All Forum Posts by: Michael Walton

Hey Robert,

Don't worry.  A similar situation happened to me on my first property (a quad too, no less!).  It was marketed as "fully rented"...and it was, but prior to closing the following happened:

1st (about 20 days from closing):  While reading the appraisal report, I noticed the photos from one of the units looked unoccupied.  When I asked the seller, they said they were evicted a few days earlier and that they would make it "rent ready".  This was particularly frustrating as this unit needed a ton of renovation and I was not expecting to be in a financial position to deal with that right off the bat.

#2 (about 11 days from closing):  I get a call from my agent stating the the seller just received notice that the tenant in unit 4 (who was month to month at that point) just gave their 30 day notice and they would be gone 15 days into me taking ownership of the property.

#3 (AT THE CLOSING TABLE!):  After the wire transfer from my bank was complete, the seller tells me at the closing table that the tenant in unit #2 requested to break their lease that morning.  I hate to think the worst of people, but I KNOW he purposely waited until the closing agent came in to tell us the wire cleared before telling me.

So, what was supposed to be an exciting time for me instantly became a pressure cooker.  

But, like I'm sure you others will reply as well, you are better off to start off fresh with these vacancies as inherited tenants can be a huge pain in the butt.  You have no idea what the seller's screening standards were and what kind of tenants you might have been dealing with.

Now you get to do your own screening of tenants - I'm sure you already know this can mitigate so many headaches as a landlord if you screen your tenants well.  I know it doesn't seem like it now, but this is a positive thing.  

Good luck man, and let us know how everything turns out when the smoke clears.  I'm sure you'll be great.

I guess it depends on the scope of their cleaning.  Are they also steam cleaning and/or deep cleaning the carpets?  If so, $200-$250 is pretty spot on.  

How big are your apartments (sqfootage and br/ba)?  

@Keith Shields

Hey Keith - hope all is well. Maybe we can catch coffee sometime. I'm in Tally as well. PM me.

-Mike

I was in your exact position when I was 20 - I wanted to drop out and be an agent & investor.  I'm forever thankful that when I told my mom this, she knocked sense into me and told me to stick it out.  I think part of the reason was that classes you take in your first two years are rather dull and general, so it felt like a waste of my time.  Plus it seemed like the easier path then finishing school since the market was going wild in 2003/2004.

I would urge you to go back to school and possibly change your major(s) somewhere else in the college of business.  Maybe part of the reason is you don't like your majors, and entering as a junior it's not too late to change.  Business Management and Marketing are rather broad and general majors based on my experience and if you stay with them, you may end up with a $35k job out of school, or working one of the "Management Trainee" programs at say Enterprise, that have a high failure rate.

My path was Accounting, and it's provided me a salary in my first 10 years that has allowed me to save up for down payments on properties, as well as easily qualify for loans w/ my steady salary.  I never was in love w/ Accounting, but I knew that I could come out of college with some nice job prospects - and to this day I look at my day job as means to fund my real estate investing.  

There's nothing stopping you from having a full-time job, then transitioning out to doing r/e full time once you have an established business.  

@D.J. Parten

I'm down

This condo will negative cash flow - as someone posted earlier, you didn't account for:

1) [~10%/$125/mo] Property Management (Based on your profile, you live in Tampa) 

2)  [ ??] Insurance

3)  [5-10%] Repairs/Main't.

Also factor in the risk of the HOA fees rising when/if there are foreclosures in the future if the economy sours - like they did all across the country from 2008-2012.

@Yusef Griffin I live and Tally and once you get settled we should connect. Congrats on the 1st one!

Hey Ben,

Just seeing this now, but best of luck with your search.  I bought my quad back in 2015, and yes there are some folks that just want way too much for what the place is.  So many sellers want minimum 1% of rents for properties that are in need of a lot of work.  Unfortunately, there aren't many quads in Tally.

My plan all along was to consider exiting this property and 1031 into another after 4-5 years (so 2019 or 2020), but I may continue to hold as it has cash flowed nicely.  Problem i'm seeing now is the market is so high, what am I going to 1031 into?  Anyone else having this problem in Tallahassee or elsewhere?

Hello BP!  Any wholesalers in the Tallahassee, FL area?  Looking to be added to a few wholesaler lists.  Thanks in advance!