All Forum Posts by: Michael Sellers

@Manny Herron thank you for the new recommendation, I will look into Flipper Force 

@Arthur Yegiazaryan I would recommend Steve Hoffman with LTR Financial Services in Waltham. He is a tax wizard - CPA as well as an EA (enrolled agent). I know that he has tons of clients filing Schedule E, and I’ve seen him save clients thousands with various strategies.

Full disclosure - I did work for him part-time and will occasionally help him with simpler returns when he gets slammed this time of year - but I don’t get compensated or anything, just a genuine recommendation for someone I’ve seen save people tons of money.

If you want more info you can message me or just Google LTR Financial Services. Hope this helps.

@Nicola Rutherford  Thanks for the response. I just checked out ProCore, and from what I see, I agree that it's geared more towards construction than we need. I hadn't seen Asana before you and Eric mentioned it, but if it's free it certainly can't hurt to look into it.

@Eric Lefteroff thanks for your input, Wrike was one of the others on my shortlist so I’ll give it a good look

If you have any experience with construction/project management software, what are your recommendations/tips? 

I work for a small/mid-sized development firm and we're in need of a new management software. Our needs are more geared toward project management (making sure projects are progressing as they should) and budgeting - not as much on the construction side of things like bids, estimates, etc. 

From what I've researched, it seems like BuilderTrend and CoConstruct are the two unanimous leaders, but they offer more features than we need and are very expensive. Any recommendations/comments are appreciated!

I manage roughly 20-30 rental units in/around Boston, MA for a local investing company. I typically handle tenant maintenance requests and other general communication with the tenants by either answering them directly or leading them to the appropriate person, but we're still trying to figure out a protocol for when "emergency" maintenance calls come in after-hours.

Obviously, if there is a fire, break-in, medical emergency, etc., they would be calling 911, not the property manager. We just want to be able to provide tenants with a 24/7 number to call if something that requires immediate attention comes up in the middle of the night like if a pipe burst and started flooding the place.

Does anyone have any experience with such a service or any recommendations on the idea in general?

Thanks for your feedback David! Do you think that saving money with the regular FHA was worth the headaches that it caused (not considering the additional headaches caused by the inexperienced lender)? I've thought about using regular FHA loans as well, but my logic is that there are so many old properties in the areas I'm looking that I figured if I was going to use a low down payment loan (already a bit of a headache) that I might as well do a 203k and get some repairs out of the way from the start.

Hi everyone,

I've been doing some research on FHA 203k loans, and I'm a complete newbie to investing so I still have a few questions. I've seen online (usbank.com) that the current average rate for a regular 30-yr FHA loan is 2.625% and the APR is 3.678%, and that I should expect a 203k loan to be roughly 1% higher (3.625% rate, 4.678% APR). I assume these are relatively accurate numbers, but I have little experience so it's possible I'm not researching in the right places. Please correct me if those are inaccurate numbers. I have also seen that I should anticipate roughly 0.85%-1% extra for PMI. My question here is whether or not that extra % for PMI still needs to be accounted for, or is it already baked into the percentages above?

My second question has to do with the points charged and other closing costs. I've seen that I should expect to be charged around 1.75%, or 1.75 points (themortgagereports.com). Again, if this is not an accurate number in your experience please let me know. I know that you have to hire a HUD consultant if the renovation is large enough, but are there any other closing costs involved in a 203k loan besides the typical closing costs of a conventional loan (i.e. property taxes, insurance, appraisal, etc)?

@Dan K. thanks so much for your input! Great point about using other people's money on a house hack. Like I said, I really don't want to go that route (using OPM), so I hadn't given any real thought to what that structure would look like but I see what you're saying. About the lack of 4-plexes near Boston, I don't particularly care about being in the city or even as close as Brookline/Cambridge, so the low supply there isn't as much of an issue for me. I have mostly been looking at other, smaller locations in eastern MA that I could commute to Boston from. Obviously, the closer the better, but I would be fine with being further away from the city. Thanks again for all your advice and the referral, it's greatly appreciated!

