And if you happen to get good service with it...well heck that's a bonus. 

That doesn't hit the 1% rule. 1% is a good starting point to determine whether to explore the deal more in depth (for me). Those numbers in my mind don't allow for vacancy or repairs. 

That said, I have 3 properties that are right at 0.73% on the 1% rule (yours is too). My properties were brand new when I bought them, so minimal to worry about mechanically. Something to think about.

Send a courtesy letter or call them before knocking on the door to introduce yourself. In my opinion people are a little Covid sensitive right now, rightly so. 

I sent a letter to my inherited tenants setting out options for payment, how to contact me, that I'd be around to meet them in the coming weeks, and that the lease they had remained in force. I felt like they had more uncertainty about new ownership than I did, so I just wanted to reassure them and set the tone.

I understand the insurance policy but the exclusive rights to sell? Are you selling? If not, I'd tell them to go jump. You're paying them to manage your rental, what are they elite or something?

@Jhoana Olarte thanks for the statistics! What does it all mean though? Prices seem fairly stable. Total sales dropped, but I'd say that reflects more that people are deciding not to sell right now, as opposed to no interest to buy. Therefore the sales prices are stable. 

Without knowing statistics, in St. Louis I'm seeing less inventory and stable or even increased pricing. I'm not staring at the market each day; I revisit it every couple of days since I'm vaguely interested in buying something. 

It would be nice if everyone would pay online automatically. Some people just don't seem to want to use online stuff. I inherited an older tenant who paid the prior LL cash. This tenant pays 5 days early, but I don't accept cash. I gave them the option to send me a money order or bank check to my PO box, or go to my bank to deposit it into my account. They send me a money order, which I turn around and put back in the mail and send to the bank. It's not a terrible compromise.

@Darwin Do You're welcome; I'm surprised more didn't chime in. 

Re reading your post, you're looking to get or use cash to invest I see and maybe I didn't give the answer you were looking for. I'm not familiar with HELOCs as such. If you have built up a lot of equity in your home, it would make sense to do a cash out refi. I'm guessing that interest rates for this would be 3.75 - 4% owing to the cash out part. 

I made a big mistake within the last 12 months. I had $160K in hand and decided to pay off one of my rentals. What a great feeling that was....until I realized that money would have been good seed money for more properties. Ouch. So I ended up getting a commercial line of credit on that same house to the tune of $100K...I used $40K of that to help me buy a 4 plex...so now I'm down $120K in "opportunity cost". And it cost me $800 to close on that LOC. I wish I'd found BP at that time to seek guidance.

I'm sorry you're in a bind and didn't mean to sound like a jerk. Before you decide the market is going to crash, have a look at how resilient the market is now. The market here seems very resilient to this mess. Austin's a magnet for Californians wanting to escape the CA mess. I think you'll have rising values for the future. But I can't predict anything, none of us can. 

So the question is: do you back out and take a $30K hit, or do you roll the dice and potentially lose a lot more? Like @Kirk R. said, check your contract maybe there's an out in there somewhere. Good luck.

You're absolutely right and I feel the same way, but in a purchase agreement when I'm shelling out big bucks, I don't read the contract since all the ones I've seen consist of mostly the same items and formats, I skim through looking for non standard items.  That said, I don't sign until I'm positive I know what I'm paying for and how much I'm paying. Same when I buy cars.