All Forum Posts by: Martin L.

I would love to join this group. I recently moved to Denver and would love to tap into any local knowledge, (good PM, etc.) and can provide some input on some out of state markets. 

@Carly M. Estimates are supposed to be reasonable guesses, but a good PM's estimates shouldn't be that far off. The estimates from my PM are always spot on, and if they're off by more than a few dollars (only because there were additional problems found), then she sends me another message for approval before starting the work. 

When I redid my own yard, I don't think I even spent 3k for a FULL overhaul including 2 dozen roses, 2 dozen shrubs, a small patch of lawn, several creeping vines, a completely new irrigation system, path lights, spotlights, removing about 4 ton of decorative rock and replacing it with another 6 ton of rock and river stones for my front and back yard (desert landscaping), along with the usual trimming and pruning.

Of course, I'm sure that KC has larger lots than Vegas but you're just cleaning up. That shouldn't cost very much.

Oh yes... and fire the PM regardless and check with an attorney. This is purely for the fact that the PM felt it was just fine to approve work for 3x the original quote without talking to your first. OR because the PM picked a company that would rip you off for 3x. OR for allowing this to happen. OR... you get the picture. Whether he is trying to rip you off or just utterly incompetent, your PM has no value... actually he has negative value. My PM's value is in the money she SAVES me when something goes wrong, not just in managing my affairs. I almost never pay more that what she says it will be, it is almost always considerably LESS that what I can get quoted myself. Case in point, my friend was quoted about 3k to repair her AC unit. She's not very well off, so as a favor, I asked my PM to send her AC person over for a quote which ended up $1700 (condenser). I should mention that the first few years, I did get my own quotes on the side for any work she said needed to be done and I still get my own quotes on major work for comparison's sake.

I'm not an expert on holds that long, but I strongly advise getting a CPA in on this for another reason. I'm pretty sure you need to start thinking about 1031 sooner than later because you can only depreciate the property for something like 27 years. I know for me, the depreciation goes a long way towards reducing my tax liabilities. 

I don't know how it works if a depreciated property gets passed down in inheritance though, whether the depreciation gets reset or what. Like I said, the CPA might be a good idea for more than just the previous reasons mentioned.

@Nancy Roth You know nothing, Jon Snow... I mean, Nancy Roth. By this I mean, I wouldn’t offer condolences or even acknowledge that you know anything unless she expressly says something. While the house is your business, her personal life isn’t and anything you say or do could be taken in a way you didn’t intend. I’d want to separate from that tenant as quickly as possible, so if she mentions anything I would make it easy for her to leave. I’d also brush up on eviction procedures to prepare in case payment isn’t made. It’s an ugly and truly unfortunate situation, but while it may seem heartless to kick her out, that portion IS your business. If she approaches you for help and tells you the situation, I’d probably bend the rules. No need to be utterly heartless in a situation like that, but until then... it’s business.

I get excited by the figures too, since all of my US investments are in Vegas. I'm currently stuck analyzing whether to build up more cash for reserves and a possible dip, buying more in Vegas, or diversifying out of Vegas.

@Allyson Edwards I'm sorry that your deal doesn't seem to be working out so far. The problem with turning it around and selling too quickly is that, without enough appreciation you will potentially lose more money from the realtor fees. My last property was also brand new, and I wanted to rent it out for a premium, but ultimately it still went down to market price. Many renters simply don't care how much WE feel it is worth compared to properties that aren't as nice. If you're lucky, you can get your premium but oftentimes they just want the cheapest price for a place that they like "well enough". 
If you can get out of this without losing much money, it might not be a bad move for you. Unfortunately, I don't know this market, but if the neighborhood really is growing and there is strong potential for appreciation, then I would try to rent it out at zero CF and wait on some appreciation. The last property I mentioned has gone up by about 10-15% each year for the past two years. The overall appreciation in the area has affected rental prices and allowed me to increase the rent and CF since I bought it. The benefit of a brand new property is that you usually don't have to spend any extra money on repairs, etc. The roof, HVAC, water heater, etc... they've all got some life on them and should still be covered by the warranty if something happens. The new property has also been appreciating at a faster rate than my older property just a few blocks away even though the older one is larger. 

Good luck either way.

@Kyle Reynolds I personally have reservations about the North side. Everyone always talks about growth and opportunities there, my sister moved out there a few years back (Aliante) talking about how great it would be and all the development, etc...

She had to buy new Christmas and Halloween decorations every year because they were continually getting stolen from her yard. It's not in the war zone, but it was all "close enough" that they could just pop over, rob a couple houses, and then pop back to their hoods. After a few years of problems in her area, she moved back to the Southwest.

I'm not saying that there isn't opportunity in NLV.  There is. Prices have always been far more affordable for relatively new properties in great condition... but I wouldn't want to live out there, and I buy places that I would personally want to live. It doesn't let me ramp up as quickly as many here, but there are few headaches.

@Steven Coppola while it makes better sense to buy, it just isn’t always possible... for instance, when I moved due to my job, I went from the relatively affordable Las Vegas market to one of the most expensive markets in the world. Although I have several investment properties, I couldn’t afford to buy here without pretty much selling all of them. The other day, I decided to calculate how much I’ve spent on rent in these past 6 years and the answer was truly horrible... nearly 150k in money lost. This is even though I moved from a 4500 sq ft house with a yard into a mere 1400 sq ft condo. But... that wouldn’t even be enough for a down payment for my apartment (50% down for foreign buyers) which is probably worth about 1.5 million, Price to rent ratios here are horrendous. So... even for those who ‘can afford it’ and ‘know better’, there are still circumstances for renting. It hurts me to rent, but a mortgage on one of these properties would greatly reduce my investment capacity.

@Benny Gelbendorf, I'm going to have to second and third what the others have said already. I wouldn't trust anyone who actively reaches out and offers to mentor you. I also wouldn't trust most of the guys who run local REI meetups who happen to also have all these great deals that they're willing to let newbies partner with them in. There are a bunch of threads on BP from newbies who have been conned by exactly this type of individual. Maybe there are some legitimate ones out there, but unfortunately they're lost in the sea of con artists.

I wish you luck. I never really found a mentor, but I suppose if I had wanted one, I would have gone with a local realtor or PM. Perhaps a part time job and mentoring the old fashioned way... by doing the actual work.

@Brian Baker@Vincent Ballew

Most banks won't HELOC on an investment property. Try PenFed, they do up to 80% LTV. If you don't qualify through military connections, you can join one of the designated military support associations to qualify. It takes a small donation.