Hello everyone, 

I've had a BP account for a while now but have never been active other than scrolling through forums. Short intro - I'm 23 and I finish my MBA in 7 days. My brief professional career so far has been in the tax industry, both at the individual and corporate levels. It's a useful skillset to have, but tax is not my passion at all - real estate is. One of my goals for 2021 is to purchase a small multi-family property - preferably 4 units - to house hack (live in 1 unit, rent the other 3 out). I have not settled on one location yet. I have been considering a few different cities in eastern MA, but the restrictive factor in a more expensive market when going for a 4-unit is obviously capital (at least for someone in my position), which means I will have to get creative. I would prefer not to use OPM on my first deal just for my own comfortability, but I'm thinking that it might be unavoidable given the market I'm in. I've been listening to the BP Real Estate Podcast for about 2 years now and have gone through 200+ of the episodes, so I'm past the point of needing to take action. My excuse to myself for the past two years was that I was still a student with a low income, but I realize that was fear talking, not something that could actually stop me from investing.

I just recently started a job working for a small RE investing and development company near Boston, MA. I'm excited to be a part of real-life investing instead of just listening to it in the car, even if I'm not the one personally investing in the deals yet. I'll be doing a range of things for the company: marketing and lead development, internal organization/optimization with CRM systems and other databases, construction management, and property management. I haven't worked there very long yet, but I have loved it so far.

Hopefully it's ok that I'm posting this in the new member intro forum, maybe I will need to repost in a better place, but my questions deal with the property management aspect of my new work. From everything that I have ever heard on BP or read in books, most investors plan for about 8-10% of monthly rent for property management. This company, however, pays its current property manager (the guy I will take over for in the coming months) only 3% to manage roughly 35 rental units. When I showed surprise and asked about it, the response was that 10% is way too high and that the going market rate was closer to 3-6%. Like I said, I have not worked here for very long, and I do not have any experience investing in real estate personally, so I didn't feel like challenging them, but it definitely didn't match up with what I thought the consensus was. I did some light research on Google, and everything I found confirmed what I had thought: 8-10% was the expected rate for a property management company. 

Other information that may or may not be useful in answering my questions:

- the units have all been full-gut rehabbed within the past 2-3 years

- each property has no more than 9 units, but most are between 3-6

- though there are currently about 35 active units, there are another roughly 35 units currently being rehabbed that will be added to the management portfolio once complete for a total of around 70 units I would be managing

- I would not be the one making physical repairs or fixing the toilets so to speak, as the company also has a property maintenance person that the property manager delegates most labor to; the manager's job is more to interact with the tenants and be the face of the company, as well as obviously tracking the properties' financials to make sure everything stays profitable

PM Questions

Is 3% really a reasonable rate to pay a property manager who is managing 35-70 rental units in a high-rent market? If not,

   1. how much should I be asking for, given that I have no experience and am in this job for the first-hand experience just as much, if not more, than the money?

   2. is it lower because I am an in-house individual rather than a 3rd-party PM company?

   3. is it lower because there are several properties with several units each rather than just a couple smaller properties?   

   4. if none of these, then why?

What are the biggest pain points that a good PM addresses? I know the usual don't take cash payments, make no exceptions so you don't get caught in discrimination issues, screen well, etc, but what are other things that most property managers just do poorly that I should watch out for?

Non-PM Questions

What are good metrics to help differentiate between potential investment locations, keeping in mind it will be owner-occupied for at least a year?

Does anyone know if BP is going to have a sale on Pro/Premium memberships this holiday season? I'm upgrading soon regardless because I want unlimited access to BPInsights, among other things, but I know from listening to the podcast that there have been promos in the past. I was hoping there would be one for Black Friday/Cyber Monday, but I only saw book sales.

I feel like there's too much here for a first post and I could talk RE and ask questions all day, so I'll wrap it up. Please don't feel obligated to respond to everything I brought up. If you can help with any piece of it, your advice is greatly appreciated. Also, if there are any investors in the Boston/eastern MA area who want to connect for any reason, feel free to reach out. I'm just getting started and would love to make some industry connections. Thanks for reading!