All Forum Posts by: Mike Warder

@Nick Mullen I think the Bedford Park area is great. I used to run by it every day and think it would be a good area to have a property, especially as that area of Wash Blvd develops more.  Like most places in Arlington, it is an appreciation play. If you can hold onto it for a while, cover your basic expenses, and it’s easy to manage, I think you’re smart to keep it. 

Congrats, @Nick Mullen. What neighborhood of Arlington is it in? How did you find the property and negotiate seller financing? 

Thank you for sharing! I At what point did you pay a deposit? Was it prior to locking down a lender? How much was it? When it came to financing, how much did the lender probe into your experience with your rental properties? Were they at all concerned this was your first multi-family? Did the lender scrutinize your PM? Or, did the lender simply want to see that you had one ready to go? Thanks again!

Just sold my first property after 11 years. At times I thought I’d keep it forever. The turning point was when my PM contacted me and asked if I would consider selling instead of signing a new lease. Since I’m out of state now, I figured better to sell than go through the hassle of finding a new PM. Property had more than doubled in value, so realizing the gains and doing a 1031 exchange was the logical choice.

Contact a Property Manager in the area to ask about vacancy rates. While you have them on the phone, ask their opinion of the property. They’ll be able to give you a sense of the types of tenants you’ll be seeing. Capex really depends on a lot of factors, such as when the property was built, and when major items (roof, HVAC, etc) were installed or last overhauled. I wouldn’t buy a property without knowing those things. If the roof and HVAC are on it’s last legs, 15% for capex probably won’t save that deal. Repairs are also often dependent on the year the home was built. The older the house, the more repairs likely needed. They also depend on the class of tenant you have. Higher class tenants tend to take better care of their property and often handle many repairs on their own. Again, the PM should help confirm all of this for you. It’s also hard to assign a % for repairs and capex without knowing the value of the property. As a percentage, repairs and capex for a $500k property will be much less than for a $200k property. E.g., replacing a toilet should cost roughly the same in each of those properties. As a result, the repairs as a percentage would be much less for the more expensive property. What’s the property worth?

I currently live in Myanmar and I've been looking to see what opportunities might exist. There are a TON of luxury condos going up. Because so many of these condos have come on line recently, many are renting for much less than they originally expected to rent for. And, more are on the way. The economy in Myanmar is closely tied to the political situation, so its a crap shoot whether real estate in Myanmar will be a good investment long-term. I've concluded that it's better to put my money elsewhere. 

I particularly like Westover and Leeway in Arlington. They have fantastic schools and there may be some exciting development in those areas in the future (https://ggwash.org/view/41113/arlingtons-lee-highw...). But, there are countless areas that are worth looking at to live for a primary residence. 

There are some interesting brick homes in the Huntington part of Alexandria that have upside for flips. These houses are just a couple blocks from the metro, they have yards, there are green spaces nearby, lots of development planned, and new employers such as the National Science Foundation just moved there. Many of the homes need work. Also, Huntington is the closest point in VA to the new MGM National Harbor Casino and the outlets. It's right across the bridge. I think Huntington is a place where a lot of those employees will want to live. Of course, the potential of the Harbor area has not yet been realized, but I think it will over time. I'm interested to hear what others have to say.

Regarding student loans, I also have high student loan debt, moving toward forgiveness in 2021. On my most recent acquisition, the lender used my historical monthly student loan payment when considering DTI. It turns out the amount calculated was just under 0.5% of the outstanding debt. This is my fourth purchase with conventional financing in the last year. My student loans have never been an issue for the three different lenders I've used. I recommend getting on the phone with a couple lenders just to see what they say. Do this before you find your next property, that way you're not scrambling to get answers when there's a time crunch. Good luck!

Cost of cleaning between tenants depends on the region you are in, size and condition of the property. Expect to pay $125-$200 for a general cleaning. Ask BP for local cleaning crew recommendations. What does the lease say about cleanings and what the security deposit covers? That said, just because something is in the lease, doesn't mean the courts will agree it is reasonable. Just pay the ~$150 to have it cleaned by professionals and consider it part of the tenant turnover costs. They are an inevitable part of the rental business. Good luck!

Thank you Chris Martin . It's actually a smaller university called Alderson Broaddus. I'll try to contact the school separately.